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HostGator Uses Retargeting to Sink Its Teeth Into Double-Digit Revenue Growth

Customers are fickle. Just when it seems like they’re ready to purchase, they abandon their cart and marketing is charged with luring them back to buy.

Shopping cart abandonment emails can be an effective tactic for clinching the conversion. In fact, 35% of the top 100 retailers send at least one shopping cart abandonment email, according to Listrak’s “2015 Shopping Cart Abandonment Research Study.”

Web hosting company HostGator learned the value of email retargeting when it hired marketing solution provider Ve Interactive to bring abandoned shoppers back to the point-of-purchase.

A new way to target

Before working with Ve, HostGator would primarily retarget customers via Google—such as by showing them ads on YouTube after they left HostGator.com. But the Web hosting company wanted to find a more efficient way to remarket to customers during their moment of interest, instead of simply waiting for them to go somewhere else. So, about a year ago HostGator decided to implement VeContact—an email retargeting tool.

Here’s how HostGator’s retargeting works: When customers purchase a hosting service, they’re asked to enter their email address as part of their billing information. Once they provide their email address, HostGator is able to capture it—even if they don’t complete the purchase. If a customer does abandon his cart, HostGator will send that customer an email containing a link to his cart, a discount, and an invitation to come back and purchase. HostGator segments these emails by product. So, a customer looking at a dedicated server will see different email creative than a customer looking at WordPress hosting.

If customers don’t provide their email address, then HostGator falls back on its standard retargeting technique with Google.

“[This approach] is allowing us to get access to people who have bailed out of our checkout flow, and then we can address specific concerns…and reengage those people,” says Chris Whitling, HostGator’s director of marketing.

Success on Black Friday and beyond

HostGator experienced great success with this approach over Black Friday weekend. The Web hosting company offered site visitors a 65%-off discount and reminded them of this promotion in its abandoned-cart emails.  It also held a one-day flash sale after Black Friday that was available only to visitors who had failed to complete their purchase.

In addition to generating open and click-through rates of 47% and 13%, respectively, the campaign produced an average conversion rate of 12%, an average order value of $128.77, and an uplift of 63% in daily recovered revenue, according to Ve. And HostGator has been able to carry over this success past the holiday season. From September to December 2015 HostGator generated average open rates of 48% and average click-through rates of 24%, Ve reports. It also garnered an average conversion rate of 11% and an average order value of $115.20 during this time frame.

“I wish that my standard email marketing had [these] kind of stats…. It just doesn’t happen,” Whitling says.

Separate strategies

HostGator considers its remarketing program a separate entity from its standard email marketing program. Whitling views the former as a customer acquisition tool and the latter a customer experience and service tactic. The standard email marketing helps customers use their product to the fullest extent, he says. These emails provide onboarding content, educational materials, and technical support. “If they’re getting use out of the product, they’re going to renew,” he says.

HostGator’s remarketing emails do “a lot better” than its standard marketing emails mostly due to their relevant timing, Whitling points out. “The person is already focused on buying from our company and Ve just helps us push them over the edge,” he says. “It’s almost like the online version of dealing with rejections, which you can’t really do traditionally online.”

Based on the success of the remarketing initiative, Whitling aims to bring more of this relevancy to HostGator’s standard email program. Although HostGator already segments its standard marketing emails more than its retargeting emails—such as by product, product category, and purchased upsells—Whitling says he’s aiming be more timely with the messaging.

“Hopefully, by the time we’re done this year, there’s going to be no more ‘Let’s email the entire base,’” he says.

It looks like this gator is ready to chomp up that old batch-and-blast model.   

*Updated 2/9/2016: An earlier version of this story said that HostGator’s Black Friday campaign generated a 12% average click-through rate; however, this was a 12% average conversion rate.

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