Six steps to boosting online sales conversion

Yet while the best thing about email is low cost, it's also the worst.

True, the ROI case for email is hard to dispute. The ‘Power of Direct' economic impact study produced by the US Direct Marketing Association estimates that $45 is generated for every dollar spent on email.

But even supporters of the medium would concede that email marketers face big challenges, not least the email fatigue that has been pushing down open rates. The flip side of email's high ROI is increasing inbox clutter leading to consumers becoming ever more choosy about which messages they interact with.

Marketers convinced by email are missing the crucial point that you need to target messages to ensure a good response and overcome fatigue. They can do so by making their email marketing more relevant using the best principles of DM: segmentation and targeting.

The process that RedEye terms ‘behavioural email' involves targeting consumers based on their website browsing behaviour, be it abandoning a basket, dwelling on certain content or failure to purchase following a quote. Armed with such information, marketers can then personalise email offers to make them relevant.

There's strong evidence that using website behaviour to target emails improves ROI and relevancy. A paper by Forrester Research in February estimated that behavioural email can generate nearly four times more revenue and 18 times greater net profits than simple, untargeted mailings.

E-consultancy's recent Email Census 2009 found that 47% of companies are planning to use such
behavioural targeting as part of their email marketing.

Which leads nicely to these key questions: what type of online behaviour is the trigger for effective, targeted email, and what steps do you need to take to achieve it?

1. Abandoned basket
Industry research shows that up to 75% of shoppers abandon their carts before the purchase stage. And you don't get much hotter prospects than people who have nearly bought something. A follow-up email when a consumer casts their shopping basket aside typically generates extra sales of 2-4%. Surprising, then, that about 90% of websites do not follow up on abandoned shopping baskets, due to a historical lack of integration of web analytics and email systems.

2. Viewed not purchased
If a consumer visits specific content, such as pages on pet insurance, then they have qualified themselves as
potentially being in the market for that product. The Sainsbury's Bank case study overleaf provides a good example of this.

3. Process drop-out
Behavioural email can be targeted at every step of the online buying process, not just abandoned shopping baskets. The classic example is the consumer who gets a quote but does not go on to purchase. Follow-up behavioural email can help move them along the buying process.

4. Single purchase, discount to purchase again
Marketers tend to underestimate the value of the second purchase. Research shows that if a consumer buys a second time, they are much more likely to go on to become a loyal buyer with a high lifetime value.

5. Reactivation
When a consumer has not interacted with your website or emails for, say, three months, email can trigger some response. Simple RFM (recency, frequency, monetary value) analysis can show the best time to make the communication. Combining web analytics and email data enables marketers to identify unresponsive subscribers and develop tailored messaging to try to reactivate potential customers.

6. Site error or error registering
Sadly most websites go down at some time. It is good customer service to trigger communications to customers who were trying to buy with an apology and notice that the site is back up. It also generates extra sales. It makes sense to treat high-value customers here differently.

Start with the most obvious triggers such as basket abandonment. Once you know what extra revenues these behavioural emails generate, you can then test and refine your campaign. A simple basket abandonment email, for instance, can be split into a number of messages depending on what product the consumer discarded. Ultimately the behavioural email programme builds into hund-reds of different emails triggered by many different online behaviours.

In terms of click-through and conversion rates, the humble email more than punches its weight when compared with other direct response media. And in today's tough market conditions, email marketing needs to work even harder. That behavioural email can generate a 20% improvement in results is a compelling statistic in ordinary economic
circumstances. In a recession, it could be enough to help most marketers ride out the storm.

Mark Patron is chief executive of RedEye

Case study: Sainsbury's Bank
The challenge
RedEye was appointed to increase conversion across the Sainsbury's Bank product range. It was a task made more complex by the absence of direct and regular access to the bank's customer and prospect data.

The solution
RedEye created a single customer view (SCV) of customers already active on the relevant websites, followed by behaviourally triggered email campaigns across their pet and car insurance products.

Analysis of these preliminary results would serve as a benchmark for campaign performance and determine future rollout to other products. The SCV created from disparate data feeds involved combining web analytics and email marketing processes unique to RedEye.

RedEye worked with Sainsbury's Bank to pinpoint the most effective touch-points in a customer journey on its site. This then served as a catalyst for individual emails used to encourage conversion.

Such emails encouraged re-visiting of quotes or reiterated the benefits of the bank's insurance products.

Results
The ROI for Sainsbury's pet insurance promotions using behavioural targeting was 750%, a figure unprecedented for
the bank. Other benchmark results included a 70% open rate in one ‘retrieve a quote' campaign and
a general conversion rate of 12.8% across all campaigns for the bank.