Understanding the psychology of “consumer behavior” is a tricky thing. As marketers, we’re challenged by this time and again. However even though we’re acting as marketers now, we’ve all experienced being a customer first-hand, too.
This experience is what’s prompting more retailers to focus on improving their customer retention rates through their customer experience. A brand’s customer experience could be the difference between a customer returning or not, and this decision has a huge impact on a company’s revenue. New customers are only between 5% and 20% likely to complete a transaction while a repeat customer’s conversion rate is closer to 70%. These figures make it clear that building relationships with existing customers is essential!
In order to build relationships you need to understand your customers, and to truly understand your customers you first need to understand their behavioral pattern. This is only possible by collecting user activity data and personalizing your marketing efforts based on that data.
Getting Started with Behavioral Email Marketing
Improving customer experience has long been a preoccupation for businesses in any industry. This is due to many factors, one of the most significant being the idea of a negativity bias. Customers place up to two times more value on negative experiences than positive ones, leaving your brand open to developing a poor reputation if customers aren’t satisfied with the experiences you’re delivering.
This is where behavioral email marketing comes into play! These marketing messages are the perfect way to solidify and expand upon your pre-existing customer experience, and I’ll tell you why.
1. Nurture Customer Relationships
First and foremost, behavioral email marketing allow you to nurture your existing customers. Many companies make the mistake of ignoring who they already have as customers and focus all of their energy on getting new ones. This strategy is like filling a broken pot with water only to realize that you’re losing water on the way.
Nurturing existing leads through impactful customer relationships will make your pot stronger and even mend the cracks. It will also help you understand what makes your customers happy and what doesn’t. Post purchase emails, cart abandonment emails, and transactional emails are only a couple of the types of behavioral emails that will help you build solid foundations with your current customers.
2. Encourage Customers to Buy Again
Once a customer has decided to make a purchase from you, there’s a pretty good chance that the decision was influenced by a good customer experience. This positive experience is what will encourage them to return and make more purchases in the future. In fact, It’s so impactful that customer experience is expected to overtake price and product as the key brand differentiator by 2020.
Letting customers know about your brand’s latest offers and upcoming events will continue this positive experience after the initial purchase. You can also use behavioral email marketing to find out what made them convert in the first place. By asking customers whether it was your offer, timing, or something else entirely, you get a better glimpse into each customer’s preferences and behavioral patterns.
3. Identify Customer Groups
Segmenting your customers according to gender, cart abandonment patterns, age, etc. can help you get a better sense of who’s engaging with your brand, and how. These results are dramatically improved when you use personalized content.
74% of marketers say targeted personalization increases customer engagement, and this engagement can directly help boost sales and revenue. With the behavioral data this personalization brings, it becomes easier to target specific customers groups with offers and promotions that will enhance their customer experience and improve their opinion of your brand.
How to Design the Perfect Behavioral Email Marketing Campaign
Behavioral emails give you the opportunity to send automated, targeted emails to the contacts in your database based on their interactions with your company across multiple channels. Over 75% of email revenue is generated by triggered campaigns as opposed to one-size-fits-all campaigns. Moreover, automated email campaigns now account for 21% of email marketing revenue.
So what types of emails can you include in your campaign?
1. 4×4 Re-Engagement Emails
Re-engagement emails are a great way to re-ignite the interest of inactive customers. Sending offers and discounts along with enticing deals work really well for this. The “4×4 Re-engagement Rule” applies to any customer who’s been active with your brand 4 times consecutively over a period of 4 weeks but hasn’t been active since. The email you send as part of this campaign will ultimately gives these customers the reason that they must return to the brand.
“We Miss you” or “Come Back” emails are a huge part of this, and brands like Loft make heavy use of these. As you can see, Loft makes sure to emphasise the fact that the customer was “missed” since they haven’t made a purchase recently. They’ve even sweetened the deal by providing a discount code, giving the customer one more reason to come back. These elements are what ultimately lead customers back towards conversion, re-engaging them with your customer experience and the rest of your brand.
