Robert: Welcome to the Ecommerce Marketing Podcast. Today’s guest, we have Xiaohui. Also known as X. X has many years of experience specializing in e-mail marketing for ecommerce, shops, handling ranges of accounts from Mom & Pop stores to IR 500 retailers. X started Essence of E-mail at the beginning of 2014 to help independent ecommerce store owners excel within this very effective marketing channel.
In his free time, he enjoys traveling the world, reading biographies and sipping on a refreshing mojito. Welcome to the Ecommerce Marketing Podcast x. How are you doing?
X: I’m doing well. Glad to be here Robert.
Robert: If we can just start by you telling us success stories of your clients or just different people who use some of the e-mail marketing strategies you’ll be talking about today and how it’s been effective for their business.
X: Yeah, absolutely. We’ll use a specific case of a client we had earlier on in the year. Of course, results may vary depending on your audience as well as your product mix and all of that. In this particular case, our client came to us and he was doing pretty well with the store and they are some good money month over month, but they have not explored e-mail marketing at all. That’s some of our bread and butter when we work with clients. We’d like to either work with clients who already have a marketing program going on with e-mail and improving it. Almost, also, when they come to us and just starting from scratch completely.
In this particular case they were selling a product that is somewhat high under reorder rate. That’s pretty important too to put things to context since e-mail marketing is generally for e-commerce, more of a remarketing channel versus acquisition. There’s some acquisition you can do, but remarketing is where the power lies.
They came to us at the beginning of the year and what we did is we set up a couple of very targeted auto responders for them as well as a few starting campaigns to their list. Basically, to cut a long story short, we started—when they started with us, their e-mail program, they were doing about less than 1%. It was .3% of their monthly revenue from the e-mail channel.
Basically, if you take the .3 a month before, we launched initiatives and then three month after. Comparing it against the three month after, we were able to bring it up to 9.3% of their monthly revenue. Really, a big increase in that particular channel. Most of that is a marginally increase in revenue. We’re pretty happy about that. Of course, the client was pretty happy about that as well.
In general, when we’re looking at ecommerce marketing mix, we like to bring the e-mail channel to somewhere around those numbers. Maybe around 9%, 10%. Potentially, even higher, depending on your niche. Some apparel retailers or other products that can sell over and over again could push up towards 15% or even 20%.
In one case we have seen close to 30% of revenue coming from e-mail, but that was very, very specific case. In general, we want to shoot between 9% to 15% of total revenue coming from e-mail channel.
Robert: I’m sure the client was very happy with the 9% just in three months. It does seem there are some things you can optimize in e-mail to bring in revenue. Also, it’s surprising that event today, there are some businesses that are not using e-mail marketing as a channel just to keep their leads warm, to bring in money. Why is it important, or how can you use e-mail to grow your e-commerce business?
X: Absolutely. I think it just comes from the mindset of store owners, maybe just from even the marketing community in general. It’s very focused towards acquisition, is what I found. It’s the hottest area. How do I acquire new customers? How do get new people through their doors? Et cetera.
You have to think also that there’s a lot of value in the existing customer base and customer retention. When you have gotten that initial customer an the acquisition cause are usually a lot higher than the tension cause, then what do you do to continue to generate incremental revenue from these customers that have bought from you. Presumably, like your brand, like your products and how do we get them to repurchase more. That’s where I think e-mail marketing is a really, really strong channel for this purpose of retention.
In that sense, I think the most important thing is just to have a focus towards e-mail. To actually have this in the back of your mind, this channel can add a sizable portion of my revenue to my top line.
With that being said, I think a lot of—at least, a lot of our clients that come to us, a lot of times they’re “Okay. We know that after reading some articles, thinking about the potential of e-mail,” they know that actually it is a channel that could really bring them some additional revenue. They know they have some—they’re placing some money on the table still. They’re leaving some money on the table.
A lot of times, especially being smaller e-commerce store owner. You may not have—you have a lot of different task to do, but you don’t have exactly all the resources to do it with. A lot of times e-mail takes a back—it becomes on a back burner, versus something that’s a focus.
