8 Tips to increase the number of loyal customers by 57% in the email channel
Would you know how to get your customers’ attention and make them a hard-to-refuse offer? Let’s see how to increase your business KPIs and loyalty and retention of your customers by making inactive users return to your website. And what better way to do it than showing a case study as an example of an effective communication strategy for email marketing. And then give some tips to achieve it and get the most out of this powerful channel.
KotoFoto is an online hypermarket with more than 550 thousand monthly visitors and twelve years of history focused on offering quality products and the best customer service. Proof of this is the extensive catalog with more than 100,000 products and the average response time of only 7 seconds from an operator.
The main task set was focused on achieving the following objectives to:
- personalize the offer for every single customer
- ensure an effective email communication
- maintain customer loyalty over time.
The online retailer relied on Retail Rocket’s Customer Retention Platform to develop and implement a multi-channel communication strategy. They used email to respond rapidly to customer requests and drive growth in KPIs.
Online store’s objectives
For Kotofoto, every customer’s opinion counts when determining assortment and special offers. A comprehensive and personalized approach is at the core of the online store’s strategy. Therefore, it successfully uses cross-channel communication to show a relevant offer at the right time and the best channel for every single subscriber.
The online store supports all the marketing actions on the site by social media, push notifications, and the email channel. In the latter, audience segmentation is the key to personalizing and automating deliveries with the most relevant content and product selection for each single recipient.
The online store set the following objectives in the briefing in order to:
- ensure regular communication with customers through the email channel to: inform about promotions, congratulations, send offers relevant to each subscriber, etc.
- build a chain of mass mailings;
- retain the customer and increase audience loyalty;
- increase KPIs: revenue, Conversion rate, and average order value in the email channel.
“Caring for customers, being interested in their opinions and shopping experiences is part of our strategy. This is how our store is known and loved throughout the country. We focus on trusting relationships with customers, so we want to maintain and develop our email channel to achieve it. Due to this, we work on expanding the subscribers’ database, increasing the number of active buyers and their loyalty “.
Alexei Sazonov, Marketing and e-commerce director. Kotofoto
Retail Rocket Solution
Besides having reliable and hassle-free proven scenarios, Retail Rocket’s email communications allow a completely individual approach to designing a personal road map for each online store’s email marketing.
Thanks to the “Data Warehouse” and “Campaign Management System” modules included in an all-in-one platform, the audience was segmented by interests to automatically send every customer the most relevant offer.
The “Data Warehouse” module makes it possible to combine and store data on every user behavior across all channels and quickly create segments for each marketing action.
. The communications strategy combined:
- Bulk email campaigns aimed at increasing conversion and revenue;
- Automated campaigns based on the interests of each customer segment;
- Trigger-based email chains based on customer behavior;
- Surveys aimed at gathering information for customer segmentation;
- A reactivation scenario for retaining subscribers and bringing them back to purchase in the online store
“To increase the KPIs in the email channel, the particularities of an online store and the behavior of its customers must be taken into account. KotoFoto’s reputation as the most customer-friendly online hypermarket must be reaffirmed by smart email communication. Thanks to the artificial intelligence that manages all the modules of our platform, we have generated different types of mailings, segmenting customers by interests, region of residence, and other parameters.”
Alexander Khe, Retail Rocket manager
And now, let’s take a look at how we managed to meet the objectives set by the online store and our tips to improve metrics in the email channel.
1. Give a positive first impression
Working with new subscribers is a fundamental part of email marketing. The way you do it and the first impression given will form the basis of how the online store is perceived by customers and, consequently, their loyalty and communication with each of them.
Generally, the first interaction with customers is done with a chain of welcome emails, sent one by one after a specific time between them. These emails establish a relationship of trust with subscribers while the online store’s benefits and special offers are presented.
The first newsletter usually contains a thank you text for subscribing, information about the online store and the product assortment, and a promotional code for using with the first order.
A second email will inform the buyer about the advantages of buying in the online store, delivery conditions, the possibility of buying on credit, and other information of interest. And, those who have already made their first purchase will also get a special bonus.
Kotofoto sends 100 “Catcoins” per review made of purchased products. The email chain is completed with a newsletter about the loyalty program, which allows you to pay up to 20% of the total purchase amount with bonus points. In addition, the customer is invited to take a look at the promotions section and read the reviews and articles on the blog. And they will receive the latest news by email.