2. Post Purchase Follow Up Email
Once a customer has completed a purchase, why not ask them how they enjoyed the experience? Sending an email inviting shoppers to give feedback about your product/service makes the customer feel valued. This also helps improve your services as this feedback can give you a better idea of what customers need from your brand experience.
This email from Marks & Spencer is a great example of how to actively elicit feedback from your customers. By explaining why they’re looking for feedback, shoppers are able to take ownership of their customer experience and enhance it through positive (or negative) communication. These types of emails are also simply a great way to touch base with customers, since it also indicates that you care enough to know what they like and what they want to see change for future transactions.
3. Cart Abandonment Email
Abandoned cart rates today have reached an all-time high of 81%. So how do you combat these increasing rates? Remind your customers to finish what they’ve started! With so much information available at their fingertips, sometimes shoppers simply get distracted, and sending cart abandonment emails can bring back these would-have-been customers. Understanding why the cart was abandoned can help you target your customers better.
Mr. Porter’s cart abandonment emails give customers the product description and image along with reasons that they should be shopping at Mr. Porter. This compels the customer to return to the store, finish loading up their shopping cart, and complete the purchase.
Mr. Porter also sweetens the deal by including a “latest arrivals” section. These considerations create more opportunities to upsell and cross-sell products to shoppers, increasing the chances of securing a conversion. With this much value packed into one email, it’ll be hard for customers to resist the urge to click “Purchase”.
4. Birthday, Anniversary, and Thank You Emails
We’ve often been told that the customer is king, so then why not treat them like one? Many customers are motivated by a sense of vanity, and appreciate being acknowledged for what sets them apart from other shoppers. Sending birthday or anniversary wishes as part of your behavioral email marketing campaign can make your customers feel like royalty, and is a highly effective way to build a lasting bond.
Caribou Coffee recognizes each of their customers’ birthdays with a special reward just for them. While it might seem like a small gesture, it can go a long way to connect with shoppers and make them feel welcomed and remembered. Never underestimate the power of a simple “thinking of you” email!
5. Incentive Emails
This probably seems like the most obvious behavioral email, but it should never be discounted (pun intended). Sending your subscribers an additional incentive or reward to shop with you is never a bad idea because it reminds them of the value of both your products and brand. This type of behavioral email marketing is most effective with a rewards program, but can also be used to acknowledge newsletter subscribers or new customers.
Take Madewell for example. In this email, they’re giving a recent subscriber an additional 40% off, just for signing up! This not only reaffirms the customer’s decision to subscribe, but also reminds them of the value of shopping with Madewell. It’s bold, simple, and direct, with a clear ‘shop now’ CTA directing the subscriber towards the destination. This style of behavioral email is very effective and always a benefit to have in your marketing wheelhouse.
6. Lifecycle Emails
Lifecycle emails are designed specifically to maintain brand visibility throughout every step of the customer journey. No matter which level of the sales funnel a customer falls into, these behavioral emails give you the chance to connect with and better understand each of your customers on an individual basis.
Office has designed a fantastic example of an effective lifecycle email. By asking a simple yet pointed question about the customer’s preferences, Office is able to indicate that they want to get to know the customer better in order to better serve their needs. This not only makes the customer feel recognized and appreciated, but also provides Office with valuable customer data that will allow them to properly segment their customer base in order to send only relevant materials to each shopper.
No matter how you choose to action lifecycle emails, they are by far one of the best and most effective behavioral email marketing strategies for both you and the customer: you get data that can be turned into more effective marketing campaigns, and the customer is treated to a personalized experience they can’t get anywhere else. It’s a win-win!
Overcoming Inactivity with Behavioral Emails
No matter how outstanding your brand experience is, you always run the risk of customers becoming disengaged. With so many different brands on the market, it’s easy for customers to get distracted and slide into a period of inactivity.
But while disengagement might feel like a tough battle to overcome, it can actually be surprisingly easy with the help of your retention marketing strategy. Using timely, well-designed behavioral email marketing will give you the chance to identify and bring customers back, keeping them (and your business) happy and satisfied.