A lot of times what we like to advice is “Okay. We understand you have limited resources, but if you do these couple of things, then it’s really that 80-20 rule. You’ll get the majority of the benefits with more smaller amount of work than you would have to do if you wanted to capture all the benefits. At the same time, you can really see results immediately when you do this.”
Robert: With you guys at Essence of E-mail, you just try to focus the customer to look at just the remarketing and retention. You really don’t necessarily go after acquisition.
X: Yeah, great comment there. We start with retention, and then we do apply a little bit on the acquisition end. For example, one thing that’s very effective is capturing visitors who are bouncing from your website. Visitors who maybe first time visitors who are coming to your website, browsing around. If they’re leaving without purchasing, that’s actually a great time to try to capture their e-mail address to remarket them later. Because otherwise, you just lose these visitors. Potentially, even pay for with PPC or something into the darkness of the internet. Never to return again.
There are many ways to do that. One of the most effective ways is with a smart overlay popup form which hearkens back to the early days of the web with all the popups. Now, people are doing it much more intelligently. It’s based on a different set of logic which can get pretty advance. How many pages they visited, time on site, even exit intent. Sensing the mouse movement and seeing if they’re making an attempt to exit a website and that then serves up the overlay form. Being more targeted, versus just serving everyone, the form, regardless of whether they’re a repeat customer or a first time visitor.
Robert: That actually brings us to our next question. You mentioned using those overlay popup tools. The next question is actually, what are some of the best tools to use for e-mail marketing? If you can just tell us some of the tools you guys use at Essence of E-mail, and how you get started creating the e-mail marketing campaign for your clients.
X: Yeah, absolutely. The most important tool to get right is what we call your e-mail service provider, or e-mail service platform. This is the big platform that you use to send out your e-mails that you use to pull the data from your shopping cart and all of that.
With that, our two favorite ones are Claveo. For people who perhaps have a lower budget or starting out, MailChimp is a pretty decent for a price as well. Basically, this is where all of your e-mail marketing will live. Your campaigns, your metrics, your templates and everything around e-mail with live within this software platform. You go ahead and you are able to schedule your campaigns. You’re able to do A/B tests. Measure how much revenues bring in and all of that.
That’s the first thing you will need definitely if you’re embarking on an e-mail marketing campaign, or e-mail marketing program is your e-mail source provider. There’s a lot out there, but right now for ecommerce stores, our top choices would be Claveo and MailChimp. There’s always new ones coming on to the market as well. A few years from now it might be a different set. At least for now, that’s our favorite ones.
Robert: Once you get the MailChimp or the Claveo set up, what are the next steps? How do you use these tools to set up your e-mail marketing campaign, to set up your goals of getting the 9%, 10% to 30% revenue from the customers?
X: Yeah, absolutely. Actually, I’d say there’s a few components here. First is just you want to sit down, actually craft some strategy around e-mail marketing. It doesn’t have to be super, super advanced. We found that for clients who’ve had—for our clients, we craft a strategy. For other store owners, we’ve talked to the ones that have some strategy, some marketing plan around this channel are the ones that tend to succeed.
Really, if you think about it, the mechanics sometimes get a little difficult. Overall, if you keep it simple, it’s not super difficult. It’s more about committing to your plan. That’s the first step, backtracking a little bit, is to create that strategy.
What goes in to the strategy, we like to think about e-mail for e-commerce in two main ways. Really, we like to divide it between the manual batch-send campaigns. Which, that varies based from campaign to campaign. For example, in holidays, you’re sending Thanksgiving e-mails, Black Friday e-mails. Maybe during Labor Day, you’re sending e-mails. Those campaigns, you would have to do more manual work for each one to create it depending at your promotion.
On the other end of it is the automated set. You can call these auto responders, you can call these automations, different terminology. Basically, these are targeted e-mails that fire off automatically based on a certain set of criteria.
