Analyzing abandoned shopping cart data from one of our customers last week made me sit up and take notice: Optimizations to their remarketing campaign and the introduction of a promotional discount for the first time caused their recovery rate to jump from 18% to 46%.

Wow. Clearly promotions can make a big impact.

There’s lots of academic research which shows that while promotions have limited affect on long-term sales, they enable marketers to grab market share by incentivizing consumers to stock up on their product at the expense of a competitor’s share.

But while analyzing this data, I wondered whether promotions work altogether differently in remarketing, compared with a promotion made at the point of sale.

A point-of-sale promotion encourages the customer to add a promoted item to their shopping cart and checkout. A remarketing promotion encourages a shopping cart abandoner to come back to the site and buy the items they abandoned. The difference here is, of course, that the abandoner has already considered—and rejected—your value proposition and decided not to buy.

A portion of your abandoners, of course, are still considering and have decided not to buy yet, but as we know from multiple studies, ecommerce leads go cold very fast. The latest study from MIT shows that 90% of ecommerce leads go cold in just one hour.

So perhaps promotions have a very different role to play when looking at shopping cart abandoners. Promotions are your chance to achieve two goals, when customers have already decided not to purchase from you:

1)      Get the customer interested again

2)      Recover the lost sale

Why Promotions Work So Well in Remarketing Emails

So what role exactly do promotions have as part of a remarketing campaign?

Uniquely, remarketing promotions give the ecommerce merchant the opportunity to change the value proposition after the initial one has already been rejected. In this way, certain types of promotions work more effectively than others. In order to understand this, though, we need to go back to the causes of abandonment in the first place.

Reasons Why Visitors Abandon Their Shopping Carts

The two biggest causes of shopping cart abandonment are:

1)      Price, in particular the cost of shipping and handling

2)      Timing, such as, the customer is not yet ready to buy

Price-based promotions can address the price objection directly. ‘Free shipping’ promotions also work really well, because the cost of shipping and handling is one of the most significant causes of shopping cart abandonment. But neither of these promotions addresses the timing issue directly.

Creating a Compelling Event

If a visitor is not yet ready to buy, then promotions can still have a significant impact by creating a time-based compelling event, in effect pulling the sale forward. The compelling event changes the value proposition by making the offer time-limited; they have to act now in order to get the sweeter deal.

As a rule, ‘Free shipping if you buy within the next 24 hours,’ will work better than a straight free shipping offer with an unlimited time period. So making the offer time-limited is important. It’s not as easy to do, in a shopping cart abandonment remarketing email, because we don’t know when the email will be opened after it is sent. The best practice to address this is to generate a one-time promotion code at the point of abandonment, which is time limited, allowing a few days for conversion after the promotional email is delivered.

When To Use Promotions, in a Multi-stage Remarketing Campaign

When a shopping cart abandoner receives a remarketing email, the majority are highly engaged with your brand. From earlier research and analysis, a real-time shopping cart recovery email will achieve very high open and clickthrough rates, two to three times higher than you would get from all of your other email marketing efforts. After all, they’ve just left your site having almost made a purchase, and now you are contacting them specifically about the purchase they almost made. But as a rule, your campaign shouldn’t make an immediate promotion.

Here’s what a typical starter campaign might look like:

First step

Your first contact should be in real time (i.e., immediately following the abandon) and should use a service tone, and no promotion. ‘Can we help?’ is a good starting point.

Second step

Assuming the abandoner doesn’t come back and buy immediately, you might follow this email with a second 23 hours after their abandonment so that it’s waiting in their mailbox before they come online the next day.

Third step

Assuming the abandoner hasn’t purchased, then 6 days and 23 hours after each visitor originally abandoned their shopping cart, you should send a promotional email to sweeten the deal and hopefully get them to come back and buy.

This outline campaign is a starting position only, and to do this, of course, you need automation. While trigger campaigns like this are set up in advance and executed automatically every time a visitor abandons their shopping cart, you should not ‘set it and forget it.’ As we showed earlier, tuning your campaign can have a dramatic impact on performance.

Training the Customer

When offering promotions in remarketing emails, you need to take care to avoid training customers to expect a discount. For example, if every time a visitor abandons a shopping cart they get an immediate promotional offer, they will learn very quickly that abandoning pays. This can cause your shopping cart abandonment rate to rise and erode margin. This is particularly important for ecommerce merchants for whom there is a strong element of repeat purchase.

