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Frederick's Tracks Leads, Segments E-Mails With Database Revamp

Two years ago, Frederick's of Hollywood needed to update its database and e-mail marketing program so it could track its key metrics: demand generation, conversion rates and orders.

“Our catalog business feeds our Internet business and vice versa,” said Jennifer Bedolla, director of online marketing. “It is vital for Frederick's to know where our leads originate.”

The Hollywood, CA, company switched from an outsourced service to Lyris ListManager, an e-mail marketing tool from Lyris Technologies, Berkeley, CA, and set up two mailing lists. One is a house file of people who made at least one purchase via the Internet. This prospecting list of more than 500,000 receives promotions reserved for current customers.

The other list is called the Star Club, which includes prospects who requested the company's e-mail newsletter. These people are likely to get an offer such as free shipping or a discount with a minimum purchase. Once a customer makes a purchase, “the name then goes over to the house file so we treat you as a customer rather than a prospect, and we don't double count,” Bedolla said.

With 160 U.S. stores, a catalog and Web site, the company has a lot to track. Frederick's sends a marketing e-mail twice weekly, on Mondays and Wednesdays, to the house and Star Club files. The company uses purchase history to create segments, which lets it send special mailings to buyers interested in lingerie products or those interested in shoes, swimwear or other non-lingerie products.

When Frederick's segments its database regarding purchase history and offers, Bedolla said, “we do quite a bit of testing on landing pages.”

If it has one segment that buys lingerie, “we will mail them an e-mail that has a specific lingerie image in it that will send them to a landing page that represents lingerie,” she said. “We'll also build out two or three other landing pages with different types of lingerie on it.”

Segmenting is done in-house, then forwarded to Lyris.

“In the future, we are hoping that we can do all [the segmenting] right in Lyris because it would make it easier,” Bedolla said.

Though e-mails are frequent, Frederick's maintains a low unsubscribe rate. Annual opt-out rates are 2.6 percent for Star Club and 1.2 percent for the house file.

“People really want to know about our new products, especially in the fall when we release a lot of new items,” she said. “They also like to take advantage of our Internet-only specials.”

Frederick's began a marketing campaign a year ago involving a series of e-mails to customers and prospects offering $10 off a $75 order, $20 off a $100 order or $50 off a $150 order. It remains the company's strongest offer.

“This promotion increased our average order value by 64 percent,” Bedolla said, adding that its second-best offer is for free shipping promotions.

The company also used Lyris to improve an e-mail signup program. For the past few years, a red banner on the Web site's home page included a “Sign Up for E-Mail” button.

“We wanted to test whether or not our signup for e-mail in the red is kind of just fading away and not catching very much attention,” she said. “We wanted to see if we could increase our signup for e-mail through using a callout on the home page.”

Frederick's added a callout message on the home page in April that says, “Want Special Offers? Sign Up for E-mail.” Customers click on a pink box that says “Sign up.” Results from the change were impressive. From June 2003 to March 2004, the average signup rate was 27 percent. But from April to June, after the new message was added, the rate rose to 41 percent.

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