October 13, 2010

A Marketing Tactic: Your Vote Counts

Here's an experience from this morning:
  1. I visit a popular e-commerce brand that I previously purchased from.
  2. I view products on a few pages, I do not put any items in my shopping cart.
  3. I leave the website.
  4. Four hours later, I receive an e-mail from this popular e-commerce brand. The trigger-based e-mail message says that I abandoned the website earlier in the day, so they would like to offer me 15% off my next order.
You make the call.
  1. Is this a brilliant, trigger-based marketing strategy to convert a visitor to a buyer?
  2. Is this a ridiculous method for gouging existing customers, charging them full-price if they "convert" on a first visit, but charging others much less because they exhibited "less loyal" behavior on a first visit? Is it wrong to steal $15 from an existing customer because the existing customer exhibits "better" behavior?
Use the comments section to "join the conversation".

7 comments:

  1. 2. This type of thing has happened over and over on the web, yet people don't see the pattern, and just keep repeating it in new ways and calling it brilliant until they figure out it's not.

    But Kevin, as I have said here before, I don't think situations like this can be blamed on analysts, though I which more of them would push back on this kind of thing. If your boss is measured on Sales and not Profit, it's difficult to convince them a concept like subsidy cost really matters.

    I guarantee you customers are now abandoning carts just to get these discounts - won't you the next time? Wonder if anybody will measure that - hey, as our cart recapture program ramps up, it drives higher cart abandonment. No wonder the recapture emails get a 90% response rate. Folks, think about why that is.

    The real question for the analysts is - will you analyze and say something about this, even if "the team" thinks this program is the best thing they have ever seen?

    That is your job. Analyze, not Justify.

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  2. 4 hours? Really?

    I've seen good success rates sending e-mails *2 weeks* later. I've also frequently seen customers add items to their cart and purchase within the next week.

    4 hours doesn't fall into either category 1 or category 2-it just seems like a bad business practice.

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  3. Anonymous5:02 PM

    My only question is that if you waited another hour would you have gotten another %5 off? Or if you waited a week would they send stuff to you free.

    If your product is so price sensitive and you can afford such duscounts you are pricing it wrong in the first place.

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  4. There's something to be said for a bit of subtlety; this makes the company look cheap and desperate, not brilliant. There's something to be said for waiting a bit longer and framing the follow-up to make the customer feel special, rather than just a transaction target.

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  5. Anonymous5:23 AM

    At my last job, I had a great return on an abandoned cart email that contained no promo, but just a reminder that the cart was still there for the customer to return to as well as information on how to call in to a place their order over the phone instead.

    I wonder how many marketers even try the no promo angle before jumping into discounts. Engaging ecommerce marketing emails with respectable open and click rates do exist, even when you consistently do NOT send a promotional offer.

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  6. Thanks for your comments, everybody!

    Discounts and Promotions are destroying us, 5% at a time.

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  7. Great comments, especially "promo angle", or (my read) segmentation. My experience, variables that impact profit on this kind of promo, in order of importance:

    1. Timing - days better than hours, as was mentioned above. The closer you get to cart creation, the less likely the purchase is incremental, evidenced by higher response curve as the recapture email drop approaches cart creation. Segment by days since cart creation, find tipping point / max incremental sales; what percent / profit would have happened without promo?

    2. Pricing - are the goods on deal or subject to other promos such as free shipping.

    3. Category - are these impulse or considered purchases, is there a lot of price competition in the category / uniqueness of item, time-to-delivery issues.

    Controlled testing (random sample of segment population receives no abandoned cart promo) is the only way to prove this kind of promotion actually drives profit.

    But like I said above, one has to have an incentive to care about Profit over Response / Sales to set up proper tests...

    ReplyDelete