There are several techniques you can use to do this in addition to leaving the promotion to the last step of a remarketing campaign sequence. I plan to cover these in a future blog.

If you’d like to learn more about which promotions work best in remarketing campaigns, you may be interested in a Conversion Academy webcast, “Promotion Strategies for Abandoned Shopping Carts,” on Thursday, April 14, 2011, at 12:00 p.m. Eastern time. For more details or to register, visit https://www1.gotomeeting.com/register/898672944.

When it comes to email remarketing, one question that I get asked fairly regularly is about what is needed to ensure compliance with CAN-SPAM in the U.S. and the European Privacy Directive in Europe when setting up a remarketing campaign. The situation is really straightforward in the U.S. (it comes down to little more than checking your privacy policy), but it is slightly more complicated in Europe.

As a result, we engaged Ruth Boardman, a partner at Bird and Bird LLP, and one of the world’s leading electronic data privacy experts. Ruth and I co-authored a white paper on email remarketing compliance that covers this subject in more depth, and additionally, we recorded a webcast titled Email Remarketing and Compliance (in the U.S. and European Union).

For this blog, we’ll focus exclusively on the U.S., and I’ll write about compliance in the European Union separately.

CAN-SPAM Compliance Remarketing Checklist

The only thing that you need to do to send remarketing emails in the U.S. and comply with CAN-SPAM is to check your website privacy policy.

Most website privacy policies already contain the required language which covers using the data that has been captured for remarketing. But you should check your privacy policy to ensure that yours does as well.

Typically, privacy policies contain sections on:

• (i)  what information will be collected, and
• (ii) what it will be used for.

You should check each section as follows:

• (i)    What information will be collected
  Check that your privacy policy states that you will collect email addresses. This will look something like this clause:

  What Information Do We Collect?
  When you order from us, we collect your name, billing address, shipping address, email address, phone number(s) and credit card number (with expiration date) or gift card number.

• (ii)    What the collected information will be used for
  Check that you have a clause similar to this:

  How Do We Use Your Information?
  We may use your information in a number of ways, including the following:

  For marketing and promotional purposes. For example, we send out email and direct mail to our online and store customers about products or events that we think may be of interest to them. We also may send you offers for discounts or free services (e.g., free gift wrap or shipping) on our site or in our stores.

  Your marketing and promotional purposes clause may cover remarketing, but it is best practice to add a clause specific to remarketing. You can find an example in the email remarketing compliance white paper here.

That’s it. It’s all that is required to comply with CAN-SPAM. Simple, huh?

Next week, we’ll look at remarketing in the European Union and see how things are different in Europe.

Before thinking about solutions to your shopping cart abandonment problem, it’s useful to look at the reasons why customers abandon. Based on this Forrester study, you can group the top 5 reasons into:

• Price, especially shipping and handling, and shopping around for a deal
• Not ready to buy

But what all the research tends to miss are the emotional reasons for abandoning a shopping cart. In particular, confidence in the brand, service and, if your site is not a global brand, the basic worry of doing business online with an unfamiliar brand.

Holiday Season Shopping Cart Abandonment Checklist

Hopefully you’ve been working on most of these items for months, but if not, it’s not too late to implement many of these this year:

