Personalized
Commerce
This project involved sending personalized letters to customers to increase engagement and build stronger relationships. Using data from the customer database, I worked with the in-house creative team to craft personalized messages that addressed each customer by name and highlighted their specific interests and purchase history. By taking this personalized approach, I was able to significantly increase response rates and drive customer loyalty.
Task At Hand
Challenge: The company was facing a high amount of customer churn and low retention rates with the majority of customers only placing one order. The marketing team was only able to revive a small percentage of accounts through traditional marketing channels such as targeted ads and email. The company had dipped their toe in direct mail campaigns before, but never at the personalized level.
Solution: I was tasked with developing a new direct mail channel that utilized customer insights to send out a ‘hand-written’ personalized message. I partnered with our data analytics team to develop the audience and control groups, our email team to run a matching campaign on their channel in order to compare response rates, the in-house creative team to bring the campaign to life, and of course legal for approval. For external partners, I had to find a printing partner who was also able to do the text transposition, printing, and the shipping at scale. I also worked alongside start-up SaaS company that generated the handwritten text.
Program Goals:
Increased Repurchase Rate
Increased Revisit Rate
ROI positive
Reduce Churn
Customer Experience Goal: Recognize our customers for their loyalty and acknowledge any negative customer experiences in order to earn her trust and grow brand loyalty.
Tests & Results
Test 1: Outstanding Store Credit
About: Send personalized direct mail to customers reminding them or their outstanding store credit.
Key Audience Filters: Customers with $10-$100 of store credit that expired >= 90days. Customer who have not visited the site in 91, but last order was within 728 days.
Audience Size: 18.5K
Results: Incremental ROAS: $0.99
Test 2: Churned due to long order to delivery (OTD)
About: Send personalized direct mail to customers who haven’t placed an order in 180+ days due to long OTD (20+ days) along with a $10 off coupon.
Key Audience Filters: Customers who experience OTD >= 20 days, OTD was based on customer’s last order delivery status, last order was <728 days.
Audience Size: 5K
Results: Incremental ROAS: $0.34
Test 3: Churned due to Product Quality (PQ)
About: Send personalized direct mail to customers who haven’t placed an order in 180+ days due to bad PQ experience (low star rating, NPS detractor, Refund due to poor quality/damaged/defective products)
Key Audience Filters: Customer who gave a <=2 star rating to any item in their last order, or a customer who is an NPS detractor or a customer who refunded any item in their last order du to damage, defective, or quality issue.
Audience Size: 5K
Results: Incremental ROAS: $0.21
Test 4: Company 10th Birthday Celebration
About: Send personalized direct mail to active customers thanking them for spending the last X years with us.
Key Audience Filters: Customers who had placed a purchase in the last 90 days, who had shopped with us for the 8+ years, and who activated 1 year after their first visit.
Audience Size: 15K
Results: Incremental ROAS: $1.14
Learnings
Test Results: Overall, it was gleaned that we saw better engagement results from the personalized commerce vs. the traditional email channel. Additionally, we saw positive momentum when we interacted with already engaged customers. Re-activating a churned customer is extremely difficult especially if too much time has passed. A better approach for churned customers is to look for pre-churn behavior such as; low star rating on product reviews, low NPS score, and/or returns due to quality. If you catch the behavior and send out communication within the first 3 months, there is a higher likelihood that you can retain the customer.
Cost Savings: When considering running a direct mail test, there are several ways you can cut costs. The first test we did cost $1.98 per send. Post negotiations and a few creative tactics, I was able to get the cost per send down to $0.68.
1) Look into testing smaller card sizes. When I moved from a 5x7 to a 4x6 it had no impact to the customer response, but saved us $0.50 per send.
2) Another idea is to opt into bulk postage which is less expensive than the standard stamp. I wanted our cards to appear hand written and personalized, so I chose to add a fake stamp to the card.
3) Lastly, I found using a ‘handwritten’ like font vs. a handwriting software was just as convincing to the customer and much more appealing for my marketing budget.
What to Avoid:
DO NOT inundate the customer with mail. We established a guardrail of no more than 2x a year with at least 6 months between sends.
Only use information that customer’s would have knowingly provided ex. join date, purchase history, address. AVOID personalized information that may not be top of mind to the customer that website tracks i.e. time spent on a page, browsing history.
Recommend only interacting with customers that have engaged with the company in the last 1.5 years. Customers beyond that time should be treated as a new customer who need a deeper reminder on the brand.