Maximising revenue is something every business clamours for – particularly given the events of the past 18 months. And as we exit lockdown, there are some simple initiatives, driven by a smarter use of data, and an all too often underestimated channel – email – that can work wonders for driving revenue, particularly for ecommerce.
But first, I need to admit a guilty secret.
At the beginning of lockdown, we, like many Sydneysiders, rushed out to pick up bulk supplies of “essentials.” Not, as you might be thinking, pallet-loads of toilet paper. Rather, cartloads of chocolate, and more specifically, Haigh’s* chocolate (which if you haven't tried yet, please rectify this immediately - they are amazing).
The truth is, while the Brown household likes its sweets, we’re not normally large chocolate eaters and under normal circumstances this stash would have lasted well over a month. However after week two our cupboard was bare, stores were closed, and Ange’s petition for Haigh’s to be declared an essential service failed to gain traction on GetUp! But just as panic was setting in, calm heads prevailed, with a reminder that Haigh’s had an online store. Problem solved.
As lockdown extended, we found ourselves ordering more and more. It was the same order every time and was significant (partly due to the care packs for Ange’s parents who live around the corner – we’re not that greedy!).
I’m sure most people can relate to something like this during lockdown. But as someone who loves data (almost as much chocolate), I just couldn’t get over the disconnect between the Haigh’s emails we received and our actual purchasing behaviour.
It felt weird. Like they didn’t know us. Emails were one-size-fits-all, when they could so easily have been one-more-pack-of-aprichocs-Luke?
A client of ours refers to this as “smashing the base,” a tactic that can have the unfortunate side effect of driving up unsubscribes. Many brands do it, but online bookstores are notorious for generic “base smasher” emails: the latest sports bio, the next ex-Masterchef cook book and 50 other shades of beige. I mostly buy books for my kids, yet amazingly, I never get a pre-order email for the next instalment in the book series they’ve been reading. The data exists and would drive substantial revenue for them.
A better strategy for a brand like Haigh’s would be a replenishment email: a simple reminder to customers to make another purchase when the product is likely running low. You can automate this type of email in most email systems based on the data held in the ecommerce platform or CRM system. And even if you’re unable to approximate when replenishment is due at least acknowledging prior purchase is a no-brainer.
Granted, many brands use email communications to cross-sell or up-sell rather than replenish. But in my opinion, email is too often considered as an after-thought; the channel with the least budget and the lowest amount of thought.
Now consider these numbers:
- The average ecommerce store earns 41% of their revenue from a mere 8% of their customers (repeat customers).
- Customers who’ve purchased from your brand twice already, are 9 times as likely to convert to sale compared with a first-time visitor to your site.
- The top 10% of your customers are worth 6 times as much on average as the rest.
- Repeat purchasers spend 300% more than a first-time customers.
That’s clearly a large amount of potential revenue, that could be capitalised on by maximising the use of data within a business – and specifically through how well you use email.
For native online businesses much of this behaviour comes naturally because it’s been baked into their business from day one. But for more traditional bricks and mortar business who’ve moved into digital, many are missing a very big trick.
So how could you use data better in your business? The reality is most businesses lack any semblance of a data commercialisation framework. Everyone knows data is an asset, but very few truly commercialise it. And as my Haigh’s story shows, it doesn’t need to be complicated, or expensive. By simply using the right data – which you already have – you can start realising new revenue and higher profit.
*Haigh's I hope you can forgive me for starring you in this how-not-to – definitely written with a whole lot of love & respect for a beautiful product and family business.
If you’d like to get some advice on your current email program, or need some help with getting started on a data commercialisation framework, feel free to drop me a line at luke@affinity.ad