1. Drive down shipping and handling costs
   The number one reason why customers abandon shopping carts is the cost of shipping and handling. While you may have seasonal free shipping promotions planned, these are tactical and it is difficult to offer free shipping more broadly. But driving down your shipping costs to rock bottom should be a priority at this time of year. This should have a measurable impact on your conversion rates.
2. Minimum order free shipping
   If you can’t offer free shipping, offer free shipping above a minimum order value. This should increase your average order value. Display prominently the minimums required for free shipping. Tell customers how much more they need to spend to get free shipping.
3. Give them valid voucher codes
   We know customers are looking for deals at this time of year, and it is important to recognize this behavior. Ecommerce sites that provide a list of valid voucher codes on their website have found that they reduce both affiliate fees as well as increase conversions. For example, Macy’s gets a 40 percent conversion on visitors to its voucher pages. An additional tactic to consider is to move the coupon code box down the checkout process to make it a bit harder to shop for voucher codes. If customers still abandon with invalid voucher codes, then trigger a real-time email with a valid voucher code.
4. ‘Email me this’ button on product detail pages
   In the run up to Black Friday and Cyber Monday, we know that customers change their behavior in anticipation of holiday promotions. The shopping cart abandonment rate changes dramatically as customers move into a research mode, waiting for the promotion to be rolled out. There’s been a trend toward using shopping carts as ‘shopping list reminders,’ so a permanent shopping cart is a great bonus which enables customers to store their potential purchases. But putting in a permanent shopping cart is not a 10 minute job, so an alternate that you can still get in this year is the ‘email me this’ button on the product detail page. Sending the customer an email with an item they were viewing is a great way to provide a reminder that they can keep in their in box together with an easy link back to the page. This is a very simple remarketing technique that works very well and isn’t hard to do. It also has the benefit of capturing email addresses.
5. Promote your phone number
   Particularly if your site is not a well recognized brand, promoting your telephone number is important in converting those nervous about doing business with you online. The customer may have questions or just need to believe that there is a real business and a real person behind the website. If you’re a well known brand, you should be doing this already; in many cases, simply by offering a phone number, you can recover about five percent of sales that would otherwise be lost.
6. Build trust with social media engagement
   Last year, most retailers made extensive use of social media to promote holiday season special offers. But social media should not be just about promotions. If your brand is less well known, engaging potential customers in dialogue about your company, products and services will build trust at a critical time. Remember that shopping is more about emotion and less about rational decisions to many shoppers. Positive emotions about potential purchases are countered by negative emotions about potential post-purchase dissatisfaction. There is no substitute for a direct conversation with the customer to reassure him/her that you are a company with great service.
7. Send remarketing emails
   Customers that abandon their shopping carts are customers that almost purchased. One of the most effective techniques to reducing shopping cart abandonment is to trigger recovery emails to abandoners. Most ecommerce companies that send shopping cart recovery emails recover between 10 and 30 percent, and that translates into a significant return. If you want to calculate your potential return this holiday season, you can use this revenue recovery calculator.In the run up to Black Friday, record numbers of customers will abandon. These customers are telling you what products they are interested in. This is valuable data, and used in your remarketing emails, it will make them incredibly relevant—resulting in very high open rates. Many customers are using shopping carts as wish lists, particularly during the holiday season; so even if your remarketing email doesn’t trigger an immediate purchase, there’s a strong likelihood that the email will be kept in their inbox and opened several times to use the short-cut link back to their shopping cart wish list.

Hopefully this has given you some ideas about reducing shopping cart abandonment this holiday season. Let us know how you fare!

While the federal U.S. CAN-SPAM laws apply across all states in the U.S., in Europe it is more complicated. In the European Union, individual member countries are required to craft their own local country laws based on the Europe-wide legislation. As the different countries implemented their laws, each interpreted the requirements of the European Privacy Directive slightly differently. This makes implementing a pan-European campaign more complicated.

Given this confusing landscape and our mission to simplify remarketing for all, we hired Ruth Boardman of Bird and Bird LLP, one of the world’s top privacy lawyers, to work with us and produce a definitive answer to these questions. Working with her colleagues across the U.S. and Europe, we set out to see whether there is one compliance solution that can be applied to both the U.S. and European markets, or if not, which countries could be grouped together to simplify compliance with both CAN-SPAM and the European Privacy Directive.

Ruth and I collaborated on a joint whitepaper that sets out what you need to do to comply for email remarketing campaigns in the following countries: United States, France, UK, Italy, Germany, Belgium, Spain, Hungary, Sweden, Netherlands, Finland and other European countries.

Ruth has also kindly agreed to present the findings with me on an educational webcast taking place on October 12, 2010, at 11:00 a.m. Eastern time / 4:00 p.m. UK time / 5:00 p.m. Central European time. This will be a one-off opportunity to ask the experts your legal, compliance and remarketing questions in an interactive forum.

The webinar recording for this is now available on demand which you can play back by following this link: Email Remarketing and Compliance Webinar.

The accompanying White Paper can be found here: Email Remarketing and Compliance White Paper.

The poll also looked in detail at four key areas of conversion to determine their priorities. The four areas examined were as follows:

•    SEO
•    Landing page optimization
•    Email marketing
•    Web conversion/shopping cart recovery techniques

Each respondent was allowed to pick only one response in each category, forcing them to choose their top priority.

