Personalized e-mails prove most effective

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For Build.com, an e-commerce site that sells home improvement items, sending personalized e-mails is a great way to drive sales. In May 2010, the company began working with e-mail marketing service provider, Responsys, to send personalized e-mails to customers who had visited its site, added items to a shopping cart but did not make a purchase. The company says that abandoned shopping cart e-mails, tailored to the customer's behavior, bring Build.com 9,800% more revenue compared to its standard promotional marketing e-mails.

“This e-mail is sent a couple of days later, as a service reminder,” says Daniel Reardon, the e-mail marketing manager at Build.com. “It is personalized to what that customer has been doing. We want to be relevant to the customer and provide them with information that is obviously top of mind for them,” he said.

Another Build.com practice is to send personalized welcome e-mails after a customer has opted in to its e-mail list. These e-mails show an impressive 5,000% increase in revenue per e-mail, as compared to Build.com's generic marketing e-mails.

“It is all about the ability to create more relevant, more targeted and higher performing e-mails and campaigns,” adds Scott Jones, director of product marketing and partner strategy, Responsys. “Personalization is one of the mechanisms to make that a reality, and it provides more reasons for a customer to open it, click on it and engage with it.”

E-mail volume has grown exponentially over the past couple of years and is expected to continue to grow quickly as more marketers execute e-mail campaigns. Forrester Research predicted in its April 2009 US Interactive Marketing Forecast Online Survey that the industry will balloon to $2 billion by 2014. In addition, it found that 92% of respondents currently use e-mail marketing.

“The generic, one-size [for] all stuff doesn't work anymore,” adds Paul Rosenblum, VP, products and strategy at MyBuys, a company that specializes in personalizing e-commerce companies' customer messages for e-mail and the Web. “When you personalize e-mails, you get much higher open rates and much higher click-through rates. As consumers get more clutter in their inboxes, this is more important than ever,” says Rosenblum.

According to Andrea Orvis, e-Dialog's group director of strategic services, a high number of consumers ignore e-mail messages they find irrelevant. Current customers or prospects might also find irrelevant e-mails annoying. This makes “personalization more important than ever,” says Orvis, adding that personalization “increases interactivity and it makes the e-mail worth reading and waiting for.”

Brands like Build.com are using purchase behavior and a person's browsing activity on their sites to personalize their customer e-mails and address oversaturation in the marketplace.

Travel site LowFares.com employs a similar method. If a customer has browsed the LowFares.com site and clicked on an offer for Hawaii, but not booked, that individual might get a follow-up e-mail about potential beach vacations if they have already opted in to receiving e-mail from the company. LowFares.com also sends e-mails based on a user's preferences. Consumers can set some of the preferences themselves when they sign up for the e-mail program. Their other preferences are inferred based on site behavior.

“The strategy is to find the most compelling ways for us to engage users,” says Greg Samson, general manager, LowFares.com. “The expectation is that providing a personalized experience, we'll get increasing levels of lifetime performance.”

LowFares.com furthers its personalization methods by sending triggered e-mails based on a person's home airport and travel destinations. Working with marketing services firm Datran Media, the e-mails are sent in real time based on behavior, in order to increase relevancy. For example, if a consumer books a flight to Las Vegas, LowFares.com will send them a follow-up e-mail with a city guide to Las Vegas with suggestions on restaurants, entertainment, local attractions and other potential booking options.

The company also personalizes e-mails based on the customer's travel dates. “If we know the dates a traveler is looking for, then we enter a user into a personalized drip campaign,” Samson adds. “There are different needs that a traveler has based on how far they are out from those travel dates, so we can trigger different types of offers as their travel dates approach.”

Timing tactics can be useful. LowFares.com also owns Aboutairportparking.com. According to Samson, most users book airport parking within 72 hours of their travel, so if LowFares.com knows the travel date and their home airport, it sends a personalized e-mail, offering a discount on parking a couple of days before a booked flight.

The travel site sees a two to three times increase in performance on its personalized e-mails versus its general e-mails. The company also enjoys 50% higher open rates in e-mails that are personalized versus those that are not.

For Isabellacatalog.com, an e-commerce site owned by Chinaberry that is dedicated to selling New Age merchandise, sending personalized e-mails is the best way to recreate the in-store and call center experience. The e-commerce company sends e-mails based on a customer's browsing history and purchase history. If an item that an individual has clicked on goes on sale or a customer abandons their shopping cart, the company sends a personalized follow-up e-mail.

“Rather than just segmenting, we are using these personalized alerts triggered by new products on our website,” says Stephen Fuller-Rowell, director of e-commerce at Chinaberry. “We are reducing the segmentation down to one, where each customer is a segment. This mirrors the traditional relationship between the customer and salesperson in a retail store.”

During the fourth quarter of 2009, Isabella saw a 2.5% conversion rate from its broadcast e-mails and a 7.8% conversion rate on e-mails that it personalized. The average order size on Isabella's broadcast e-mails is $70.95, but it increases to $77.66 for personalized e-mails.

The online retailer is now applying the same personalization information it learned from e-mail to its website functionality. The site behaves a bit more like a salesperson who remembers a return shopper or browser. When a customer who has previously visited the site returns, he or she will see products personalized to reflect previous interests. “We are not loading the dice toward any type of product category; it is determined by how the customer is reacting with the products on the website,” says Fuller-Rowell.

It's not just retailers that benefit from sending customized e-mails. Personalization can work for all types of companies. Rentals.com personalizes its b-to-b e-mails. The site works with e-Dialog to send triggered messages to landlords and homeowners before listings expire to see if they would like to renew their advertising. The company reports a 50% increase in conversion rates from these e-mails.

“In order to personalize these e-mails, we populate them with all of the customer's listings,” says Steven Chung, marketing manager at Consumer Source, the company that owns Rentals.com. “They can renew their listings with one click, which makes it very easy for the customer. We are putting them right in the shopping cart.”

As e-mail volumes go up and as channels continue to merge, expect more personalization in e-mail and across channels down the road. “Marketers that are still doing the most basic stuff that they were doing a few years ago are not going to cut it in today's market,” says Rosenblum. “You have to personalize communications to make sure that the consumer thinks that your messages really do have value.”

“I think it will be very difficult going forward for companies to be making the same offers to everybody without being specific to the customer they are interacting with,” adds Fuller-Rowell.

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