Strategic Email Marketing Programs - BlueHornet Whitepaper

©2011 BlueHornet Networks, Inc. A wholly owned subsidiary of Digital River, Inc. | BlueHornet.com

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©2007 BlueHornet Networks, Inc. A wholly owned subsidiary of Digital River, Inc. | (619) 295-1856 | www.BlueHornet.comBlueHornet.com

BlueHornet Whitepaper

Strategic EmailMarketing ProgramsAdvanced messaging tactics proven to drive better results and increase ROI.

Executive SummaryNearly all interactive marketers use email, and they expect it to increase in effectiveness over the next two years. But research indicates that most email campaigns don’t deliver expected results, leaving marketers wondering how they can increase the strategic value of their email programs to close the gap between expectations and actual results.

This whitepaper highlights some of the industry research on strategic email marketing maturity and provides detailed explanations of several advanced email marketing programs proven to increase email’s effectiveness and drive specific business objectives.


Table of Contents

4 . . . . . State of the Industry: Email Marketing Maturity4 . . . . . . . . Figure 1: Three Phases of Email Marketing Maturity

5 . . . . . Getting More Strategic5 . . . . . . . . Figure 2: The Customer Lifecycle

6 . . . . . Lifecycle Development

6 . . . . . Transactional Emails

6 . . . . . Segmentation

7 . . . . . Opt-Down7 . . . . . . . . Figure 3: Example Opt-Down Preference Center

7 . . . . . Welcome Series

8 . . . . . Abandoned Cart8 . . . . . . . . Figure 4: Abandoned Cart Program Anatomy

8 . . . . . Social Email

9 . . . . Lead Nurture9 . . . . . . . Figure 6: Lead Nurture Program Anatomy

9 . . . . Personas

10 . . . . . Win-Back10 . . . . . . . . Offer-Based10 . . . . . . . . Content-Based10 . . . . . . . Figure 5: Example Content-based Win-Back Program

11 . . . . Engagement

11 . . . . Video in Email

12 . . . . Text-to-Join12 . . . . . . . Figure 7: Chuck E. Cheese’s Text-to-Join Program

12 . . . . Conclusion

State of the Industry: Email Marketing MaturityResearch indicates that a majority of email programs are not yet sophisticated, and major brands still fail to measure the long-term benefits of their email programs. Figure 1 from MarketingSherpa’s 2011 Email Marketing Benchmark guide indicates that only 37% of email programs are in the strategic phase of maturity, with half of organizations “stuck” in between the trial and strategic phases.

It’s important to evaluate your existing email program and determine your current phase of email marketing maturity in order to find out where to start making improvements to your email programs. Some advanced programs should be implemented before others, so outline the business objectives you want to achieve using email, and choose the best programs to fit your current needs based on the results they drive.

Figure 1: Three Phases of Email Marketing Maturity

Strategic Phase37%

TrialPhase14%

TransitionPhase49%

We do not have process or guidelines for performing email marketing

We have a formal process with thorough guidelines we routinely perform

We have an informal process with a few guidelines we sporadically perfom

Source: MarketingSherpa Email Marketing Benchmark SurveyMethodology: Fielded Sep 2010, N=1,115

Three Phases of Email Marketing Maturity

Trial Phase Transition Phase Strategic Phase

Organization does not have a process or guidelines for performing email margeting.

Organization has an informal process with a few guidelines they sporadically perform.

Organization has a formal process with thorough guidelines they routinely perform.

Chart: Half of all organizations stuck between Trial Phase and Strategic Phase of maturity


Getting More StrategicThroughout the development of email programs, it’s essential to move customers through the customer lifecycle -- from acquisition to brand advocacy. Email marketing plays an important role in an effective multi-channel marketing strategy that can help create brand advocacy by engaging customers and driving them to higher lifetime value through increased relevancy.

While strategic email marketing programs drive customer loyalty, and ultimately, more revenue, it can be difficult and time-consuming to execute these programs. We recommend that you take a phased approach. Make a commitment to implement 2-3 new programs each year. Over time, you’ll form a sophisticated email program that will become a powerful asset to your bottom line.

Each strategic email program covered in this whitepaper targets customers at different points in the customer lifecycle as shown in Figure 2.

