A great time to assess and tweak your conversion strategies is during Q3 – your last chance for optimization before the Q4 holiday rush dominates your day-to-day existence for the rest of the year. Brands know they have to increase engagement and conversions if they want to maximize their revenue opportunities in the coming holidays, and they have to do that while also providing a better shopping experience for their customers across the channels and devices they prefer.
To see how consistently our marketing strategies perform, we have certain metrics we watch on a weekly or monthly basis, but the metrics can blind us to the big picture view, especially in terms of customer retention. In these cases, it’s really important to look at your core KPIs over a longer period of time to see where you have opportunities. You can also identify areas which have stagnated and need a little love.
Our research here at Emarsys now covers just under 3 billion customer records and billions of transactions across varied business models and service industries. This vast wealth of data allows us to discover patterns that we hope can impact your marketing approach.
This month’s benchmark report will focus on a great personalization and conversion tool: Product Recommendations – and what they can allow you to do in terms of engagement.
The Upsides and Downsides of Consistency
When reviewing the first half of 2018, what’s really interesting when looking at Emarsys’ web conversion rate (which tracks conversions across website, mobile website, and mobile apps) is the consistency:
Email trends reveal a notable level of consistency in results over time. Some of the metric results over the last 12 months paint a consistent picture in email open and click-through rates, and with reliable results, you can begin to think confidently about predictability.
Many, many brands focus on increasing their traffic, finding new customers, and then MAINTAINING results over time. But predictability can breed complacency, and you can easily miss new trends as they develop, giving the advantage to your competitors who are monitoring changes in the marketplace.
Long-Term Growth Over Short-Term KPIs
While KPIs are one of the main ways we measure the performance of our e-commerce strategy, they are only one part of the puzzle. To really see if your strategy is working, look at customer retention rate.
Why not look at your results over time instead of only focusing on current traffic, repeat visits, and revenue growth? When we add up our open, click-through, conversion, and re-purchase rates over time, we can identify a trend, turn it into an opportunity and really move the needle.
Consistent performance is not the key trend to monitor. Consistency alone gives the impression that there’s no movement whatsoever, and that may be inaccurate. However, even though we see huge amounts of “stability” in the data, we see our clients continuing to move up and down between the average groups and the top-performing quarter of our clients. By applying automation and personalization to their email, cross-channel, website and mobile optimization, these brands are the best at driving up performance.
But automation and personalization also allow our clients to raise the bar on what stability can produce.
Web Conversions: What’s Good, Bad, and Excellent
Clients utilizing customer identification, personalization, and recommendation tools have a median conversion rate of 7.6% within the e-commerce industry.
But the average conversion rate for our top-performing clients (the average result of the top 25% excluding outliers) is a massive 14.7%.
There could be many reasons for this, but the big takeaway is that with a few tweaks to your site and mobile apps, you can greatly increase conversions. Consider that Emarsys clients running e-commerce websites and mobile apps with minimal responsive design, no product recommendations, and a lack of behavioral targeting on-site have an average conversion rate of 3.8%.
But when you add a Recommendations tool to your mix, things can change dramatically. Think about this: The median conversion rate for our clients using Web Recommendations on the web, mobile web, and mobile app is 7.6% compared to the industry average of 2%–3% in e-commerce.
This means that for a business with 100,000 visitors per month and an average order value of $100, the difference is staggering:
100,000 X $100 X 0.030 = $300,000
100,000 X $100 X 0.076 = $760,000
Over the course of a year, the resulting revenue difference would be $9.12M versus $3.6M.
Optimizing your web and mobile channel conversion rates could literally more than double the size of your business if you’re in the top 25%.
One of the best ways to know how well your recommendations are resonating with customers is to look at specific campaigns that use them. While a customer adding an item to her cart does not result in an actual conversion yet, the add-to-cart rate can tell you what shoppers are reacting to when they visit your website or mobile website.
The median result in e-commerce is that 23.8% of visitors have put some product you showed them into their cart – this means there’s a huge opportunity in the product discovery phase to help shoppers find the right product. The next step is to then recommend products that complement the original item the customer added to her cart. This is the best way you can maximize the value of a transaction and push up average order values.
As a median rate, 65.6% of shopping carts are abandoned. However, that rate drops to 46% for those clients who have optimized their campaigns across email, SMS, display ads, and the call center. That means the top 25% of our customers are 20% better than the median average and 34% better than the bottom 25% in recovering lost revenue opportunities.
Recent @Emarsys customer #data shows that #cartabandonment rate drops nearly 20% for brands that optimize campaigns across #email, #sms, display ads & the call center CLICK TO TWEET
Along with sending an email to customers to remind them that they left items in their cart, Recommendations can be a powerful way to either up the order value or improve the customer experience in such a personalized way that customers will remember and come back for more.
Accurate Recommendations Help Retain Customers
Recommendations, especially when they are targeted at individual customers, build a great amount of trust and provide an outstanding brand experience for the customer. You can really start to see this snowball into a healthy positive relationship between a brand and its customers, best shown by looking at customer retention over a longer period of time.
Tracked across the thousands of accounts that use the Emarsys platform, the median result is that a little under half (47.9%) of all website visitors are repeat visitors rather than first-time visitors. This growing engagement over time, built by connecting journeys across sessions and devices, is key to e-commerce success – recommendations make it easy to pick up where you left off (due to features that show recently viewed items or personal recommendation widget types) as well as new innovations like customer discovery (which serves up a personalized experience for each customer) that will further drive engagement, conversions, and CLTV.
Our magic formula:
► (Increased visits) x (increased conversion rates) = increased revenue
► (Increased repeat visits) x (increased conversion rates) = increased customer lifetime value (revenue over time)
Connect customer journeys across sessions & devices w/ #recommendations to make product discovery easy (plus get the @Emarsys formula for increasing revenue and #CLV) CLICK TO TWEET
Personalization is what customers want, and as you finalize your Q4 holiday strategies, think about the places your customer interacts with your brand and the technology solutions, like a recommendations tool, that will help personalize the experience and keep your brand at the top of the customer’s mind throughout the holidays.
In a highly competitive market, every little adjustment that streamlines your process or personalizes a high-quality customer experience will drive up your conversions.
Handpicked Related Resources:
- Product Recommendation Examples and Best Practices
- Preventing Defecting Customers: A Revenue Recovery Strategy
- How to Use Omnichannel Marketing to Improve the Customer Journey
- Personalization 101: Using the Machine to Build Engagement and Influence Purchase [Webinar]
Alex Timlin is VP of Client Success at Emarsys where he leads the Client Success organization to drive adoption and growth across 2,000+ clients in more than 100 countries. Alex is a long time member of the Direct Marketing Association’s Customer Engagement Council, Marketing Intelligence Hub, and is a regular industry speaker on marketing, customer success and SaaS technology.