We attended the 2010 Online Retailer Conference today. Wow, what a crowd. This is the second year of the conference, and in just a year it’s apparent that more and more bricks-and-mortar stores are moving towards online retail in their multi-channeling efforts. But my sense of the crowd today is that we just have a whole bunch of new online stores popping up all over the place and they all want to know how to do e-commerce the right way!
Today’s conference tracks were ‘Web Marketing and Customer Acquisition’, ‘Small E-Retailers’ (of which there seemed to be a ton of in attendance!), and ‘E-commerce Insights & Solutions’. There was an interesting mix of speakers and forums, but at the end of the day, a key message from that almost all sessions I attended was “Know your customer database, and segment your email marketing to suit your customers”. It was a bit like groundhog day going from session to session to be honest!
The key takeaway here is that whether you have a customer database of 2,000 or 2 million, don’t just sit on your data and use the same marketing techniques to sell to them all. Which ones are using social media?Which ones are interested in which types of products? What types of communications do they respond to? If you’re doing email marketing and your click-through and conversion rates are low, perhaps you’re not sending the right messages to the right people.
One excellent example given today was that of a cosmetics company. They were doing email marketing and sending the same message out to all customers in their database each time. For their efforts, they were converting about 10% of recipients. Not bad. Then they looked at their customers more closely and quickly realised that about 10% of those customers were really really excited when they brought out new colours. So they created a specific segment and marketed specifically to that group each time new colours were released. The result? A HUGE increase in conversions! So they started to get to know the other customers and what they liked and segmented them out accordingly in the same fashion. In the end, instead of focusing on the one message to all customers and trying to lift the conversion rate by a few percent, they were able to segment their customers into groups and increase their overall conversion by 4 or 5 times.
Worth spending the time and effort getting to know your customers I think, don’t you?