Figure 2: The Customer Lifecycle

Let’s take a closer look at some of these programs and how they can improve email’s impact on your overallmarketing goals.

Aquisition Subscribers Converters Loyalists Influencers

Relevancy

Life

tim

e V

alu

e

Social Email

Engagement

TransactionalSegmentation

Lead Nurture

Text to Email

Video in EmailWelcome

Win-back

Opt-Down

Personas

Abandoned Cart

Lifecycle Development

Lifecycle DevelopmentDeveloping programs that meet the needs of the consumer based on their position in the purchase lifecycle is vital to an effective email channel. During the lifecycle development process, it’s important to implement programs based on existing engagement and customer need. From a newly acquired subscriber, to a loyalist or an influencer, each stage must have programs that speak specifically to each consumer.

So how do you determine the stage in which your subscribers currently sit within the lifecycle? Here, it’s all about data, so work with your email service provider to integrate your commerce, social media, mobile and web analytics data and build out complete subscriber profiles. Once you have this data funneling into your email program, you can create segments based on activity distinctive to each stage of the customer lifecycle.

To identify subscribers in the converter stage, for instance, you’ll want to pull a record of customers whose email opens and clicks have resulted in them making a purchase on your site.

Taking a phased approach is often beneficial - weighing the impact of each initiative against another to determine priority and developing programs that contribute to lifetime value and relevancy over time.

Transactional EmailsOn average, transactional messages represent about 4% of a company’s email volume, can have 60% open rates, and can produce 30% of the total revenue for an email program. With these numbers, it’s surprising that many companies don’t take advantage of this prime revenue source.

While transactional content such as order confirmations and shipping notifications should be the central focus of transactional emails, companies often include a small portion of up-sell or cross-promotional content – roughly 20% in accordance with the “80/20 rule.” By incorporating relevant product recommendations, a newsletter opt-in call to action, or links to your social media profiles, transactional emails can drive incremental revenue and move customers in the converter stage of the lifecycle toward the loyalist and influencer stages.

It’s important to understand many interconnected components that should be considered when developing a transactional email program, including CAN-SPAM requirements, third party dynamic content integrations, HTML vs. text, sending times, etc. This information is available in another BlueHornet whitepaper titled “Best Practices for Transactional Emails”.

SegmentationIf you’re working towards a more sophisticated email channel but don’t know which new program to implement first, a segmentation program can be a powerful starting point. Relevant email content is integral to higher retention and conversion of customers as well as deliverability within many ISPs. In order to increase relevancy, marketers must use available data to segment subscribers and deliver the right message, at the right time, with the right content.

Basic segmentation starts at the acquisition stage when customers fill in their contact information and select their communication preferences. Each of these data points can be used to message subscribers uniquely, such as state or zip code to send relevant information about brick-and-mortar locations in their area. Once customers have signed up to receive emails, engagement metrics like opens and clicks can be used to segment subscribers further based on their interest level with the brand.

But advanced email marketing moves beyond stated preference and email response data and should incorporate any information that the marketer can gather about the consumer over the course of the lifecycle. Data integrations with website activity and e-commerce transactions can be tied into subscriber profiles, and from this information, marketers can build out more intricate segments and develop content that is more targeted towards specific consumers.


Opt-DownStudies have shown that the top two reasons for a subscriber opting out are too many emails and irrelevant emails. Historically, opt-out mechanisms have served to simply remove someone from a list completely. Recently, strategy has shifted toward a concept called “opt-down.”

Opt-down gives the consumer choices about the emails they get. For example, they may change the cadence of emails they receive (1 per week, 3 per month) or change their topic preferences (more information about X and Y, and nothing about Z). Given a choice, marketers would rather communicate more relevant information to a subscriber than lose them completely.

Your subscriber preference center is the key component of a successful opt-down program, so you need to decide what options you’re going to give your consumers. There’s no one-size-fits-all approach to this type of program, but generally speaking, providing options for frequency and content is a great start. Once your preference center has been updated, change your unsubscribe link verbiage in the footer of your emails to something like “Unsubscribe or change your preferences,” or provide two separate links altogether.

Welcome SeriesA strong relationship with customers is critical to the success of email programs, so it’s important to start the customer relationship on the right track. A welcome email series helps to begin building that relationship.

