strategy guide how to beat the benchmarks · pdf filestrategy guide how to beat the benchmarks...

STRATEGY GUIDE

How To Beat The Benchmarks

2016 EMAIL MARKETING BENCHMARKS FOR RETAILERS

TABLE OF CONTENTSINTRODUCTION ....................................................................................................................................................... 3

CAMPAIGN BENCHMARKS ................................................................................................................................. 5

Broadcast ................................................................................................................................................................ 7

Recurring Automated Campaigns ............................................................................................................. 8

Welcome Messages............................................................................................................................................. 9

Browse Abandonment ..................................................................................................................................... 10

Cart Abandonment ............................................................................................................................................ 11

Back in Stock ........................................................................................................................................................ 12

Post Purchase Loyalty .....................................................................................................................................13

Replenishment .....................................................................................................................................................14

LifeCycle Winback ............................................................................................................................................15

CAMPAIGN TIMING BENCHMARKS ..............................................................................................................16

Email Performance by Day ........................................................................................................................... 17

SETTING UP FOR SUCCESS ..............................................................................................................................18

INTRODUCTION Listrak closely monitors email marketing analytics of our retailing clients in order to gauge the efficacy of different campaigns and trends. By understanding the benchmarks, including open rates, click rates, conversion rates and revenue per email sent, we can help retailers create messages that will resonate most with their customers while maximizing results.

For the past decade, email has been the reigning revenue generator, bringing in an average of $40 for every dollar spent according to the Direct Marketing Association (DMA). The National Retail Federation (NRF) reported that retail marketers spend an average of 14% of their digital marketing budgets in the email channel, yet email drives a quarter of the total revenue. Of the retailers surveyed by NRF, 52% said email is their most effective channel.

Introduction | 3

DIGITAL MARKETING SPEND 2015

51% - SEO / SEM

14% - Email

Source: National Retail Federation1

7% - Other12% - Social

5% - Mobile

11% - Affiliate

REVENUE PER $1 SPENT$40.00

Email SEO Display KeywordAds

Mobile Banner Ads

$22.24$19.72

$17.00

$10.51

$2.00

Source: Direct Marketing Association2

Introduction | 4

Hundreds of retailers use Listrak’s digital marketing automation platform to reach their clients in the right channel with a relevant message at the time they are most engaged and likely to buy. We reviewed campaign metrics of nearly 950 clients and calculated the average open rate, click to open rate, conversion rate and revenue per email sent. We also looked at volume, open rate, click to open rate and conversion rate by day.

It is important to note that these numbers are our global averages, meaning many clients are seeing results even higher than what is reported. At Listrak, our goal is to help you beat the benchmarks. Throughout this guide you’ll find suggestions for testing, suggestions for new tactics to try and strategies that can help you maximize results.

MEDIAN ROI BY MARKETING CHANNEL

21-23%Email


15-17%Social Media

12-14%Mobile 9-10%

Paid Search

6%Display

At Listrak, our goal is to help you beat the benchmarks.

Top Tips From Our Strategists Our Strategy Services Team wants to help you beat the benchmarks! Look for their top tips throughout this guide.

CAMPAIGN BENCHMARKS

It shouldn’t come as a surprise that the more strategic your emails are, the more money they’ll make. The DMA found that only 14% of email revenue comes from broadcast campaigns – untargeted and unsegmented emails that are sent to the entire list. Activity-based triggers and lifecycle-based triggers bring in 18% and 12% of email revenue, respectively. Emails that are personalized to specific segments that cover the entire list, what we would call Recurring Automated Campaigns, account for 22% of email revenue while targeted emails only sent to specific segments are typically the highest revenue generating messages, bringing in 36% of email revenue.

The triggered campaigns sent by our clients generate slightly more revenue, averaging 33.5% of email revenue while only accounting for 3.8% of email volume. On average, email accounts for 25% of total revenue generated.