Some examples here would be if a new customer comes on to your list either through purchase or maybe they’re even a returning customer, then they’ll automatically trigger a set of automated e-mails. For example, maybe the first one would be a welcome e-mail, a thank you e-mail. Maybe something talking about your brand. Getting them to engage in social media. So on and so forth.
Basically, based on the behavior or the characteristics of specific subscribers, they will get a different sequence of e-mails that you have set up that are triggered automatically that once you set up it’s also less work to maintain the ongoing, because in the background they’re running and generating revenue for you.
Robert: Two follow up questions. What’s the balance between the manual and the automated sequence? Do you guys try to balance it out? The second question is, with the automated. How many e-mails do you have in each auto responder or in each sequence?
X: Got you. For the balance, basically—with automated e-mails, a lot of times it’s a lot more work to get set up on a front end. Once you set it up, again, it’s easy to maintain. You can still do some optimizations on it and improve it down the road. Most of it works on the front end.
The manual e-mails, depending on your audience, we might send anywhere between two to—generally, two to four e-mails a month to the bigger list. If you have more segmentation on a list, potentially more e-mails. If it’s holidays, of course, that frequency ramps up highly.
I’ll give you a little bit of numbers in terms of revenue distribution between the two types of e-mails. Generally, we see more revenue coming from the manual e-mails because they tend to hit a lot more volume of your list. If you take just the top line on how much revenue it’s generating, the manual ones tend to do better. Not always, but they tend to.
Usually, we’d say—we probably see a 70-30 or a 60-40 distribution. Manual being 60% to 70%, and then automated being 30% to 40% of the revenue from e-mail. With this, again—we’ve seen distributions where that’s even flipped. In general, that’s how it is. If you break it down a bit and look at not just the top line revenue generated, but actually on a per e-mail sent revenue. The auto responders are by far stronger, because they’re so much more targeted even if the volume is much lower.
Which is also important because you have to balance the e-mails you send, how much revenue is getting. Also, how it’s impacting your list. If you send too much e-mail, yeah, maybe in the short term you’re getting more revenue. At the same time, you might be losing a ton of subscribers. Overall, your list is degrading and you’re losing a lot of subscribers on your list. Eventually, it will whittle down. That’s a balancing act there.
Robert: It sounds like you have to look at a lot of numbers when you’re doing this e-mail marketing. How are you tracking all these numbers? Are you using UTMs when they come to your website? How are you tracking—how is it converting? How am I getting this revenue? From which e-mail? Are there specific things you’re doing, attaching UTMs, analytics? What are you using? It just couldn’t be MailChimp or Claveo giving you all these statistics and all these numbers.
X: Yeah, fantastic question. For us, we have our huge spreadsheet that we actually have our team manually go into different platforms and pull in the numbers and aggregate and then crunch the numbers on a holistic level. In terms of what resources we’re pulling in from, primarily from your e-mail service provider. That’s the Claveo or the MailChimp.
Also, we’re looking at Google Analytics, because pretty much a lot of the e-mail service providers, when you’re setting up a campaign or auto responders, so you can just click a button and it will just automatically append Google UTM source, UTM campaigns, all of that, on to each link within your e-mails. That’s usually pretty nice because at least we get a secondary source of information through Google Analytics which most people use.
With Google Analytics, you get the visit numbers, you get some of the conversion numbers. You don’t really get to open or, I guess, you indirectly get the click numbers, but you don’t get the open numbers because that really is residing on the e-mail service provider. It’s good to see if there’s a big discrepancy or if one is just more accurate you found for tracking the revenue in particular since they attribute it differently.
Google Analytics based on—most of the times, based on last click in the cookies. The e-mail service provider, they have various different attribution. Sometimes they just base it on the time rate when you’ve sent the e-mail, and whether there’s a conversion within that time range.
Finally, we also refer to the shopping cart at time. Specifically, if we are sending an e-mail specific coupon. It’s not showing on the site or anywhere else, then that’s probably the most accurate tracking of the revenue generated by it. If we track it down to individual coupon usage level, and that coupon is only included in that e-mail, presumably the people who bought really did see that e-mail.