When considering how to put together the strategy for a welcome series, think about short and useful information that will actually benefit the customer. Do you have a niche product? Or maybe your company has a great story to tell? Sometimes it’s difficult to communicate that story in a single welcome email. Here, a welcome series can help. A welcome series is a simple way to educate your subscribers on the value of your brand, company and products.

This series of emails is sent when a subscriber joins the email program. They should strengthen the subscriber’s knowledge of your company and their relationship with the company from the start. A welcome series generally follows these guidelines:

• Educational- or relationship-based• Not too sales focused• Highlights a product, service, common problem, or brand value • Contains more copy than a promotional email• Look and feel is reflective of the brand

For example, a cosmetic retailer would like to share information about their products and services. Through a welcome series, they develop two emails that talk about how the products are made, the charities that benefit from certain purchases, or how the founder uses the product.

Figure 3: Example Opt-Down Preference Center

Abandoned Cart Abandoned cart programs are remarketing communications designed to recover lost revenue by online shoppers who add items to their shopping cart, but do not end up completing the transaction. By integrating online shopping behavioral data with email marketing customer profiles, retailers are able to send targeted messages to customers who leave their sites with items left in their carts.

Abandoned cart strategies have changed over time. In the past, marketers avoided the “big brother” mentality by sending emails 1-3 days after the cart was abandoned. Today, messages are sent instantly and incorporate a more relational tone, which minimizes the “big brother” feeling and resonates better with consumers, leading to higher conversions.

An abandoned cart program may seem difficult to implement if you, like many other retailers, use separate vendors for your e-commerce transactions and your email marketing communications. However, leading providers like SeeWhy are able to integrate commerce data points with your email subscriber base, making it easy to set up and automate abandoned cart programs.

For example, cart abandonment service provider SeeWhy has seen between 15% - 50% of carts recovered when the user is contacted within minutes of the abandonment using a relational strategy– answering further product questions, providing site assistance, offering discounts, etc. This approach should be considered when putting together the strategy for an abandoned cart program.

Figure 4: Abandoned Cart Program Anatomy

Social EmailSocial email combines preference and activity data from both email and social media channels to provide a more comprehensive view of your customers that can be used to increase relevancy and drive deeper engagement with your brand’s social influencers.

A social email program can also drive acquisitions on both channels – social media can be used to acquire new email subscribers, and email marketing can drive social media engagement. Including social media profile links within your email template or incorporating an email sign-up widget on your Facebook page are two ways to build your audience on each channel.

By integrating engagement metrics on both channels, social email allows companies to identify their social influencers and message them uniquely based on their social media preferences and behaviors. What began as “forward to a friend” has evolved into “share with your network” – a new component of email we’ve seen emerging in the past year that has proved to be an effective tactic for identifying a brand’s social influencers.

Building segments based on email-driven social media engagement allows you to target subscribers in the Influencer stage of the customer lifecycle with purchase-driven messages they’ll want to share, allowing you to extend your brand reach and increase the ROI of both channels.


Lead NurtureLead nurture campaigns (also called drip campaigns) are used to automate communication with customers in an effort to keep the sender “top of mind” with the customer. In a B2B application, companies use lead nurture programs to communicate with sales leads in situations where the sales cycle is longer than a typical B2C sale – sometimes up to 30, 60, or 90+ days. Lead nurture campaigns offer an effective way of communicating with customers over a longer period of time. Rather than a heavy “buy” message, lead nurture programs generally take an informational approach that relies on content marketing information, with the end goal being to enable prospects to make an educated purchase decision when they are ready to buy.

Lead nurture programs aren’t limited to B2B communications, though. Think about consumer products that typically require a longer period of purchase decision making, such as cars, homes, televisions, or vacations. With a lead nurture program, you can help consumers make decisions on their future purchases by sending informative content related to the product over the course of several weeks.

For example, a consumer electronics company notices that consumers shopping for flat panel televisions usually visit their site multiple times in a 30 day period before making a purchase. By developing a lead nurture email stream for these consumers around the best televisions the site has to offer, including user reviews, consumer electronics reports, and benefits of each type of television technology, the company can automatically deploy one of these messages every week for the next three or four weeks, depending on the typical sales cycle. By the end of the program, these consumers should feel well-informed and confident that they’re choosing the best product to meet their needs.