Campaign Benchmarks | 5

REVENUE BY EMAIL CATEGORY – PERCENT OF TOTAL EMAIL REVENUE*

30% - Triggered messages

14% - Unsegmented messages to the whole list

58% - Targeted and segmented messages


*Note – the DMA’s numbers add up to 102%

Campaign Benchmarks | 6

MESSAGE TYPE OPEN RATE CLICK TO OPEN RATE

CONVERSION RATE REVENUE PER EMAIL SENT

BROADCAST 13.0% 19.4% 4.2% $ .06

RECURRING AUTOMATED CAMPAIGNS 10.0% 16.1% 4.7% $ .02

MARKETING MESSAGES



WELCOME 29.7% 35.4% 11.0% $1.07

BROWSE ABANDONMENT 18.8% 45.5% 6.0% $ .47

CART ABANDONMENT 22.5% 42.7% 20.0% $3.43

BACK IN STOCK 41.8% 114.1% 27.8% $5.68

ACTIVITY-BASED TRIGGERED MESSAGES



POST PURCHASE LOYALTY 24.0% 36.2% 11.8% $ .84

REPLENISHMENT 17.2% 37.1% 37.4% $1.50

LIFECYCLE WINBACK 21.8% 22.8% 9.2% $ .20

LOYALTY-BASED TRIGGERED MESSAGES

*Note – The click to open rate is calculated by taking total clicks divided by total opens.

Broadcast Messages | 7

BROADCAST MESSAGESEven though these messages aren’t targeted or personalized to recipients, the sheer volume of broadcast messages that retailers send provide a great deal of revenue. They are your bread and butter and can account for the majority of your email revenue.

Open Rate

13%

Click to Open Rate

19.4%

Conversion Rate

4.2%

Revenue Per Email Sent

$.06

BEAT THE BENCHMARKS Test different email attributes, such as subject line, deployment time or hero image.

Make your broadcast messages shoppable by including a lot of merchandise, such as new arrivals, top sellers, etc., like a product catalog. Shoppers will scroll.

Personalize messages with the recipient’s name in the subject line or body copy.

Suppress recipients from the batch and blast messages while they are in triggered campaign conversations to ensure they receive the more targeted messages without being overwhelmed with too many emails.

RECURRING AUTOMATED CAMPAIGNSRecurring Automated Campaigns are similar to broadcast messages as they typically go out to your entire list at the same time. However, these emails are highly relevant as they are automatically populated with personal recommendations based on each recipient’s browse or past purchase behavior or top sellers in the last browsed category or subcategory.

While the benchmarks are similar to what you see with broadcast messages, these emails are much more efficient because they are automatically generated, saving you time and resources. Simply set up a template and deployment schedule and the emails are sent without any additional design time or coding needed.

Recurring Automated Campaigns | 8

BEAT THE BENCHMARKS Use product recommendations to promote new merchandise, top trending products, etc. This allows for a personally-relevant email which is curated to each shopper’s previous purchase or browse history.

Include a lot of products but few words – these messages should be used to simply get merchandise in front of shoppers.

Withhold prices on products, unless it’s for a really great sale, so shoppers don’t make purchasing decisions in the inbox. The goal is to get shoppers back to your site so they can see additional product info, videos, reviews and user generated content.

Leverage these in addition to broadcast campaigns – creative and time investment is small so the margins from these emails is high.

Click to Open Rate

16.1% Open Rate

10%Conversion

Rate

4.7%Revenue

Per Email Sent

$.02

Welcome Messages | 9

WELCOME MESSAGESWelcome messages set the stage for your entire email relationship with each shopper. They typically are triggered upon subscription, arriving when shoppers are most engaged and interested in buying. Therefore, they have some of the highest open, clicks and conversion metrics. However, for triggered messages they have higher than average volume as they are sent to every single subscriber. This makes the revenue per email sent a bit lower than other triggered campaigns.

Open Rate

29.7%

Click to Open Rate

35.4%

Conversion Rate

11%


$1.07

BEAT THE BENCHMARKS Send immediately upon subscription while shoppers are still browsing your site.

If you include an offer use a unique, single use coupon code if possible. And be sure the offer matches the offer presented in the modal lightbox on your site.

Send a series of messages, not just a single welcome message. Use the high engagement levels to request additional profile information, share top selling products, introduce customers to your brand, etc.

Personalize messages as much as possible by including browsed merchandise, local store information and any additional information you have on your subscribers.

