May 13, 2013

Decoupling: Email Marketing

Leave your desk right now, and have your analytics guru run a query for you:
  • From May 14, 2012 to May 13, 2013, calculate the average price point purchased by marketing channel.
  • Compare email marketing to every channel.
What do you see?

There's a high probability that the average price point purchased via email marketing is lower, significantly lower, than all other channels.

This happens when you hyper-optimize a marketing channel.

Email marketers hyper-optimized their channel.  20% off.  Free shipping.  Gotta get open rates up, who cares about the profit and loss statement, right?

Over time, the email customer file was built, and it became fundamentally different than the rest of the business.  It's not uncommon to observe an email customer file that purchases items 20% cheaper than those purchased by the rest of the business.  It's not uncommon to observe an email customer file that buys 75% of items via discounts/promotions, whereas 20% of the remainder of the customer file purchases via discounts/promotions.

Once this happens, the email customer file has been decoupled from the rest of the business.  Integration with the rest of the business becomes sub-optimal, and for good reason ... you're dealing with a fundamentally different customer.  It's a lot like JCP abandoning discounts/promos and being thumped over the head with a bag of oranges, to the tune of a -25% to -30% comp store sales performance.

When you decouple the email customer file from the rest of the business, you actually have freedom to make changes, to reverse the process of multichannel/omnichannel integration.  Use email marketing to play to the strengths of customers who buy from email marketing ... those customers receive versions tailored to their interests.