Those are the main forms, or main sources of tracking. If you’re using extension, sometimes you have third party extensions that live outside the ESP just to send. Maybe, [inaudible 00:17:28] is a common one that’s maybe an extension on to Magento or some other platform. They usually have their own set of reporting as well. Looking at the numbers there as well.
Robert: It’s just not all setting up “Okay. I’ll set up my e-mail marketing campaign” and then “Oh! There’s my 9% or 10% revenue coming from e-mail.” It’s not that easy, or maybe it is. I don’t know. Before you set up the e-mail marketing campaign, and as you set up that e-mail marketing campaign, what are some things you need to be careful about or you need to note as you set them up? What are some mistakes to avoid?
X: Yeah, absolutely. We wish it was really easy where every campaign we send is supper successful and easy to set up. Unfortunately, that is not the case. A lot of times you’re dealing with technology integration issues and out of all the other things, copy and the design and all of that.
A couple of things in terms of just, I guess, beginner e-mail marketing mistakes to make is, number one, I retouched upon this, not really having a plan. A lot of times you think “Oh! It’s a holiday, so let’s an e-mail or two.” You never realize that because you didn’t have the strategy, your list is cold. Because your list is cold, that’s going to generate deliverability problems due to spam complaints which is going to hurt your list long term. That’s just a really simple example of why not having a plan could hurt you.
Also, some other mistakes potentially is, one, just picking the wrong technology for your needs. We obviously, like I mentioned, we have our favorites. At the same time, you want to do some research based on your custom set up. Is this going to be robust for your needs? For example, certain e-mail service providers and certain shopping carts may not integrate as well. Maybe, you have the tech resources or the development resources to do some custom integration. Maybe you don’t. Maybe you just need an out of the box solution.
Either way, you want to investigate a bit on the technologies that you’re using because there is that switching cost once you’re locked in and realized that “Hey, maybe my data can’t even get through.” That’s important to do your research on that.
Another we thing we noticed is actually on the metrics tracking end. I’m glad we talked about it earlier, because a lot of times a surprising number of people we talked to just are not tracking the actual conversions. A lot of time—because in the e-mail service provider, sometimes it comes out of the box with the conversion tracking and the revenue tracking. Sometimes you have to set up an extra step or use a different integration.
Natively, they all show you the opens and clicks on e-mail which is great. That’s important metrics. At the end of the day, if you can’t tell how much revenue you’re generating from the e-mails, then that’s not going to be able to drive your decisions very well. Ultimately, you want this channel to give you that ROI based on the hard cost involved.
Definitely, look into making sure your metric tracking and specially conversion tracking is set up correctly, and actually showing you the numbers.
Robert: All these, it sounds good, it sounds okay. There’s a business out there, they’ll be thinking “Okay. Maybe I should just set up my e-mail marketing campaign.” or “It sounds like X was talking about setting up automatinos, doing manual, doing this tracking.” They might think they will be getting overwhelmed to do all of these. You’re saying it’s work, if you just do it slowly.
If they just want to do something today, right now, one thing they can do to improve their e-mail marketing or set up the e-mail marketing. What is that one thing they can do right now that’s going to help them start generating revenue from e-mail?
X: Yeah, absolutely. It actually would depend on what step they are with their e-mail program. Let’s take the scenario that they are completely from scratch. Maybe they have a customer’s list. Let’s say they’ve been in business for a few years or something. They have a customer list, but they just have not sent out any e-mails at all other than transactional ones and naturally are sent out.
What they need to do is, first, get the infrastructure set up. In that case, get their e-mail service provider to sign on that and get the integrations integrated so that the order data and all the data is passing. From there, what we would normally do is we would take that list and run it through a list verification service so that it’s—because normally, that list is going to be pretty cold because you haven’t e-mailed them. There’s going to be some bad addresses.