Browse Abandonment | 10

BROWSE ABANDONMENTPersonalized email remarketing is one of the hottest topics for 2016 and a triggered browse abandonment message gives you the ability to reach site visitors with information relevant to their needs in a timely fashion. Customers are at the point where they find these messages useful in the shopping journey as they hold onto the messages as a reminder of the products they viewed to help them make purchase decisions.

BEAT THE BENCHMARKS Highlight the item or items the shopper viewed and include recommended products in the same category or sub-category.

Recommend products that are around the same price point as the products viewed – you don’t want to undersell. Don’t show sale merchandise if the shopper viewed full price merchandise.

Send a series of messages – at least three – to nurture customers back to your site.

A/B split test the timing of the series. Consider your products and the typical time it takes customers to make the decision purchase. The cadence of a series for a high ticket item should be much longer than an impulse buy or sale.

Open Rate

18.8%

Click to Open Rate

45.5%

Conversion Rate

6.0%


$.47

Cart Abandonment | 11

CART ABANDONMENTShopping cart abandonment messages are typically a retailer’s best performing email campaign as they bring in the highest amount of total email revenue. Cart abandonment campaigns are a tried and true money maker, but you have to be strategic in order to beat the benchmarks.

Open Rate

22.5%

Click to Open Rate

42.7%

Conversion Rate

20%


$3.43

BEAT THE BENCHMARKS Leverage social proof by including ratings and reviews of the abandoned merchandise to help shoppers make the purchase decision.

Update your creative – these messages shouldn’t look like an invoice or receipt with the quantity and price of abandoned products. Instead, tell shoppers if inventory levels are running low.

Try adding more messages to your series – if the third message still has a double digit conversion rate, add one or two more.

Test to see if product recommendations increase conversions, items ordered and AOV or if they distract customers away from completing the purchase.

Back in Stock | 12

BACK IN STOCKBack in stock messages play an important role in your customer service and communications as they allow you to keep items that are temporarily unavailable on your site while allowing customers to request a notification when the merchandise becomes available for purchase.

These messages generate the highest amount of revenue per email as the volume is lower than average but the conversions are some of the highest you’ll see. And, as you can see from the benchmarks, customers refer to these messages more than once, clicking through more than once.

BEAT THE BENCHMARKS When customers request the back in stock notification, include an opt-in checkbox so they can also receive your marketing messages.

When an item comes back in stock, trigger an email and an SMS message to alert the shopper that the item is available.

If an item won’t be restocked, send a follow up email letting customers know and be sure to recommend similar products.

Follow the same best practices you use for transactional emails – maximize real estate by including seasonal messaging, product recommendations, local store info, etc.

Be sure to include a disclaimer around quantities on hand if supplies are limited.

Click to Open Rate

114.1%*Open Rate

41.8%Conversion

Rate

27.8%Revenue

Per Email Sent

$5.68

*Note – The click to open rate is calculated by taking total clicks divided by total opens.

Post Purchase Loyalty | 13

POST PURCHASE LOYALTYAfter a shopper makes a purchase, retailers must continue to send relevant messages in order to get a second sale. Post purchase loyalty emails can take many forms – a simple thank you message, a review request, personalized messages that recommend products related to the purchase, loyalty points account information, etc. These messages have high engagement and conversion rates.

Open Rate

24%

Click to Open Rate

36.2%

Conversion Rate

11.8%


$.84

BEAT THE BENCHMARKS Send this as close as you can to the order date as the majority of second sales are made within 24 hours of the first.

Be sure to include recommended products that are based on the purchase.

Send a series of post purchase messages – the first email can talk about your company and include a strip of recommended products, the second can help your valued customers discover new products by including four rows of product recommendations that they would love, the third could offer product care or customer service information, etc.

Don’t suppress customers from your broadcast or recurring automated campaigns when they are in this conversation but be sure to monitor results.

Replenishment | 14

REPLENISHMENTIf you sell consumable products a replenishment campaign is a must as it makes it easy for customers to reorder their favorite merchandise before they run out.