SEO Priorities

Which SEO technique would you prioritize in next 12 months

Marketers plan to focus on link building as their top priority in the next 12 months, with 42 percent stating that it is their top SEO focus. Changes to website pages to ensure they are more SEO friendly were the highest priority for 22 percent, while 21 percent plan to focus on social media integration. Site-based optimization (such as sitemaps and navigation) was the main focus for only 15 percent. There are two notable conclusions that you draw about these findings:

1)    Marketers have taken on board the changes made over recent months by Google to prioritize quality and diversity of links in search results over the content itself.

2)    Social media integration is unexpectedly high. While social media is hot for marketers, in SEO terms this is really cutting edge stuff, and it signals that marketers have recognized the importance of social media in driving traffic. In particular, Facebook’s social plugins, including the easy to implement ‘Like’ button, are beginning to be viewed as a simple ‘social SEO toolkit.’

Website and Landing Page Optimization

Which landing page optimization technique would you prioritize in next 12 months

Marketers are taking the ‘less is more’ philosophy to heart when it comes to landing page optimization. Just over half (51 percent) stated that reducing clutter was their top priority, recognizing that landing pages have been added to gradually over time at the expense of simplicity and simple, strong calls to action.

Twenty-eight percent of marketers plan to re-evaluate their text on the page with a view to increasing website conversion rates, while only seventeen percent are prioritizing removing fields from data capture forms. This is surprising as experts repeatedly emphasize the importance of having only the necessary fields on forms to increase online conversion rates.

Email Marketing Priorities

One third of email marketers plan to prioritize post purchase email marketing (such as reviews and satisfaction surveys); while another third plan to focus on pre-transactional email (e.g. abandonment remarketing including ‘browse-but-no-purchase’ and shopping cart abandonment) in the next 12 months. Twenty-two percent plan to focus on relationship building through email marketing, such as loyalty schemes and vouchers.

What’s notable from these findings is the rapid growth in transactional email, whether from a successful or an abandoned transaction. As integration between ecommerce systems and email engines has become much more pre-packaged—with the widespread availability of transactional interfaces for email—marketers are (finally) able to fulfill a long time desire to use website behavioral data to trigger targeted email marketing that is highly relevant and personal to the recipient.

Website Conversion / Shopping Cart Recovery Techniques

Which web conversion/ shopping cart recovery technique would you prioritize in the next 12 months

Organizations know that their hottest leads are with website visitors who have abandoned shopping carts, and 55 percent of marketers plan to make shopping cart recovery their top website conversion priority in the next 12 months. Marketers also recognize that price promotions are increasingly critical in the battle for online sales, particularly in the holiday season, and 19 percent intend to focus on onsite voucher pages where customers can view all active promotions. These pages are effective in driving conversions and also reduce affiliate fees to price comparison engines and promotion code websites.

A further 19 percent are prioritizing incentivized signups to capture email addresses and social network ID’s to enable the build of opt-in lists for email and social marketing.

These results, individually and collectively, illustrate the growing awareness among eMarketers that having a website in isolation is no longer sufficient. In order to achieve conversion rate optimization, organic SEO results—predominately through link building—have been proven to be more effective than PPC and sponsored links, which consumers have grown wary of. Many websites built a few years ago have been added to incrementally and now require simplification in order to ensure the calls to action are more prominent. Marketers also plan to use email marketing for more than batch-based, campaign-related emails; they intend to utilize this to build relationships with customers and potential purchasers. Finally, organizations have identified that they are losing a substantial percentage of leads as they have a high form and shopping cart abandonment rate. They are thus looking for online marketing tools that can help them recapture these hot leads through remarketing.

Transactional emails are automated and trigger-based, driven directly by user behavior, profile or demographics. Depending on how aggressively you adopt it, the extended scope might include transactional emails related to:

• Pre-transaction emails: browse abandonment and cart abandonment
• Purchase event emails: order confirmation, order status, shipping notice, shipping confirmation, trip preparation
• Post-purchase emails: satisfaction survey, review request, review notification, recommendation, replenishment, repurchase, upgrades
• Relationship emails: bounce back, account reminder, loyalty programs, account status, purchase anniversary

For example, a post-purchase email could notify customers of stock shortages, reminding a customer who bought an item in the past that you’re about to sell out of it. This kind of transactional email not only generates revenue but actually enhances the relationship with, and adds value for, that customer.

