Profit Killers – 2
There are 5 key interventions which can help brands convert profit killing moments into profit creators.
Addressing Dormant Users: The 60-70% dormant users in the brand’s email list represent significant potential for reactivation. These are customers who have previously engaged with the brand but haven’t opened emails in many months. Often, brands try to reacquire these customers through costly adtech platforms, but could reactivation via email be a more cost-effective solution? By identifying why these users became dormant (by tracking their cohort-level activity across the Internet) and tailoring email marketing strategy accordingly, brands could reactivate a substantial portion of these users and realise substantial savings.
Engaging Non-Openers: With as many as 90% of users not opening emails, there’s a massive opportunity to increase engagement rate. What strategies could entice these users to open emails from the brand? Doubling the 10% open rate could lead to a proportionate increase in transactions. Consider the use of gamification in the email Subject through Atomic Rewards (Mu) to pique interest and drive engagement.
Incentivising Non-Clickers: The percentage of non-clickers in emails is similarly high, hovering around 90% for most brands. What would motivate these users to click through? This is where innovative solutions like inbox commerce via AMP-powered email shops could revolutionise the clickthrough rate. By providing a direct, seamless path to create a cart and where possible purchase within the email itself, brands can significantly increase their conversion rate.
Improving Website and App Engagement: On the brand’s eCommerce website and app, better search results and personalised product recommendations could encourage more users to add items to their cart. Considering that only a third of those who view products add something to their cart, improving this figure could substantially increase sales. Brands should invest in AI-ML solutions to refine your search capabilities and create hyper-personalised recommendations for each user.
Reducing Cart Abandonment: High cart abandonment rates, often around 60-70%, are a major obstacle for many eCommerce brands. Can the use of AMP emails fast-track transactions and reduce these abandonment rates? By including tailored recommendations based on browsing and interest history, or triggering emails based on merchandising events like new arrivals, price drops, back in stock and category affinity, brands could motivate more users to complete their transactions.
Every stage of the customer journey offers opportunities for optimisation. Any missed action can act as a profit killer, forcing eCommerce brands to invest heavily in new acquisitions when they already have existing customers ripe for re-engagement. Brands could be spending up to a quarter of their gross margin on marketing. Additionally, by creating differentiated experiences for their most loyal and profitable customers (Velvet Rope Marketing) and leveraging referrals more effectively, eCommerce companies can significantly reduce marketing spend and increase customer loyalty.
Most of these are themes I have covered in my marketing essays over the past three years.
So, how do we solve some of these problems and transform eCommerce P&Ls? This is where the PxL methodology can be applied to boost brand profitability.
