Email marketing for E-commerce, Part 1. Where to start
Building subscribers base. Segmentation.
It is impossible for online stores to be successful without email marketing. Even though an online store might not deem it necessary to send regular messages with promotions, useful content and discounts, it still uses the email as a channel for service messages. We have developed and written a series of articles on email marketing in e-commerce for marketers and owners of online stores. The contents of these articles have been put together based on our decade of experience in the market.
In this first part of the series, we will elaborate on the benefits of email marketing for e-commerce, and the subsequent necessary actions to take after choosing this channel of communication. But first, we will provide answers to two vital questions which are: How to build a subscriber base? How to make it more efficient by means of segmentation?
Why Do Online Stores Need Email Marketing?
The importance of email marketing has already been explained in our article on why email marketing is the heart of any digital marketing strategy. And oh boy, it works so well for e-commerce! To put it briefly, email marketing helps to increase online store sales. Let’s elaborate:
- Email marketing increases repeat sales. Attracting new customers is more expensive than retaining old ones. Email marketing serves as a channel for keeping in touch with subscribers. This makes it possible for the subscribers to not lose sight of the store and come back to purchase goods and services;
- Email has high ROI. According to the Campaign Monitor, every dollar spent on email brings $44 in profits;
- Email helps to find subscribers in other channels. Email address is a digital user ID. It can be used to find subscribers on Facebook, Instagram and the Google Display Network. Here you can “catch up” on your customers and show them ads or appear in the news feeds of their social networks;
- Almost every online store customer has an email address. According to Radicati, there are over 3.9 billion email users worldwide in 2019, and this figure is expected to grow to over 4.3 billion by 2023. In comparison, it was reported that Facebook “Family”(Facebook, Instagram, WhatsApp, Messenger) shares 2.7 billion users in 2019;
- Email boosts associated sales. Associated sales do not come directly from the email marketing. For example, the online store ToYou.com which sells men’s shoes, sends a thematic newsletter to Sam every week. He reads it, but does not visit the website. The weather gets colder and Sam decides to buy new winter boots. He enters “ToYou.com” into the search box and purchases the product in just 2 minutes. This was an associated order. Meaning that Sam went to the website because he already knew about the store from the email.
Therefore, make a choice that will make you happy, by choosing email marketing and implementing all the tactics it can offer to raise your sales.
How To Build A Loyal Subscriber Database?
Now that you have opted for email marketing as a core element or a part of your marketing strategy, what do you do next? You need to build a subscriber database. And there are a few rules to follow.
To begin, mentioned below are the methods that can not be used to build a subscriber database.
Methods That Can’t Be Used:
- Base purchase. Even if you are offered a 100% valid base with subscribers on your topic;
- Collection of subscribers from open sources. Open sources are social networks, forums or bulletin boards;
- Adding people from your inbox. It happens that a marketer simply adds everyone who once wrote on a corporate or personal box to the database;
- Software to search for addresses. Programs such as parsers, look for open addresses on websites and compile them into one database. We don’t know what these addresses are, where it comes from and who owns them;
- Automatically generated database. The method is similar to the previous one. But in this case, the program creates random addresses and adds them to the database. The chances that such contacts will be real are very small.
It’s illegal to use any of these steps while collecting user information and sending any kind of content to them. All these methods are prohibited by the American CAN SPAM and European General Data Protection Regulation.
Mentioned below are the reasons why all these methods are ineffective, besides the illegality:
- The companies do not have the consent of the subscribers. When the first email is received, they will send it to spam or unsubscribe;
- Poor base quality. There are many invalid addresses in the purchased databases and databases from open sources. Mails will not come to these boxes;
- There is no way to tell what kind of people get into the base. It’s impossible to gather the target audience from open sources and purchased bases. The general public will not be interested in music store offers or children’s products;
- Emails will get into the spam or will be blocked in any case. To get into the inbox, the email passes 3 lines of control: in the email marketing platform, in the postal service and in the subscriber’s email box. Emails that are received without consent can be blocked at any of these stages.
Furthermore, in this article, the various ways to appropriately build a subscriber base are elucidated. There are much more legal methods than prohibited ones 😉
Methods That Can Be Used:
There is one golden, unbreakable rule which states that ‘You have to get consent to send letters to subscribers’. This is the main rule of all postal services and email marketing platforms. Without the subscriber’s consent all emails will be sent into spam.
To collect the database, you can use any means that allows users to willfully give their consent.
