October 28, 2013

Email Marketing Generates A Different Customer

Here's something interesting, from a recent project.

Take a look at the average price point of items sold, by channel, for the past twelve months:
  • Phone / Mail = $34.52.
  • Online = $35.02.
  • Email = $31.74.
  • Paid Search = $36.78.
  • Organic Search = $35.60.
  • Affiliates = $35.55.
  • 3rd Parties = $38.56.
Look at the email row.

This one comes up, often. The average price point of an item purchased via email marketing is fundamentally lower than other channels.

Oh boy.

Then look at this one - this is the percentage of transactions that include a discount/promotion:
  • Phone / Mail = 21%.
  • Online = 34%.
  • Email = 62%.
  • Paid Search = 40%.
  • Organic Search = 41%.
  • Affiliates = 48%.
  • 3rd Parties = 24%.
Oh boy.

What story does the email channel tell you?
  1. Email buyers (not email subscribers, but email buyers) purchase inexpensive items.
  2. Email buyers are most likely to purchase via a discount/promo/coupon code.
Again, this comes up in most of my projects - email marketers have spent 15 years maximizing opens/clicks. The end result is that email buyers demand "a deal".

If you observe this happening in your business, then it is time to sit down and have a heart-to-heart discussion with your email marketing team, especially if you promote an "omnichannel" strategy of sameness across all channels. Your email team is pulling customers away from the very sameness you're trying to promote.

It's common to observe that the email marketing team yields buyers who prefer a different merchandise assortment than the rest of the business. This creates tension - do you maximize email marketing, or do you demand that email follow suit and promote the overall brand?

Thoughts?

Merchandise Forensics:

3 comments:

  1. Hi Kevin,

    Interesting data & analysis, thanks for sharing.

    This strikes me as a consequence of a broad swath of email marketers, in grossly different businesses, taking what works for one/some and applying it to their own marketing programs without thinking through the differences between their own business and the people/pundits they're reading.

    There are a lot of businesses where email marketing represents purely incremental profit. The sort of shifting you're referring to, to the extent that it happens at all, is minimal.

    What those businesses tend to have in common, though, is either a very low (in the extreme, nearly zero) marginal cost of goods or a business where *when* the purchase occurs matters nearly as much as the purchase amount. An example of the former would be a business selling digital products (cost of delivery approaches zero), while an example of the latter would be a restaurant trying to fill tables on a Tuesday.

    For those businesses, discounts often make sense (though fatigue and discount-seeking certainly set in if you overdo this), and tracking micro-conversions like clicks is often beneficial (though it shouldn't be the only thing tracked).

    Where retailers and other businesses get into trouble, in my opinion, is mimicking what works in email for the sorts of businesses I describe.

    -Justin

    P.S. Would be interesting to compare other data on email customers vs. other customers... # of pieces per order, # lifetime orders, frequency of orders, lifetime profit.

    ReplyDelete
  2. "The sort of shift you're referring to, to the extent it happens at all, is minimal".

    Oh boy!

    ReplyDelete
  3. I love your site! You will be in our prayers and thoughts! Nice and informative post on this topic thanks for sharing with us.Thank you

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