Another post-purchase email might 1) thank the customer for posting a product review and/or 2) include product recommendations based on previous purchases. While this level of sophistication might seem difficult to achieve, most ecommerce sites are already using the web analytics, reviews and recommendation engines needed to do these transactional emails. The sites simply need to leverage their existing technologies, using established APIs and dynamic content, to generate the new emails.

Purchase review emails can actually lead to significant incremental revenue. One Silverpop client reports that 14 percent of the people that click on the “review” link actually make another purchase. For that client, purchase reviews hold the second highest conversion rate next to their abandoned cart program. Follow-up, review notification transactional emails—thanking the customer for the review and offering a discount or other incentive on the next purchase—encourage 12 percent of the people who click on them to make another purchase.

When it comes to this new breed of transactional email, the keys to success include the following checklist of items:

1.   Leverage existing technology. As mentioned above, this technology already powers your website, so it can also be tied into these new transactional email opportunities.
2.    Time the emails appropriately. For instance, you might wait a month to email a review request to a book customer but only wait a week to send it to a toner cartridge customer.
3.    Design for all devices. In particular, make sure your emails work in a mobile environment, in preview panes, with image blocking on, etc.
4.    Create compelling content. Beyond making recommendations, superior content leverages customers’ non-purchase behavior, uses the right tone and makes compelling offers.
5.    Test, test, test. Test everything, from timing to layout to offers, copy style, and the level of personalization.

In any case, these automated, trigger-based transactional emails can supplement more traditional, broadcast email campaigns to increase online conversion rates and revenue, which is what we really care about.

If you’d like more information, you can view a 10 minute video of Loren’s presentation (by selecting View Silverpop presentation), or view a replay of the entire webinar (by selecting View entire presentation), under The Conversion Leaders Summit here.

Other insights are also available from myself on website conversion and shopping cart abandonment rates; Danny Dover, an SEO expert from SEOmoz.org; and Tim Ash, president and CEO of SiteTuners, a thought leader in website conversion and landing page optimization.

When you drill down on the S&S numbers in a bit more detail, you quickly find shopping cart recovery right at the top of the list: 80 percent of the revenue generated from transactional emails comes from their shopping cart recovery program.

So, it’s no surprise that the email service providers’ transactional application programming interfaces (APIs) are now being used for real-time shopping cart recovery emails.

This has the effect of turbocharging your email performance: Transactional emails sell. SeeWhy has found that typical open rates range from 50 to 70 percent for real-time email, and click-through rates can hit 50 percent. Compare this with a traditional batch campaign to your customer list where you might hope for a 30 percent open rate and a 25 percent click-through rate. The difference is attributable to the increased relevance that comes from getting the timing right. Your message with a real-time triggered email is directly relevant to what the website visitor was just doing on the website, whether a purchase or an abandonment.

Today, most large e-tailers don’t follow up on abandoned shopping carts. The e-tailing group’s e-tail 500 shopping cart abandonment study found that only 16 percent of the largest retailers follow up on abandoned shopping carts and that the average follow-up time is 6.1 days after the abandonment.

Research from MIT shows that timing in abandoned shopping cart recovery programs is critical; 90 percent of ecommerce leads go cold within one hour, so an average follow-up time of 6.1 days is totally sub-optimal. Email marketers know that relevance is key to maximizing email marketing performance and that the timing has to be immediate.

Bottom line: Many ecommerce websites already use an email service provider for batch-based email campaigns. Extending this relationship by sending timely shopping cart recovery emails is a simple and lucrative way to win back customers and increase online sales.

Footnote: We are always interested in featuring companies that have broken new ground. S&S Worldwide was an early adopter of the Silverpop Transact API, and built their own system for triggering follow up emails using Silverpop.

This is a great question, and it’s worth considering in more depth. Recent research shows that coupon redemption is at an all time high, and at the same time, Ben Bernanke warns that the economic recovery is fragile and taxes will inevitably have to rise. It’s no wonder that customers are nervous and cautious.