2. Motivate your subscribers to make the first purchase.
Working with databases should be based primarily on subscribers’ needs, real-time behavior, and activity history in the online store. The Campaign Management System module of the Retail Rocket platform takes all these parameters into account and automatically delivers a personalized offer for every customer through the best channel and at the right time.
To transfer new buyers to the loyal customers segment, the hypermarket “Kotofoto” contacts them again after a few weeks. Then, they send them the welcome email chain. That is enough time for subscribers to familiarize themselves with the website and its product assortment and receive a newsletter from the store. It is sufficient to motivate them with a secret promotional code to make their first purchase. In addition, as a reminder, they will be sent the purchase conditions and two personalized product recommendations blocks. The first one, with new products in the assortment, while the second one will contain bestsellers based on the interests of many other customers.
3. Pay attention to detail and delight your customers to build loyalty.
Customer loyalty is a long-term measurable value, calculating LTV (customer lifetime value) and frequency of recurring purchases. To maintain brand loyalty it is not sufficient to show a relevant offer to every single subscriber. It is also crucial to consider behavioral factors in sending triggered emails, retaining each customer with a personalized approach.
KotoFoto takes care of its customers on important dates, and what better day than a birthday to send a greeting with a gift: a discount for the next purchase. We recommend that the validity period should not exceed two weeks. In this way, the subscriber will still have the celebration feeling, and the online store will generate the need for urgency to not to miss the benefit. This will increase the likelihood that the purchase will be finished.
4. Use surveys to segment your customers by interests
Only until a few years ago, many email services had a problem with the interactive content of newsletters that did not allow you to insert surveys. Today, however, it is possible to include many options and fillable fields: checkboxes, radio buttons, drop-down lists, or text fields to find answers to questions of interest.
For the online store KotoFoto, three surveys were developed for different segments:
- For new subscribers: an introductory survey to find out the basic parameters for segmentation and personalization of mailing: name, gender, date of birth, city;
- For active customers: an interest-based survey to learn about topics and categories relevant to customers and preferences in the frequency of mailings;
- “Sleeping” customer segment: a survey on the reasons that drove them to have lost interest in the online store and newsletters.
Additional information collected through surveys is used for:
- Adjusting the strategy: e.g., the frequency of sending newsletters;
- Segmenting mailing campaigns: grouping subscribers based on interests or sending related products based on a previous order to those customers who have already made a recent purchase ;
- Personalization of elements included in the newsletter, such as inserting the name in the text.
5. Help the users to save and use bonus points.
It is just as important to reward customers with special benefits as informing them how to enjoy them.
KotoFoto subscribers enjoy advantages over other visitors when purchasing a product. Firstly, some of them, by default, have access to lower prices. Secondly, all members of the loyal program can take advantage of special bonuses to be used when buying in the store.
Integrating these elements into the email marketing strategy is essential to encourage subscribers to enjoy their benefits. For this purpose, Retail Rocket’s email marketing team has improved the newsletter template to add automated scripts for rewards program members:
- The balance is directly shown in the newsletter: you no longer need to enter your personal account to find out how many points you have. Those who have not yet joined the loyalty program are invited to participate.
- Now, shopping is not only about spending, but also saving. The subscriber clearly sees this in the newsletter, by displaying in the product card the sum of points that the customer will receive after buying it.
- All users like to save points, but even more, spending them on bargain purchases. Once subscribers have enough points on their accounts, they will receive an automated email reminding them that the points might expire and now is the best time to spend them. And those who are still on the road to wealth and do not yet have a balance to spend will receive an email with personalized product recommendations and tips on how to save points as quickly as possible.
6. Bring “sleeping” customers back to the site
In a highly competitive market, each single customer’s lifecycle can take them to a critical zone where their loyalty to the store decreases, and there is a risk that they will eventually stop buying at any time. Therefore, and considering that it costs about seven times less to retain a customer than to attract one, designing a strategy focused on customer retention is crucial for every business. Only thus will you get the most out of your subscriber base.
To regain the interest of inactive subscribers, Retail Rocket has developed a reactivation scenario for those who have not opened a newsletter for more than three months. It has two main goals: to return subscribers in the “customers at risk” segment to interact with the online store and, secondly, to clean the database up of those users who are no longer interested in mailing campaigns.
Commonly, more than one email is required to recover a customer. In this case, KotoFoto creates an email chain or automatically activates the main newsletter, which will be sent again to those customers who did not open it the last time.
KotoFoto’s subscribers receive a different email with a survey on what causes them to stop reading the newsletter. That allows the store to know what aspects they need to improve to satisfy the audience.