- Subscription form on the site. It can be static, popup or stick to the top edge of the page. There are even forms that appear when a user wants to close a site:
- Facebook subscription page. If you are promoting an online store on Facebook, you can add your subscription form to the social network. For example:
- Subscription at checkout. The client fills in the fields and enters their email. The main thing is not to forget about the consent to the subscription:
- Subscribe while watching a video. If you promote your products through videos, you can also get subscribers through this medium. Special services such as Wistia, and LeadPlayer allow you to embed a subscription form in the video.
- Exhibitions and presentations. Invite listeners to subscribe during offline events. It could be conferences, exhibitions, trainings, presentations or forums;
- Contests. Ask customers to subscribe if they want to participate in draws:
- Advertising in the partners’ emails. Cooperate with online stores that have potentially beneficial target audience for your business. This works by writing about their products in your email and vice versa. Provided that your theme is close to that of partner clients, you will receive new targeted subscribers.
Segmentation: How To Make Subscribers Database Work For Your Benefit?
It is a frequent occurrence for online stores to accumulate impressive databases but send the same generic letters to everyone. Most likely, such emails will not bring the anticipated effects. The fact is that the audience inside the base is very different. They need different approach.
When the audience is divided into segments, the messages you want to get across, reach them more efficiently. Practice shows that segmentation raises open rates and click through rates. Metrics will grow when you write different letters (with the right offers and content) for different segments of the audience.
Here are some segmentation methods for online stores:
Based on gender
This type of segmentation is effective for a large range of goods or services targeting male and female audience. For example, Nike, Adidas and American Apparel use such segmentation.
How to collect data. The best way is to create an avenue for users to choose their gender in the subscription form. Google Analytics can also display and analyze demographic data.
Based on location
Subscribers are more likely to open letters then they see their own city in the subject line or preheader. This type of segmentation is suitable for everyone: from online stores to air ticket aggregators.
How to collect data: Add the field “city” to the subscription form. This information can also be viewed in Google Analytics.
Based on activity
Subscribers are divided into active and inactive ones:
- Active. These are the subscribers that open letters and click on links. You can send promotions, notifications about new products, discounts, useful content to them. Main objectives here are to insulate, to sell and to maintain interest.
- Inactive. These are the subscribers that haven’t read your letters in a long time. You need to reactivate them. Find out which of the subscribers can actually be transferred to active, and which of them are already “cold”. “Cold” contacts must be removed from the database.
We can improve the segmentation and divide the subscribers, depending on the stage of the sales funnel:
- For new leads — Send introductory emails about goods and services;
- For hot leads — Send short term offers;
- For customers — Send recommendations of similar products, seasonal discounts, new products;
- For customers who stopped buying — Send reactivation (an attempt to rekindle the subscriber’s interest).
How to collect data. You can use the appropriative filters in email marketing platforms. These filters make it possible and easy to select active and inactive subscribers in a couple of clicks.
Based on product category
This is a classic and very popular way of base segmentation.
Users have different interests and this must be taken into account. Pay attention to what pages they visit, which section of the catalog they enter, what goods they send to the shopping cart and what they pay for.
Example. Doggylot.com, a website that sells products for dogs, segmented its subscriber base depending on the size of pets. The company sends 3 types of letters tailored categorically for:
- Small dogs, up to 10 kg.
- Medium sized dogs, 10–20 kg.
- Large dogs, more than 20 kg.
Presented below are the results of this experiment, published by MarketingSherpa, a marketing research agency:
- Open rate increased by 102%.
- CTR increased by 410%.
- Total daily earnings increased by 13%.
How to collect data. Use special tools such as Clicktale and Сrazyegg to see the heat map of clicks. This gives us an understanding of both user behaviour on the website and their interests. We can also analyze the purchases made by subscribers and segment the base depending on the purchases.
Sending newsletters with a survey of preferences will also help to learn more about the interests of subscribers.
RFM Analysis
RFM analysis is an analysis method that allows you to segment customers by frequency and amount of purchases. This enables us to identify customers who generate more revenue.
RFM stands for:
● Recency (how long has it has been since customers’ last purchases);
● Frequency (how often do they purchase products);
● Monetary (total amount of purchases).
Upon collecting this data, you can divide all customers into groups. This helps you to get an understanding of the number or percentage of customers that purchase products often, how much they spend and how many customers haven’t bought anything in a while.
You can build separate communications with each group: send different advertisements and emails. For example, special offers can be sent to a group of regular VIP customers and offers of motivating discount and targeted advertising can be sent to customers who haven’t purchased products for a long time.
How to collect data. You can carry out RFM analysis in Excel or in a CRM system. Here’s a detailed article on Puttler blog on how to implement RFM analysis.
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