Digital

Email automation: how targeted segments can help you skyrocket sales

- February 28, 2020 6 MIN READ
automation

Email automation is the digital equivalent of a robo-vac…
Bear with me… Basically, you set it up, switch it on, and off it goes, zipping around picking up all the crumbs… Even the ones under your couch, “Damn how did it get so dirty under there!?”, asks Alita Harvey-Rodriguez, Founder & Managing Director of MI Academy.

In this situation, the ‘crumbs’ are your lost potential and dormant customers. The people who are eager to receive content from you, need answers or are hanging around looking for a reason to convert. They are clearly there for a reason; you just haven’t found their suction setting with your clunky old vacuum.

What I’m trying to say is, email automation remains one of the most efficient ways to nurture and convert new and existing customers.

In fact, B2C marketers who use automation have seen conversion rates as high as 50per cent. (eMarketer). Better yet, statistics show that segmented automation campaigns have 14% higher open rates and 101% higher click-through rates.

So why aren’t more businesses using automation to build customer loyalty? Well, after many years in the field it’s clear email automation can often feel ‘too complicated’ or ‘too overwhelming’ for both novices and pros alike.

The goal of this blog is to shed these misconceptions and help you target your low-hanging fruit with email automation. Trust me, email automation does not need to be daunting. Start here and you can build your strategy to something truly remarkable!

Like any relationship, the connection you share with customers will take time, consideration and care to maintain—thankfully automation really lightens the load. I always say this, if time = money, then automation = difference. Your efforts are rewarded with time saved!

Where it really gets complicated is in deciding who to target and with what. Segments, triggers and flows, there’s endless combinations you can implement. We want to make this simple. Here’s a good starting point for building out your loyalty automation flows!

3 Powerful Customer Segments for Loyalty-Building

Segment #1: Your Sleepers
Unless your brand new to the business we can guarantee you have some ‘sleepers’ in your subscriber list. Aka people who haven’t purchased from you in over X months. A total goldmine of opportunity that shouldn’t be ignored!

Did you know 65 per cent of a company’s business comes from existing customers? Better yet, a mere 5% increase in customer retention can increase profits 25-95%. That’s an almost instant impact on your bottom line just by reactivating this segment.

Now there’s several reasons a customer may have fallen into your ‘sleepers’ segment:

  • They weren’t impressed with the first purchase and have decided to try a competitor
  • Your product lifetime may be quite long so there’s no need for a repeat purchase just yet
  • Their lifestyle or general buying behaviour has changed
  • They simply haven’t thought about your product or brand in a while
  • You haven’t sent them the right content

A reactivation campaign will not address all the above challenges, but it will give you the best chance of recapturing lost leads and opening an honest feedback loop.

For example, last year we worked on a reactivation campaign with Mountain Bikes Direct. We set out to gather honest and open suggestions for improvement from the ‘sleeper’ segment of their audience.

The email series had a 24 per cent open rate from repeat customers who had not made a purchase or opened an email in 9 months, and a 15.4 per cent open rate from one-time purchasers who had become dormant. These open rates are great, but the success of the reactivation campaign was really validated by the feedback!

7.5 per cent of subscribers who opened the email replied and were able to provide the retailer with valuable insight into their barriers to purchase and how lifestyle changes affected buying habits. This led to many quick fixes and process clarifications on the retailer’s side, ultimately resulting in a far superior customer experience.

Moral of the story? You’re not only missing major opportunities for ROI by overlooking your sleeper segment—but closing the feedback loop that provides the valuable customer insights you won’t find anywhere else!

Win Back Strategy

We’d suggest a two-prong approach here!

Email one will be your classic ‘we miss you’ reactivation campaign. You could offer a limited time incentive with purchase. And for those who don’t convert from email one, we want you to follow them up with a plain text email asking how you could improve. Bonus tip! Use your Founder or Customer Service Manager’s name as the ‘From Name’ for email two. Give it that H2H (Human to Human) touch.

Segment #2: Hey Big Spender
Even your loyalist of customers will fall dormant every now and then!