Replenishment campaigns are automatically deployed at a set amount of days after a purchase is made. You can set up the business rules based on the average reorder date or your own preference. These messages have the highest conversion rates as they are highly relevant and personal to shoppers’ specific needs.

BEAT THE BENCHMARKS These messages are a great value add if you have replenishable products and a great way to promote your auto-renewal or subscription service.

You should absolutely send a series of messages to give shoppers several easy opportunities to buy from you.

Give shoppers an option to receive another reminder in five, 10 or more days – they might not be ready to reorder when the first message is received.

A/B split test subject lines and adding product recommendations to these campaigns.

Click to Open Rate

37.1%Open Rate

17.2%Conversion

Rate

37.4%Revenue

Per Email Sent

$1.50

LifeCycle Winback | 15

LIFECYCLE WINBACKEvery retailer’s list contains a segment of inactive customers who haven’t purchased in six months or more. Thoughtful winback messages will re-engage this segment and drive them back to your site.

Open Rate

21.8%

Click to Open Rate

22.8%

Conversion Rate

9.2%


$.20

BEAT THE BENCHMARKS Winback messages are all about subject lines – it is really hard to re-engage a former customer so you must be creative.

Leverage additional channels – such as display and social networks – to try to re-engage customers that way.

Winback messages must be a series with a minimum of three to five messages. These former customers need more than one message in order to capture their attention.

Try including personal product recommendations, such as new merchandise or top sellers, in the same category that was previously purchased.

If you haven’t had a customer repurchase within a year, lessen your interaction to some degree by suppressing them from some of your broadcast messages.

Campaign Timing Benchmarks | 16

CAMPAIGN TIMING

BENCHMARKS To truly beat the benchmarks you must get the timing of your deployment schedule right. To do that, it is important to understand the volume of messages by day. As you can see, Monday and Friday have the highest volumes as each day accounts for 16% of total volume while Saturday and Sunday have the lowest volumes at 12% and 13%, respectively.

EMAIL VOLUME BY DAY OF WEEK

Mon Tues Wed Thurs Fri Sat Sun

20%

15%

10%

5%

0

16% 14% 14% 15% 16% 12% 13%

Top Tips From Our Strategists While the volume drops on the weekends, the metrics show that engagement levels – opens, clicks and conversions, remain steady. This gives you a huge opportunity to really stand out in the inbox. If you haven’t tested sending emails on Saturday or Sunday yet, we highly recommend giving it a try.

Email Performance by Day | 17

EMAIL PERFORMANCE BY DAYEMAIL OPEN RATE BY DAY

EMAIL CLICK TO OPEN RATE BY DAY


15%

12%

9%

6%

3%

0

13.3% 13.2% 13.1% 12.5% 11.9% 12.6% 12.2%


20%

15%

10%

5%

0

16.3% 16.5% 16.8% 17.1% 17.4% 17.4% 17.4%

EMAIL CONVERSION RATE BY DAY


5%

4%

3%

2%

1%

0

4.6% 4.2% 4.3% 4.0% 4.4% 4.4% 4.2%

Setting Up for Success | 18

SETTING UP FOR SUCCESS

Understanding the average retail email metrics is important, but it is more important to monitor your own analytics and measure your success against your own benchmarks. It is the only way you’ll see real improvements in the performance of your campaigns.

Listrak’s Strategy Services team is available to help you define your benchmarks and build out a strategy to ensure every message you send beats those benchmarks. The team will also help you put cross-channel strategies in place so you reach customers in the right channel with a personalized and relevant message.

To learn more visit www.listrak.com.

METHODOLOGY

We collected open rates, click to open rates, conversion rates and average revenue per email statistics for 950 of our retail clients and reported on the average metrics across the board. We also looked at the volume of messages these retailers send and reported on the average volume by day as well as the open rate, click to open rate and conversion rate by day.

SOURCES

1 NRF “The State of Retailing Online 2015: Marketing and Merchandising”

2 Direct Marketing Association

3 Direct Marketing Association, April 2015

4 Direct Marketing Association “National Client Email Report 2015”

Listrak’s retail-specific solutions help you create personalized, seamless experiences

across all customer touchpoints from a single, integrated digital marketing platform.

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