E-mail gets personal

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Ryan Phelan, director of e-mail marketing at Sears Holdings Corp.
Ryan Phelan, director of e-mail marketing at Sears Holdings Corp.

After a rough holiday season, multichannel retailers are struggling to come up with the right ways to build customer loyalty. For Sears, a new e-mail and Web personalization program has helped keep the customer conversation going and allowed the retailer to respond to customers' needs.

Previously, Sears had simply relied on “batch and blast” e-mails to an entire customer list, but in June the company shifted its strategy to a content-driven approach meant to make the messages more relevant. It is a strategic move from a mass-media mindset into a very specific customized experience designed for the individual customer.

“It's not just putting the customer's name in the subject line,” says Ryan Phelan, director of e-mail marketing at Sears Holdings Corp., who, along with manager of e-mail marketing transformation Andrew Kordek, was hired to take charge of the new program. “We want to speak to the customer in a more intelligent way. The offers that are presented need to be relevant based on what a customer has expressed interest in.”

Since Sears began the new e-mail program, the brand began A/B testing with its e-mails, dividing them between a control group that does not receive personalized e-mails and a test group that does. Compared to non-personalized e-mails, the test group of personalized e-mails have seen a 41% increase in revenue per clickthrough, a 178% increase in conversion, a 59% increase in average order volume and a 215% increase in clickthroughs. Phelan attributes this growth to Sears' new focus on personalization.

“[This] will define our e-mail program going forward,” adds Phelan. “It is not only your name that makes it personal, but what you like, such as apparel and shoes and electronics. We are sending offers that we think a consumer will react to.”

While these numbers demonstrate sales growth, the Sears e-mail program is not just about selling — it is also about CRM and building customer loyalty. During last year's Thanksgiving week, Sears relaunched its e-mail preference center so customers can pick and choose to receive relevant communications — for example, they can sign up to receive information on new products, special discounts, set the frequency of their mailings and even sign up for mobile alerts.

“Letting the customer speak about what is important to them gives us greater flexibility and segmentation ability,” says Kordek.

Integrating the personalized message through all channels of communications is a core aspect of the program. Based on what a customer does in e-mail, direct mail and mobile alerts are then personalized to fit a customer's profile. For example, if a customer buys a flat-screen TV monitor, a mobile alert with information on how to sign up for a warranty could soon follow.

“We do not silo our channels — we try to keep on message at every touch point with the customer,” Kordek adds. “The e-mail provides a deeper insight and helps us reinforce the message of direct mail. It's about speaking to the customer in a more intelligent way.”

To show their commitment to this kind of personalization, the relationship marketing department includes all of the direct channels that they use, including e-mail, direct mail, Web and mobile. “If we are going to succeed as a retailer, then we need to be consistent across all channels,” adds Phelan. “The message that we send to our customers needs to be relevant, and we have transformed this across all channels of communication that we communicate.”

To promote the new e-mail program, Sears ran a coupon campaign that offered customers who signed up for the e-mail program a coupon for $10 off. The acquisition effort ran on the Sears site and at the point of sale at retail stores. Since beginning the promotion last June, Sears has seen a 50% growth in its e-mail list.

Sears is also in the process of experimenting with Rich Relevance, a company that offers personalized product recommendations, to add marketing messages in their transactional e-mails — the vendor also works with Sears Holding Corp.'s Kmart brand — but only if it makes sense for the specific customer. For example, if a customer purchases some towels and a children's game for six-year-olds at Sears.com, a transactional e-mail might also suggest other games for children of the same age.

“We are working to make sure that not only were we acting in response to compliance, but also to make sure that it is good for customer experience,” Phelan explains. “We've worked on strategy to provide a promotional message but keeping the mainstay of the message about the transaction.”

Video is also a part of the program. For the holidays, the retailer promoted the “Heroes at Home Wish Registry,” which encouraged shoppers to help military families with their Christmas wish lists. The e-mail included a video about a war veteran, as well as wish list items from the veterans and their families that recipients could click on to purchase as gifts.

Sears plans to continue with its personalized e-mail efforts, and use segmentation at an even more micro level to give customers a more substantial one-to-one experience.

“We really want to be able to speak to them in a very targeted way, one that is specific to their interests. This will build loyalty, as customers will see that offers are hand picked for them individually,” says Kordek. “If a customer goes on the site to buy a hammer, we will provide them with a cross-sell and upsell that would go along with a hammer to make the experience more personal.”

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