Similar to the first segment, your ‘big spenders’ have not purchased in over X months. However, what sets these guys apart is their average order value (AOV).

Conversion rate (CVR), customer lifetime value (CLV) and average order value (AOV) are considered the ‘big three’ of ecommerce optimisation. The ‘big spender’ segment is designed to improve your CVR on customers who already have a high AOV ultimately skyrocketing your CLV. All these acronyms make it sound complicated but trust me it’s not!

Now I can’t give you an exact dollar amount to segment for, but I’d suggest aiming to identify the top 20% bracket of customers based on AOV. Depending on your product spread this could be anything from ‘AOV over $100’ to ‘AOV over $1000’.

Back to the Mountain Bikes Direct campaign, there was a clear sub-segment within this list who had made quite a few high-value purchases in the past before falling dormant. Serious mountain biking enthusiasts who had mysteriously lost interest.

An important learning here was that the big spenders had not necessarily fallen dormant because they had chosen a competitor. Many of them had had drastic lifestyle changes. Babies, new jobs, a move to the city. Life happens! Or perhaps more interestingly, they were simply unaware of changed processes and were just that one email away from being tipped over the line.

This was information such as, “I wish you offered free shipping”, “I was after this specific brand” or “I prefer in-person product advice”. MBD took this advice on board and continue to use it to improve how the brand can adapt to changing buying behaviours and grow with their customers.

Win Back Strategy

Like your ‘sleepers’ strategy we’d suggest getting really personal with this segment. Think along the lines of, ‘You’re one of our most valued customers…we’ve noticed you haven’t purchased in some time…what could we do better?” Be genuine, open to feedback and ready to follow up a provide the necessary resources.

Segment #3 Your Champions

And finally, your champions! These guys have bought recently, buy often and spend the most. They are defined by the ultimate trifecta of an above average CVR, CLV and AOV. True advocates for your brand!

It’s easy to ignore this segment. Everything is smooth sailing and there’s more pressing segments that need your attention. STOP. RIGHT. THERE!

On average a satisfied customer will tell 2-3 others about your brand and it’s safe to say for your loyal champions the flow-on affect would probably double. Your ‘champions’ are basically providing you with free marketing so it’s only fair that you reward their loyalty with some exclusive rewards.

Win Back Strategy:

This is not necessarily a ‘win back’ strategy as they’re already well and truly active, more of a ‘power up’ strategy. You see, 56.8% of consumers are more likely to participate in programs that offer exclusive rewards and email is a great channel for this. Treat your ‘champions’ with VIP access to a new product, discounts for referrals or a special gift or personalised email. Better yet, use this mob to help you acquire new customers. They love you so use them to help refer newbies and get new traffic!

MI Academy’s 3 Top Tips for Mastering the Practical Implementation of Email Automation
Now this post is already quite long so I won’t go into too much detail here!

Master RFM Modelling
Your first step should be to learn the fundamentals of RFM (Recency, frequency and monetary) modelling. This is the format used to define these three segments and will help you uncover many many more. You can use the RFM model to sort your data manually, or if you’re lucky, some ESPs offer their own algorithm to define these segments for you.

Look Beyond the Data
It’s important to look beyond the data and consider WHY these customers or subscribers have landed in these segments. The MBD case study is a great example of the power of this. It’s not always an issue with awareness or need – dig deeper!

Aim to Deliver Highly-Personalised Experiences

Smart automation isn’t ‘spray and pray’ or ‘catch-all’. It needs to feel highly personalised to where that subscriber is in their customer journey and what they need from you at that exact point. Make sure you closely consider WHAT your customer needs and WHEN they need to hear from you.

In Conclusion
At the end of the day, acing email automation will take time and consideration. But once you’ve set your foundations you can turn it on and let it do its job while you focus on other things. Just like the trusty old rob-vac!

If you’d like to learn more about how you can harness email automation to nurture and convert customers, I will be presenting several sessions on the topic in coming weeks and months. Check out the Retail Global and Online Retailer for more information.

Happy automating!

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