This is evidenced in a recent Forrester Research report that found that some 136 million people abandoned shopping carts in the U.S. last year, a full 88 percent of the online shopping population. The number one reason why people abandon shopping carts is price, specifically the cost of shipping and handling (44 percent), rapidly followed by ‘Not yet ready to buy’ (41 percent) and ‘Looking for a better deal’ (27 percent).

These numbers would suggest that many, but not all, customers are deal hungry—scouring the internet for the best price, free shipping offers and voucher codes.

So, it was with some interest that I read ExactTarget’s latest installment in their Subscribers, Friends and Followers series. Their most recent research paper, ‘The Social Profile,’ looks at the different online personalities and identifies 12 specific personas:

1.    Inner Circle: 47% of online consumers

Inner Circle consumers are interested in maintaining and deepening existing relationships with family and close friends, not necessarily developing new online relationships.

2.    Cautious: 33% of online consumers

Very selective about with whom they communicate and the types of information they’re willing to share online.

3.    Info Seeker: 33% of online consumers

Info Seekers go online to find and consume information. They aren’t interested in creating new content or in commenting on the experiences of others, though they do seek out others’ opinions.

4.   Enthusiast: 32% of online consumers

When Enthusiasts go online, they’re motivated by offline interests and hobbies.

5.    Deal Seeker: 30% of online consumers

Deal Seekers have a huge appetite for promotional content across all online channels. They see email, Facebook and Twitter as opportunities to obtain exclusive deals, freebies, discounts, coupons, and sale notifications.

6.    Shopper: 24% of online consumers

As their name suggests, Shoppers are most interested in the topic of shopping when they’re interacting online. But their interests aren’t limited to online transactions—they spend a lot of time researching and preparing for in-store shopping trips at their favorite local stores. In contrast to their Deal Seeker counterparts, Shoppers tend to be more focused on quality, as opposed to savings, though both are important to these consumers.

7.    News Junkie: 21% of online consumers

Consumers who are motivated by the quest for real-time breaking news and current events. News Junkies use the internet as either their primary source of information for news-related content or as a secondary source to supplement the information they get on cable news networks. These consumers are active social media contributors, especially when it comes to posting articles on sites, commenting on news stories, and submitting ratings and reviews to retailer websites.

8.   Gamer: 19% of online consumers

Gamers are motivated by the latest and greatest in gaming software, and can be split into two sub categories—Casual vs. Serious.

9.    Social Butterfly: 13% of online consumers

Making and maintaining a lot of online friendships is a Social Butterfly’s #1 priority. And to do so, they use a wide variety of social media tools. Social Butterflies use Facebook to maintain their social lives, and their Friends are personal contacts, not work colleagues. In addition to becoming Fans of brands on Facebook, these consumers are also interested in promotions and sale notifications across email, Facebook and Twitter.

10.   Business First: 8% of online consumers

Business First Consumers use the internet for business purposes, keeping up with the latest trends, communicating with business contacts, and making new connections through sites like LinkedIn. In short, they’re actively engaged in promoting their companies and personal careers online.

11.    Megaphone: 7% of online consumers

Megaphones want to connect, educate, and share resources and information online with others. These consumers clearly fall into the “influencer” category—meaning they can impact a brand’s bottom line—but Megaphones represent an especially elite group that takes their online interactions very seriously.

12.   Open Book: 6% of online consumers

Open Books are uninhibited consumers who freely express their likes, dislikes, experiences and opinions with the online world.

What’s interesting about these profiles is that only 30 percent are Deal Seekers. It’s very easy to forget that the deal-focused consumer is in fact a minority. The ExactTarget research also points at Shoppers (24 percent) and Social Butterflies (13 percent) as being interested in promotions, and connecting with brands by both social networks and by becoming email subscribers. But these consumers are not driven towards deal-seeking as their primary motivation online, rather they are focused on shopping research and the social aspects of shopping, respectively.

These online personas are interesting reminders to us to not treat website visitors as a homogeneous mass—it’s all too easy when we use language like Unique Visitors, Page Views and the like as part of our daily web analytics language.

Unfortunately, these types of online personas cannot easily be used to personalize our online marketing strategies but do contribute to our understanding of all the different types of online consumers.

This is echoed in some of the remarketing campaigns that our customers run (see Q&As with Rockler and Eat N’ Park). Some of the most successful abandoned shopping cart recovery email programs that SeeWhy powers—generating millions of dollars each year for the brands—do so with any form of promotion.