During the last month, we’ve spent a considerable amount of time analyzing our own data in an attempt to find greater insight and best practice of how our various store owners are using our tools: from what makes really great receipts to how the CM Commerce (previously Receitful) Premium tools impacts on a store’s overall performance.
In this post, I’d like to share some of the insights that we have uncovered that relate to Follow-Up Emails and also how those insights influenced the new features we’re announcing today.
What are Follow-Up Emails? What problem does it solve?
Follow-Up Emails are sent to customers based on certain event and / or specific conditions or criteria. These emails are generally regarded as part of your lifecycle / retention marketing strategy and the goal thereof is very clear: increase Customer Lifetime Value.
Customer Lifetime Value is important in this regard, because it measures the long-term value of your average customer and in that regard, is thus a very good indication of your longer-term profitability and sustainability.
To calculate this metric, we basically consider two primary customer-specific variables: the average value of an order and the frequency at which a customer makes a repeat purchase. (We have a great free eBook that explains Customer Lifetime Value in great detail.)
But here’s the problem… When we started our analysis of all of our merchant data, we saw that customers (i.e. the customers of our store owners) averaged only 1.1 purchase per lifetime. An ideal target would’ve been much closer to 2.0 purchases per customer, especially considering that you want your top 20% customers to make 4 / 5 / 6 / 10 purchases each.
This problem is further complicated by the fact that it’s really expensive to acquire new customers, which means new customers can’t be exclusively responsible for your business growth. You simply have to retain existing customers and increase their lifetime spending value.
So how do you do that? Retention marketing basically works on these dynamics:
- Identify customers that are about to become inactive and reach out to them before they do.
- Re-engage customers that have already become inactive.
- Reach out to customers of any status at the optimal time with an optimal, personalized offer that will get them to take action.
- Engage your customers regularly and consistently, which means you nurture them until they take the next step and make a repeat purchase.
Here’s the juicy bits of insight we found during our data analysis…
To draw these conclusions, we looked at a subset of all of our merchant data (from the last 3 months):
- Stores that uses our Follow-Up Emails generally have higher (overall) conversion rates compared to stores that only use our receipt technology.
- After implementing Follow-Up Emails, there is an overall increase in click rates (12.85%) and conversion rate (13.3%) for receipts.
- And the big one: Average Customer Lifetime Value increases with 17.64% once Follow-Up E-mails have been implemented.
We also managed to uncover a few best practices and tactics that our most successful stores have implemented using Follow-Up E-mails:
- If you’re using a Discount upsell in your receipts, a reminder to a customer about an unused coupon (just before it expires) is the perfect timing to leverage an otherwise lost opportunity.
- Follow-up e-mails that asks for feedback have the highest click & engagement rate at more than 15% per e-mail.
- The best conversion rates are achieved when there’s only one upsell / marketing component per follow-up, because the messaging (and impact thereof) is otherwise diluted.
Finally… Tell me about the new features…
If you skimmed the rest of the article just to get to the details of the new features, then you’ve missed some really great insights. 🙂 That said, we won’t keep you in suspense any longer.
Our goal with Follow-Up Emails has always been to turn it into a fully automated, intelligent lifecycle email marketing platform. We’re very excited to announce that you can now send follow-up e-mails on a wide variety of new “Send Events” to engage your customers in even better ways.
Here’s an overview of those new “Send Events” (full details and description of each here):
- Delay After Specific Purchase
- Delay After Specific Purchase Without Feedback
- Reminder of Unused Coupon
- Delay From Last Purchase
- Delay From First Purchase
- Delay From Becoming Idle
- On Signup
In addition to using our Conditional Logic (to differentiate between First-Time Buyers & Repeat Customers), we are imagining a new breed of follow-ups that you can send:
- Use the “Delay From First Purchase” email to send your customers a celebratory anniversary e-mail i.e. “You made your first purchase exactly 3 years ago! Thanks for all your support!”.
- The “Delay From Becoming Idle” email is well-suited to re-engaging customers that has not interacted with you for a while. Perhaps they just need to discover some other / new products that you’ve released since their last purchase?
- Or use the “On Signup” email to send all first-time buyers a personal welcome message to tell them a little bit more about you, the team or your values as a company.
Follow-Up Emails and retention marketing in general isn’t a quick fix solution, but the data doesn’t lie: even in the medium-term it will increase your Average Customer Lifetime Value.
We hope you enjoy these new features! 🙂