The main objective of the reactivation scenario is to get the newsletter opened. Once the subscriber is back in the active segment, we work with them to rekindle their interest in email marketing campaigns. To further motivate the customer to visit the website immediately after reading the newsletter, the campaign contains two promotional codes that are activated depending on the amount of the purchase, as well as a personalized product selection.
In the six months since the launch of the reactivation campaign, more than 8.5% of subscribers in the “sleeping” segment returned to interact with the store.
7. Use the A/B testing mechanics to improve the AI effectiveness.
A good email marketing strategy requires constant improvements in the template, the product presentation format, and the newsletter’s content. To monitor changes in metrics and minimize risks, the Retail Rocket team uses the mechanics of A/B testing. Let’s look at two of the hypotheses successfully implemented in KotoFoto’s mailings.
Hypothesis 1: Show “Best in the Category” block.
When visitors search through an extensive catalog of products, they are guided by ratings and reviews to choose the best selection and most popular, and eventually buy it for themselves. KotoFoto facilitates this task by displaying in the newsletter products that meet the needs of each user based on their real-time behavior:
- Bestsellers: the most popular products in a store or a particular category;
- Best novelties: new products in those categories the customer showed the most interest in.
- Discounted bestsellers: the most popular products in the store with a discount.
The recommendation block in the newsletter displays one product from each of the above three categories.
For testing the effectiveness of the block, the subscribers were randomly divided into two segments. Segment A received the current version of the newsletter without using AI, while Segment B received a block with recommendations.
According to the test results, adding a personalized recommendation block increased conversion by 112.49%. The statistical reliability of the results was 97%.
Hypothesis 2: Show an additional block with “Personal Recommendations.”
The intelligent algorithms of the Retail Rocket platform successfully track and analyze user behavior on the site and can determine and predict interests in particular categories and products.
To test its effectiveness, the Retail Rocket team divided the audience into two segments.
Segment A received a newsletter with no recommendations. Segment B was shown dynamic content personalized with products from categories and brands of interest to each shopper. Besides the interests of each user, the technology also took into account the parameter of stock availability based on the region, which guarantees the delivery of the products shown for a given location.
The results obtained showed an increase in all KPIs by using the Artificial Intelligence for the B segment:
- Click-through rate (CTR): 6.15% higher;
- Conversion rate: 100.59% higher;
- Revenue per email (RPE): 239.36% higher;
- Revenue increased by 239.52%.
The statistical reliability of all indicators is above 95%.
8. Use content-selling in newsletters
Content-selling consists in providing the customers with relevant information to support and promote the sales. Using this technique in the email channel is very helpful to motivate the purchase by showing both product or promotions and last news from the company. This will increase your store reputation, customer retention, loyalty, and, eventually, your KPIs.
Avoid direct advertising products and better integrate them discreetly in the text, such as buying recommendations and review ratings. We recommend you to offer, only in some particular cases, a product selection as an addition to the main subject line of the email.
Content-selling in the email channel may include newsletters with information such as product reviews, guides, recommendations, new product overviews, etc.
After launching a content-selling campaign with Retail Rocket’s technology, KotoFoto achieved the following objectives:
- increasing the Open Rate of emails and the database activity by 20%.
- focusing subscribers’ attention on relevant products (taking into account customer interests and marginality).
- diversifying content and keeping subscribers interested in newsletters during the reduced purchasing power period (like during a quarantine).
The email marketing strategy developed by the Retail Rocket team achieved the following results for the KotoFoto online store database:
- 20% growth of the subscribers’ database.
- 57% increase of loyal customers.
“The email channel for us is a unique opportunity to convey helpful information to customers, inform them about new products, discounts, and relevant news. Thanks to the work of the Retail Rocket team, which fine-tunes the mailings, we don’t need to spend our resources on this laborious process to increase KPIs: conversions and revenue. But what we would like to highlight is that we are seeing an increase in customer loyalty – they trust our store and return for shopping again”
Alexey Sazonov, Head of ecommerce and marketing – KotoFoto.
“We have built a complex network of communications with KotoFoto customers, taking into account their interests and behavior on the site. In addition, we developed a reactivation campaign to “reactivate” those customers who have not been in the store for a long time. With the intelligent mathematical algorithm of our platform, we achieved a significant increase in activity and customer loyalty, as well as the growth of KPIs.
Alexander Khe, Retail Rocket Manager.