[inaudible 00:22:25]—take the good e-mail addresses. Then the first step there is to send out what we call just a starter campaign or reactivation campaign to that list. Even if they had asked to be opted in, a lot of times it might be a little bit old because it might be several month or maybe even years. Send out that activation campaign. There’s two ways to do it. The cleanest way would be to ask them to subscribe to your list again. The respond rates of course are going to be lower than if you just ask them instead to say “If you don’t want our e-mails, unsubscribe. Here’s the button to unsubscribe.” Is the checkbox prechecked or not prechecked?
Actually, you do want to—just a caveat on that. Depending on where you’re operating in. The country you’re operating in or the country you’re selling to. The laws may change a bit. The U.S. CAN-SPAM laws are different than Canadian, which is different than Germany. Do make sure whatever marketing you’re doing is actually in accordance of laws in terms of the opt-in.
Both—that caveat out of the way, sending that initial campaign does some good things. First, you’ll start getting in the process of actually sending e-mail campaigns, which is good. Second, and more importantly I think, is you’ll get some data to chew on.
You can see what the results are from that initial campaign, and then extrapolate a bit and think “Hey, is this actually going to make sense for me to invest in?” We think most of the time it actually does make sense, just giving the power of the channel as a remarketing channel.
There are going to be cases where just maybe your list size is really small at this point, or maybe your audience purchases once and never purchases again, or they’re just not very responsive for whatever reason. You want to take in to consideration the hard cost of the software and building out the campaigns. What it could potentially bring you.
With the starter campaign, you get at least a little sense in terms of how many conversions you can potentially get from just e-mail marketing. That’s what we recommend people start. From there, I’d say just choose a frequency in terms of campaigns you want to send out and then just choose three or four sequences in terms of auto responders you want to build out and get those rolling and built out and live.
That’s probably a ground zero approach in terms of starting from complete scratch in terms of e-mail marketing. Though, not a complete scratch for the store business.
Robert: Okay X. We’ve covered a lot. I really appreciate you sharing all these strategies. Can you tell us—I forgot to ask at the beginning, and that’s a mistake and my fault. Tell us about Essence of E-mail, why you started it? Just a quick background of you came down this path.
X: Yeah, absolutely. Glad to share it. I had actually been working with previous marketing agency in the Bay Area for a while, in the same niche. Working with e-mail channel, specifically for ecommerce stores. Basically, I decided to start Essence of E-mail to mostly service independent store owners.
A lot of times, our market really isn’t the Macy’s or the Nordstrom’s of the world yet. The reason being, we find there to be a lot more impact when we serve people who potentially have smaller teams or just have lack of resources for most part, where we can come in and really make a big impact on their e-mail program. Versus a gigantic retailer who has their in-house teams and everything like that.
I started this company and to-date, we pretty much only work with—or at least we really, really specialize in ecommerce stores or e-mail marketing. Not to say, in the future, we might not diversify it. That is the core business right now.
Basically, we will be able to handle, depending on different packages, all your e-mail marketing needs. We have anywhere from just like a project base, implement specific auto responders, help migrate you from platform to platform, or just taking over the entire channel and driving the strategy to metrics, to creation of the campaigns and everything along those lines. Pretty much full service capacity in terms of this channel.
Robert: If people wanted to find you or contact you, how can they reach you?
X: Yeah, the easiest way to reach me personally is just to send me an e-mail at—it’s very simple. It’s just firstname.lastname@example.org. You can also—we do have a number on our website as well, so you can call if you want to call instead. If you want more information, just go to our website and there should be plenty over there.
Robert: Any final thoughts? Is there something we’ve missed or we haven’t covered today?
X: Yeah. I think we covered a good spectrum. Obviously, this channel, there’s a lot to talk abut, a lot of specifics and tactics. I think a parting thought is it’s most important to just realize the potential of e-mail if you don’t. From there, just having a plan on tackling the channel, even if it’s a simplified plan, even if it’s just taking it one step at a time versus jumping into a deep end. Yeah, if you just put work into it, it’s going to return you some pretty good ROI from what we’ve seen.
Robert: Okay X, thank you for being on the podcast.
X: Sure. No problem. Glad to be here.