Gazelle’s Patience Leads to a Big Marketing Payoff

There’s a sound reason why Gazelle isn’t leaping to bombard consumers with email marketing messages about the value of their existing cell phones, tablets, and other electronic devices.

“We recognize that our transaction cycles are relatively long,” says Carmen Vetere, vice president of marketing for the Boston-based e-commerce company that enables consumers to sell their gadgets and buy certified, pre-owned devices. “We have to be thoughtful about what we test in our email communications.”

Gazelle opened in 2007 and launched its “recommerce” site, Gazelle.com, in 2008. The company reports that it has paid more than $200 million for used phones, tablets, and Apple laptops, which it also resells. 

Vetere points to a careful approach to A-B testing along with sensitive timing and marketing technology as keys to Gazelle’s marketing approach. The overall object of the marketing effort, he says, is the cost-efficient acquisition of new customers, which helps drive overall business. “A high proportion of our [marketing] activity is focused on direct marketing to encourage customers to trade with Gazelle,” Vetere adds.

For example, Gazelle uses technology from ExactTarget (now Salesforce Marketing Cloud) to collect customer data—e.g., which phones they spend the most time looking at, either as a potential seller or buyer, when on the site—that’s used to target specific offers to that consumer at a later date. Identifying which date is a crucial process. After all, many cell phone buyers tend to upgrade once every one to two years, when their contract with a telecommunications provider concludes, when they switch providers, or when they want to upgrade their phone or tablet.

This cycle is “very different than a clothing retailer or a flash sale site that has a much higher customer engagement frequency,” Vetere notes. As a result, he says his team strives to maintain a presence in their 1.6 million customers’ inboxes “without inundating them with daily messages that would increase unsubscribe requests.”

One way to strike this balance is by timing email messages to customers who have demonstrated an interest in iPhones to coincide with the highly publicized new-launch events Apple periodically stages. Emails delivered during an Apple event performed extremely well: These messages accounted for more than 10% of Gazelle’s direct-from-email transactions last year, according to Vetere.

By way of comparison, Vetere points to MailChimp research that, as of early June, pegged the average open rate for an e-commerce company at 16.89%. Gazelle email messages directed to Apple-interested customers during various 2014 Apple events generated email open rates of roughly double that: 37.3% during an iPhone event; 32.4% during an iPad event; and 29.5% during a MacBook unveiling.

Gazelle’s marketing team also discovered that a customer’s second transaction occurs most often in the days following their first transaction. With this in mind, they programmed an email to send one week after customers are paid for their first trade-in. These messages have a 55.7% open rate, according to Vetere.

Most recently Gazelle has conducted A-B testing on incentive offers to customers who may want to sell their phones. The company typically has not provided this type of offer, in part because it already offers cash in exchange for the used devices. But the results suggest this may soon change. After sending different incentive offers (one for a 10% bonus on the listed price of their potential trade-in and one for 20% bonus), Gazelle marketers saw that the higher discount offer generated three times the sales volume as the 10% offer.

Vetere credits his “highly analytical team” for producing these types of insights to weigh. “Our director of email marketing spends a lot of time looking at the numbers and really trying to understand what messages drive consumer behavior,” he says. “We all think through what offers and messages might resonate with consumers. And we always work to ensure that we’re delivering the right message at the right time.”

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