Everyone hates spam. And I admit it; I’m part of the problem. No, I don’t control a vast army of evil spam-bots who do my bidding, filling people’s email inboxes with unsolicited email offers to save 50% on Viagra or Rolex Watches. I’m just a tiny cog in the giant well-oiled machine called Email Marketing.But, as a business software insider who has co-written numerous technical articles on topics like, “Expand the Content of Outbound Email Campaigns” and “Your Mass Emails Can Also be Personal if You Use Marketing Attributes”, I do feel somewhat responsible for the misguided usage of email marketing. And I’d like to make amends.
Here’s the truth about even the most carefully crafted targeted email marketing campaigns: they suck. Look, just because you once bought a product from me, doesn’t mean you now want to receive weekly/daily/hourly email offers from me. High-frequency communications, no matter how nicely formatted or personalized, aren’t going to lure you into doing more business with me or improve our “relationship”. If you get two unsolicited emails from me in the same week, I’m pretty sure you’re going to click the Unsubscribe link at the bottom of the email.
Smart companies are realizing that rather than bombarding customers with spammy email offers, there are more effective ways of increasing repeat purchases and gaining a greater customer wallet share. Amazon.com comes to mind as a particularly good example – for a number of reasons.
Everyone is of course probably already familiar with Amazon’s intelligent product recommendation tools, such as, “Customers Who Bought This Item Also Bought” or “Inspired by Your Browsing History” suggestions which encourage customers to buy additional items that they may have not previously considered (or even been aware of). Suggesting relevant add-ons, accessories, related products, or upsells at the time of purchase is far more effective than sending an unsolicited follow-up email a month later.
Much has also been written about the great success of Amazon’s “Prime” membership program which offers customers unlimited free shipping in exchange for a $79 a year membership fee. It’s not actually the annual fees though that are padding Amazon’s bottom line. Rather, the real success of the program is about modifying customer behavior. It has been shown that customers with Amazon Prime make more frequent purchases and spend 200% to 300% more than regular customers. Now that’s how you grow your customers!
Another interesting thing that Amazon has rolled out to increase customer purchase frequency is their “Subscribe and Save” program for selected products that people tend to buy on a regular reoccurring basis such as vitamins and supplements, health and personal care items, baby food, diapers, pet food and pet supplies, and so on. When a customer selects one of the eligible items and add it to their cart, Amazon then offers the customer a slightly lower price if they sign up to receive shipments at regular intervals. The customer can choose the frequency of the shipments, skip shipments when necessary, or even unsubscribe at any time. It’s not about locking the customer into a contract (as in the Telco industry), but rather it’s about converting one time shoppers into regular repeat customers.
When I sat down to write this blog, I didn’t intend it to become a tribute to Amazon.com. Although I have to give props where props are due. Amazon certainly does a great job of encouraging customers to buy more products – and to buy more frequently. And they do it without any spam.
I think all of us, regardless of our Industry and whether we are in business-to-business (B2B) or business-to-consumer (B2C) sales, can probably think of ways we can apply similar strategies in our own organizations or in our own lives. As an example, let’s talk about something near and dear to my heart (or my feet as the case may be) – running shoes. My running buddies call me a “shoe whore”, though they insist it is meant as a compliment. I probably own several dozen pairs of running shoes (that may become a future blog post of its own) and I am constantly buying new ones as the old ones wear out.
As you might suspect, I get inundated with emails from running shoe stores and online sports retailers promoting their latest sales. Typically these emails are completely generic, advertising various brands and models that I have never bought and will likely never purchase. You see, I’m a bit specific about what brands, models, sizes, and colors I wear. As someone who regularly purchases Brooks Pure Grit men’s 10.5 in black, I’m not particularly interested in saving 40% off on fluorescent women’s Nike’s.
Similarly, if I just bought a new pair of racing flats last week, I’m probably not already interested in buying another replacement pair already this week. While I log a lot of miles, my shoes do generally last me longer than a week. As a fairly regular runner, I typically replace my shoes every 3 months based on the amount of mileage I run per week. Obviously a less active runner might replace their shoes less frequently, perhaps every six months. And this is a perfect case for a “subscribe and save” offer!
Clearly, companies could stand to gain a lot from moving away from generic, albeit “targeted” and “personalized” email sales offers that address the customer by name and utilize a relevant marketing attribute or two, but show no real understanding of the customer’s needs or buying behavior – and instead implement programs that let customers indicate which products they want, and at what frequency they want to buy them.
This stuff isn’t science fiction. The technology is already here. Using tools like SAP CRM and SAP Hana, you can make sense of big data on the fly to retrieve – at the moment a customer adds a product to their cart on the web site – what other products that customer has purchased in the past, what related marketing attributes might be relevant, and the typical usage patterns for similar customers. Based on that information, you can recommend a purchase frequency to the customer and a corresponding discount level. Presto!
To learn more about how SAP can help you increase customer retention and drive repeat business – all without being “spammy” – sign up today to attend the annual America’s SAP User Group (ASUG) and SapphireNOW conference co-located in Orlando, Florida from May 14 – 16. I’ll be there. And I hope to see you. But leave your spam at home.
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