Minority of companies use personal approach in e-mail marketing

Original version published on Twinkle Magazine (Dutch)

March 13, 2015 - E-mail marketing is one of the most successful marketing channels with low investment and high ROI. But as consumers receive more and more e-mail in their inbox every day, you have to stand out from the rest. One of the keys to success is to personalize e-mail campaigns to increase relevancy.

In an investigation of the majority of the Dutch Twinkle100 web shops, Pleisty and Copernica reviewed during a 4-week period how these e-commerce companies are using personalization on their e-mail marketing. Spoiler alert: There is much room for improvement!

Research method

We created two e-mail accounts and signed up for the newsletters of the Twinkle100 companies. After registration we reviewed a few products from one category. For example: for fashion shops one of the profiles impersonated a woman, while the other impersonated a man. In the newsletters we received we only clicked on products from the same category as we viewed in the web shop.

Use of data

Many web shop owners struggle with the question what they want to ask their subscribers. Requesting more information means more input for personalized e-mail. But each extra question in the sign-up form results in a lower conversion. Research from Dan Zarrella (2010) showed that conversion increased with 50 percent when the number of questions decreases from four to three.

55 percent of the web shop owners asked for more than only the e-mail address. For example name (49 percent), sex (38 percent) and birth date (16 percent) was asked regularly.

Of the web shops that asked for a name, only 33 percent used it in the salutation in the newsletter, and only 7 percent used it in the subject line. Even though research shows that using the name in subject and salutation has a positive effect on open and click rates. But this depends on your target market. An A/B test will tell you if you should use the name in salutation or subject line.

As web shop owner something to consider. Do not ask for data if you do not intend to use it.

Preferred categories

A newsletter that is relevant for the receiver increases conversion. Research from Capgemini shows that a personalized e-mail creates up to 18 times more revenue than a generic bulk e-mail. That should be a compelling reason for a web shop owner to adapt the newsletter to the preferences of the receiver.

But in reality only 2 percent of the Twinkle100 web shops use the preferred category of the e-mail receiver, even if they asked for it explicitly during the registration process. It should be pretty simple for fashion shops to differentiate between men and women. If a man clicks only on men clothing, you can assume that he has a preference for fashion for men, not for fashion for women. Electronics, generic retailers and drug stores did not make use of the preferred category in their e-mail newsletters either.

Winning back customers

Abandoned-cart campaigns are e-mails that are sent when a customer does not complete a purchase. This is a unique opportunity for a web shop owner to bring a customer back to the shop. Research shows that 20 percent of the customers that do not complete their purchase will order when they receive a reminder per e-mail.

For this part of the research we placed a product from the previously selected preferred category and we stopped the purchase when the payment page was shown. Our research shows that only one third of the web shops uses an abandoned-cart campaign.

Room for improvement

It is clear that there is much room for improvement for web shops. Only a minority of the Twinkle100 companies uses personalization or abandoned-cart campaigns, although setting up these kind of campaigns should not be too difficult. A good example is the web shop of wijnvoordeel.nl that is using the personalization tool from Pleisty with e-mail marketing software from Copernica to offer the wine that fits perfectly with the preferences of the individual customer. It brings 58 percent more orders per customers that clicked on recommendations compared to customers who did not.

Web show owners need to be aware of what information they have collected from their customers, and how they can use it effectively to be more successful in their online campaigns.