Figure 6: Lead Nurture Program Anatomy

Wait7 Days

SubscriberAdded

Send Product Intro

Product Highlight #2 (*With Offer)

Send ProductHighlight #1+

Wait1 Day

If lead clicks

If lead doesn’t click

Wait7 Days

Product Highlight #2

Wait14 Days

1

1

1

2*

2

PersonasPersona development is the process by which a marketer aggregates the typical characteristics of people that use or buy their products and services to better recognize ideal customers and reach them based on those characteristics. It can play a significant part in determining the voice and message that is used to communicate with consumers. Knowing the consumer persona and their motivations allows for relationship building and more relevant messaging.

Different communication methods are used for each persona to get the consumer to convert. For example, communications would look different when emailing an “impulse shopper” vs. a “loyal shopper;” or, a shopper who consistently pays full price vs. a shopper who only purchases with a discount.

To develop a persona program, you need to identify trends in the email consumption and shopping habits of your subscriber base, and build segments within your email database around those trends that are consistently updated with accurate data. Once you have those segments in place, you can message to these persona groups uniquely to drive deeper engagement and higher ROI within your email program.

Figure 5: Example Content-based Win-Back ProgramWorking with the BlueHornet strategy and creative services teams, SnagAJob.com created a win-back campaign comprising a series of three emails designed to re-engage subscribers who had not opened, clicked, or submitted an online application in three months. By implementing this program, SnagAJob.com was able to re-capture over 10% of the initial target population back into their email program.

If subscriber opens or clicks

Day 1 Day 6 Day 9

No activity(opens or clicks)

for past 9 months

If noactivity

If noactivity

If noactivity

Re-activated SegmentRe-introduced into regular cadence of SnagAJob.com emails

In-active SegmentIsolated these subscribers and only send emails to them on a limited basis

Win-BackAttrition is a challenge for many companies. Customers abandon email programs for a variety of reasons, so it’s important to put programs in place to prevent this attrition and minimize its impact on revenue.

Win-back, or re-engagement programs, provide a cost-effective way for companies to contact both long- and short-term attrited customers by using targeted messaging to re-engage them. Successful communication with these consumers will be important to the longevity of the retained customer.

There are two major types of win-back programs to consider: offer-based and content based.

Offer-Based

For e-commerce sites, offer-based win-back programs provide the consumer escalating value offers that are not normally available to the consumer. The end goal is to make the customer an offer they can’t turn down, with the most aggressive incentive occurring in the last email. When creating an offer-based win-back program, it’s important to limit the duration of the promotion to encourage a sense of urgency. Also, make the offer codes exclusive to the individual to prevent coupon sites from picking up the offer.

Content-Based

For content or non-sales sites that offer articles, loyalty or rewards programs, or free services, these win-back programs offer email subscribers articles or value propositions to re-activate their interaction with the site or service. The key to success of the program is relevancy, so speak to topics that may have prompted subscribers to join in the first place. Additionally, value propositions, like a program or site re-launch, should be done in the first email of the series. Figure 3 demonstrates an example content-based win-back program from SnagAJob.com, the nation’s largest job search site and most active community of full-time and part-time hourly workers.


Here are some additional tips on setting up your win-back programs:

• Keep the email design/content short and simple with clear calls to action.• Rest the audience that you are trying to win back for 21 - 30 days prior to the launch of the program.• Keep your win-back audience out of the main email cadence while the program is running.

If you cannot win the customer back, then you have a few options. Based on the increasing focus of ISPs on engagement, you want to tread carefully in emailing customers if they are not engaging through email. Here are some suggestions that you can use for those that don’t re-activate:

• Isolate the inactive and send less often. When you do send, make sure it’s highly relevant.• Analyze customer activity across your other channels.

• Evaluate response activity across Facebook, in-store, loyalty programs, etc.• This information can help you determine the most engaging content to send to less active subscribers.

• Look at the purchasing/browsing frequency of attrited customers.• What are the similarities? Habits?• Did they join at the same time or through the same source?

You may discover that your email program is prompting desirable activity across other channels. So don’t lose sight of your overall business objectives.

