A&E network's e-commerce gets boost from e-mail overhaul

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CHICAGO - A&E Television Networks had a problem: How to drive viewers of its shows to become customers of an e-commerce store that stocked 6,000 DVDs and other paraphernalia related to that content?

The answer lay in more targeted and relevant e-mail marketing to a database comprising consumers who have watched the History Channel, Biography Channel and A&E TV shows. AETN Consumer Products turned to MBS, Central Islip, NY, for a two-year-long e-mail marketing makeover that has yielded ROI through relevance.

"Targeted communications based on segmentation and relevance increased response forty times over regular general communications," said Corry Devin, marketing manager for consumer products at AETN Consumer Products, Stamford, CT.

She was addressing a session yesterday at the 53rd annual Chicago Direct Marketing Days & Expo hosted by the Chicago Association of Direct Marketing. David Braunstein, vice president of consultative services at MBS, shared the podium.

MBS had its work cut out. AETN has a disparate audience for its various show-based video products: educators, club members, online store customers and online content consumers. The goal was to craft communications that continued the customer experience continuum.

Upon winning the assignment, MBS dug into the database. It unearthed product, recency, frequency and monetary value information; click- and open-rate activity; occasion- and event-based data; inferred and stated affinities to AETN clubs; and customer status.

The other task was to consolidate data that was previously siloed, including e-mail-related information to link buyers to activity online.

What MBS discovered was startling. Seventy-seven percent of the active customers' file - 260,000 households over a 12-month period - bought from only one of AETN's brands, A&E or History Channel, and a third-party who licensed the product.

"When they were mailing, they had a limited amount of relevance," Mr. Braunstein said. "They could send out e-mail but they didn't have prior purchase history."

It was quite clear that the e-mail program needed work. AETN's Ms. Devin had to ask herself: What was the customer expecting from her brand and when were they expecting it?

"We really recognized we were doing nothing to speak to our customers," Ms. Devin said.

A four-level evolution took place. First was the mass e-mail. The company was mailing a high quantity of messages to pitch a wide product selection without any obvious tie-ins. The click-to-conversion rate on these e-mails was 0.51 percent.

MBS helped AETN craft the messages based on purchase history, branding the e-mail, logo, subject line and navigation. There was a 19.7 percent increase in purchase conversions.

The second e-mail is one that is genre-based. Each particular AETN brand has a choice of six or so genres. For example, the History Channel products have a wars genre and A&E on baseball. Such e-mails yielded a 45 percent increase in purchase conversion.

The targeted e-mail is the third sort. It includes welcome and reactivation e-mails as well as product- or selection-specific messages with more content around them. Surveys and trivia are also thrown in. This approach resulted in a 7.3 percent jump in purchase conversion.

Finally, there's the super-targeted e-mail. High-priced items are offered at a huge discount to customers who have been identified as enthusiasts of a particular product line. The package was specifically created for this audience. It worked. The "Tales of the Gun" DVD sold merchandise worth $40,000 to $50,000 through such e-mails.

AETN typically sends one e-mail a week - in some cases, two. The company keeps tabs on the subscription and open rates to gauge customer response to frequency of messages mailed. They test the days of the week they mail and shift accordingly.

Of course, this effort is still a work in progress. Take an increasingly key issue as the program becomes more sophisticated.

"How can we set up those business rules as people qualify for different offers?" Ms. Devin asked.

Ms. Devin said AETN's response to the new anti-image settings of new e-mail clients such as Outlook 7 was to add copy at the top of the message above the graphic. This way, the reader had some idea of the product if the image didn't render.

"It's a difficult challenge: Are there more opportunities with rich media or Flash e-mails?" she asked.

Overall, AETN ended up with several lessons learned through its new approach to e-mail marketing.

First, establish success metrics upfront. Second, start slowly and test one metric at a time. Third, concentrate on conversion and recognize that e-mail open rates experience natural caps, as AETN has seen. Fourth, reassess ROI as the target audience narrows. Fifth, look at product configuration. Finally, be willing to experiment with the pricing model.

The growth of the e-mail program has led to an "80 percent, 90 percent, 100 percent increase in revenue year over year using the same list," Ms. Devin said.

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