Commentary

Better ROI Through Re-engagement

Online marketers are aware of the power of shopping-cart abandonment tools, but the reality is that solutions addressing the shopping cart alone are missing a significant number of potential sales, sales lost before the shopper adds any products to a shopping cart.  

How to retrieve those lost sales? Identify and pursue opted-in consumers who show interest in your ecommerce website and yet don't place items in a shopping cart.

A blind study conducted by my company for a period of six months prior to, and six months following, integration of a website reengagement program showed that website re-engagement lowers vendor email costs between 21% and 32%.

First we studied the cost to generate one dollar in revenue for the company prior to instituting a re-engagement program. Next we used the same calculations starting four months after the re-engagement program had gone live (in order to eliminate the possibility of lift being due to the newness of the program).

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There was no significant rise in unsubscribes or complaints directly from customers, or through ISP feedback loops, once the reengagement program was instituted. There were minor differences in complaint and unsubscribe rates after the program was launched, in some cases slightly higher and in others slightly lower.

Customer 1 was a cosmetics ecommerce company

  • Without using a website re-engagement strategy, the company sent 4.7 million emails at a cost of $2 per thousand. The total cost was $9,400.00 to send those emails, or $0.03 per email. Total revenue was $141,000.00. The cost of generating one dollar in revenue was $0.066.
  • Using a website re-engagement strategy, the company sent 4.7 million emails at a cost of $2 per thousand, and an additional 141,000 emails at a cost of $2 per thousand. The total cost was $9,682 to send those emails. The revenue generated by the re-engagement emails was $46,500, for a total of $187,500. The cost of generating one dollar in revenue was $0.052.

Customer 2 was a women’s clothing retailer and catalog company

  • Without using a website re-engagement strategy, the company sent 1.2 million emails at a cost of $3 per thousand. The total cost was $3,600 to send those emails, or $0.06 per email. Total revenue was $72,000. The cost of generating one dollar in revenue was $0.o5.
  • Using a website re-engagement strategy, the company sent 1.2 million emails at a cost of $3  per thousand, and an additional 66,000 emails at a cost of $3 per thousand. The total cost was $3,630 to send those emails. The revenue generated by the re-engagement emails was $36,300, for a total revenue of $108,000. The cost of generating one dollar in revenue was $0.034.

Customer 3 was a catalog and online home décor company

  • Without using a website re-engagement strategy, the company sent 400,000 emails at a cost of $4 per thousand. The total cost was $1,600 to send those emails, or $0.06 per email. Total revenue was $5,600. The cost of generating one dollar in revenue was $0.29.
  • Using a website re-engagement strategy, the company sent 400,000 emails at a cost of $4 per thousand, and an additional 11,000 emails at a cost of $4 per thousand. The total cost was $1,644 to send those emails. The revenue generated by the re-engagement emails was $2,057, for a total revenue of $7,657. The cost of generating one dollar in revenue was $0.21.

Customer 4 was an electronics retailer

  • Without using a website re-engagement strategy, the company sent 1.6 million emails at a cost of $4 per thousand. The total cost was $6,400 to send those emails, or $0.14 per email. Total revenue was $22,400. The bottom line? The cost of generating one dollar in revenue was $0.29.
  • Using a website re-engagement strategy, the company sent 1.6 million emails at a cost of $4 per thousand, and an additional 72,000 emails at a cost of $4 per thousand. The total cost was $6,688 to send those emails. The revenue generated by the re-engagement emails was $18,576, for a total revenue of $40,976. The cost of generating one dollar in revenue was $0.165.

Website re-engagement enables companies to identify opt-in email subscribers when they visit the company’s website and send them a re-engagement email message shortly after they leave the site. The functionality is rules-based. Typically, companies:

  • send re-engagement emails to subscribers who have not made a purchase over the previous two weeks.
  • send one re-engagement offer per day.
  • limit re-engagement offers to current site offerings (typically a reminder of free shipping or a special code that can be used for a discount on the site).

In addition, re-engagement emails may offer product content based on specific pages the subscriber visited while on the site.

In view of the fact that only 5% of site visitors ever get to the shopping-cart stage, shopping-cart abandonment strategies engage only a small percentage of customers. Website re-engagement engages every customer.

1 comment about "Better ROI Through Re-engagement".
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  1. Pete Austin from Fresh Relevance, July 10, 2014 at 8:59 a.m.

    @Paula Lynn, that's why it's a good idea for shopping cart abandonment emails to suggest similar products, as well as telling the shopper what was abandoned. Perhaps the related product suggestions will help the shopper find something that "fits right".

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