EngagementResearch shows that when it comes to email, many marketers resort to what’s simple and easy - batch and blast. We know it’s tough to avoid the batch and blast mentality, but email actually performs better and provides the highest ROI when you successfully connect and engage with the consumer by sending the right email at the right time.

When we talk about engagement programs, we commonly look to create programs that strengthen the relationship with consumers. This doesn’t always include messaging intended to sell them something. Often, it involves content like additional product information, surveys, information on charitable activities – content that encourages building a relationship.

Engagement programs add value by keeping your subscribers interested in your company regardless of what it is you sell, and if well-executed, these types of programs can move your customers towards brand advocacy. Remember the customer lifecycle model mentioned earlier: The ultimate goal of your email marketing efforts should be to move customers from the acquisition to the influencer stage, so think of an engagement program as a tool to ensure steady progress from one stage to the next.

Video in EmailVideo in email is quickly evolving into a valuable engagement tactic. However, many marketers are unclear on its potential, and it remains a relatively untapped opportunity because of past challenges with available technologies, email client limitations, and deliverability. The “newness” of video in email can work in marketers’ favor – due in part to its less prolific presence in email. Video in email provides the potential for increased subscriber interaction, viral growth, and a highly differentiated inbox experience.

Video content on the web enhances the online shopping experience by providing detailed product views and has proven to increase conversion rates, so it makes sense that incorporating in-email video can drive equally positive results for email engagement.

Video content providers such as Liveclicker have developed specific technology designed for in-email video using HTML5 supported by all major email clients. To account for rendering differences among mail clients, Liveclicker detects each subscriber’s mail client in real time as the email is opened and delivers a compatible video asset automatically. By simply uploading a video to the Liveclicker platform and copying HTML5 code generated by the solution into your emails, video content has never been easier to include in your email campaigns.

Text-to-JoinConsumers, more than ever, are on the move and active in their lifestyle. Because of this, email acquisition is also shifting from traditional methods like point-of-sale capture, handwritten sign-up forms, and website capture, to more mobile acquisition tactics.

With the increase in adoption of SMS (text) messaging, marketers have the opportunity to collect information from consumers on the spot. By texting their email address to a short code provided by a mobile partner, marketers are able to collect accurate contact information instantly, and send follow up messaging instantly in return. This means of data collection has various uses -- events, signage, commercials and other mediums where the consumer is on the move and more apt to subscribe via mobile than through other means. Figure 7 below highlights an example of a text-to-join program we developed with SmartReply for Chuck E. Cheese’s.

ConclusionAs marketers continue to invest in email marketing, it will be increasingly important for the email channel to deliver higher response rates. Strategic email marketing programs engage customers at specific points in the lifecycle and move them toward brand advocacy, but it can be difficult and time-consuming to implement these types of programs. Taking a phased approach will help you identify the programs that will make the biggest impact on your bottom line, and over time, as you adopt more advanced messaging tactics, your email program will evolve into a key revenue driver and asset to your business.

Figure 7: Chuck E. Cheese’s Text-to-Join Program


If you’re one of many email marketers wondering how to increase the strategic value of your email marketing campaigns with limited internal resources and budget challenges, we’re here to help. We know how time-consuming and complicated building out many of these programs can be, so we’ve recently launched a new feature called Strategy Blueprints designed to ease the transition towards more strategic email marketing initiatives.

BlueHornet Strategy Blueprints are pre-built email program creation wizards that allow you to quickly piece together advanced email programs through a simple step-by-step process. As you create and implement individual components of each program, the Blueprint will automatically track and indicate which pieces are complete and which ones you still need to do to complete your strategy. BlueHornet’s Strategy Blueprint programs are easy to implement, automated, and repeatable, allowing you to unlock the potential of your email channel and drive higher ROI.

Additionally, BlueHornet’s Strategic Services team is available for short or long-term engagements to help you optimize your current email program or launch new email campaigns designed with your specific business objectives in mind.

Contact us today at [email protected] or (866) 586-3755 to learn more.

BlueHornet2355 Northside Drive, Suite 250San Diego, CA 92108

http://[email protected](866) 586-3755

Twitter: @bluehornetemail

Strategic Email Marketing Programs - BlueHornet Whitepaper

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