DEMCO Abandoned-Cart Emails Kicking Patooty
By Ken Magill
It is no secret that triggered emails—messages delivered as a result of some action taken or not taken by the recipient—outperform broadcast messages.
After all, they’re timely and relevant.
But given the relatively little amount of labor they demand compared to other targeting efforts, how much triggered messages outperform broadcast emails can be stunning.
Case in point: an abandoned-shopping-cart email program implemented by library supplies merchant DEMCO in 2009.
The program entails three messages sent one, three and five days after the cart is abandoned.
The first message serves as a simple reminder. The second is a little more urgent and the third offers a free tote bag as an incentive to purchase.
According to Lisa Moling, e-marketing manager for DEMCO, the messages convert at 22 percent, 15 percent and 24 percent, respectively.
“We don’t put an offer in that first email and we still get a 22 percent conversion rate,” she said. “That’s staggering. It’s just as high as the third message where we put an offer.”
By comparison, the average conversion rate of DEMCO’s broadcast emails is 5 percent, according to Moling.
She added that the cart program was implemented to battle DEMCO’s abandoned-shopping-cart rate of 30 percent.
“We were above the industry average but it was still a lot of people,” said Moling.
Indeed, according to business-to-business online marketing consultant Amy Africa, on average 60 percent of online shopping carts are abandoned.
Meanwhile, DEMCO’s abandoned-cart emails average a 37 percent open rate—an “open” is recorded when the receiving machine calls for images from the sending machine—which is more than four times higher than DEMCO’s broadcast emails’ open rates, according to Moling.
Also, DEMCO’s abandoned-cart emails drive 97 times the revenue of its broadcast messages, said Moling.
“That’s where we’re really seeing the bang for our buck,” she said.
Also, while abandoned-cart emails account for 0.3 percent of DEMCO’s outbound messages, they account for 18 percent of the company’s email sales, according to Moling.
“That shows that relevancy and targeting really pay off,” she said.
When asked if she was concerned the program may be training customers to wait for the tote-bag offer, she said: “It’s possible. It’s something I need to look at. … But the cost of the tote bag is such a small percentage of our average order size,” she added.
Moling requested that DEMCO’s average order size not be published here but supplied the number off the record and the tote bag is, indeed, a minuscule price to pay to close the sale.
Another plus for the program was it required comparatively little IT involvement. “We had to involve them, but it wasn’t as intense as it can be with other projects,” said Moling.
Relative ease of implementation and likely returns helped make the sale internally, according to Moling.
“With all the priorities IT has, I said: ‘If I do this program I can bring in this much revenue.’ And they said: ‘Okay let’s get some IT resources assigned to this and get it rolling,” said Moling. “It does take a little time and planning to set up, but once it launches it really kind of runs itself.”
In fact the program worked so well right from the start, DEMCO has done very little testing on it, said Moling.
“We got this up and running in 2009,” she said. “And once it was up and running, we saw the revenue coming in and we had other fish to fry, so we said: ‘Let’s just let this one run.’”
Moling has made one tweak in the program, however. The original program told recipients if they didn’t purchase, DEMCO would empty their carts. Turns out people don’t like the idea of having their carts emptied.
“We got quite a few phone calls,” Moling said. “A lot of people use shopping carts like a list. Once we got the customer service calls, we changed that immediately.”
So can every e-commerce organization that implements an abandoned-cart email campaign expect similar results to DEMCO’s?
According to Loren McDonald, vice president of industry relations for DEMCO’s email service provider Silverpop, the answer is yes—that is, as long as it’s done well.
McDonald said he’s seen abandoned-cart programs account for from as low as 0.5 percent of a company’s email sales to a high of 70 percent, but the sweet spot for abandoned-cart programs seems to be between 20 percent and 30 percent.
“If you’re running a really good program, 20 percent should be attainable,” he said.