ICOVER: gross profit growth as a measure of email marketing success

Email, the primary marketing channel at ICOVER, was previously handled using SendSay. After switching to Mindbox and carrying out proper customer segmentation, ICOVER saw a 2.7-fold growth in email revenue accompanied by a 300% increase in gross profit.

The brief

In the year prior to implementing Mindbox, ICOVER had been employing a number of manual procedures to increase sales via email. Selecting priority items and categories for inclusion in email campaigns was proving effective, and promotions were planned two to three months in advance. They also used a selection of triggered and transactional emails typical for online retail.

This strategy increased order intake by 137% and gross profit by 164%, but it soon ran into problems:

1. The marketing department wasn’t able to produce manual campaigns fast enough.
2. With no behaviour or purchase history, there was no way to properly segment their customer base.
3. The large number of promotions led to conflicts in their discount system. Discounts and bonuses were not mutually exclusive, and one and the same item could participate in multiple promotions.
4. Category managers were overwhelmed. They didn’t have time to properly discuss and plan new promotions.

Expectations from Mindbox

1. 10 to 30% month-on-month growth in order intake.
2. Increased subscriber reach and increased proportion of active customers.
3. Ability to send more emails on account of segmentation and campaign automation.
4. Customer data storage & use in generating hypotheses to drive sales growth.

The brief for Mindbox

1. Increase share of email in overall online revenue.
2. Increase customer retention.

ICOVER initially ran its main communications manually in order to test various hypotheses regarding segmentation based on online behaviour, such as purchase history and category views. Later they began sending thematically targeted campaigns.

In time we identified our main segments and set most of the routine campaigns to run automatically.

Triggered campaigns now figure in 55% of all orders.

We launched the first automated campaigns in June. Over the following six months we segmented our customers and launched new automated feeds. This led to a 2.7-fold increase in revenue from email, bringing it up from 4% of overall revenue to 11%.

These results were verified by a control group that was maintained from May through August.

Segmentation

The old system had a major drawback in that it didn’t store information about customers’ on-site activity. With Mindbox we no longer have this problem; all customer activity is now recorded. We can access that data to create behavioural segments for use in manual and automated campaigns.

We have two broad segmentation types – by product and by customer. In all we now have 125 segments set up, some of which are quite interesting:

1. Inactive customers who have not visited our online store in the last 90 days. We send them an automated email with a discount to encourage them to come back and make a purchase.
2. Customers who unsubscribed from emails. We use this segment to gauge the quality of our campaigns. If customers start unsubscribing, we know that we need to make changes, for example in content or sending frequency.
3. Segments for customers who bought a specific item. For example, if a customer buys a pair of AirPods headphones, they land in a dedicated segment for that item. This lets us send those customers targeted emails with other iPhone accessories.
4. Customer interests. We keep track of item categories that customers have viewed. If they view a category without putting anything in their cart, we can send them an email with recommended items from that category. Recommendations are generated based on what other customers have viewed, with the most viewed items being included in the email.

Segmentation lets us generate personal recommendations for customers.

If a customer shows interest in a particular category of items, they will receive emails with product recommendations from that category.

Triggered campaigns

We’re making full use of our new-found capability to personalise offers.

Welcome emails

Post-registration welcome emails help customers learn more about us, and help us learn more about them so we can personalise the offers they receive.

To learn more about their customers, ICOVER offers redeemable bonuses as a reward for filling out their personal profile.

Transactional emails

There are two ways to personalise email content: we can include special offers based on purchase history; and personal recommendations generated by machine learning algorithms.

When generating an order confirmation email, the system checks whether the customer has made purchases from specified product segments. If not, the email will be generated with a generic section containing information about the purchased item and a discount for further orders.

Personal recommendations are based on customers’ on-site behaviour history.

Price reductions

The system keeps a record of all customer activity, so if the price goes down on an item that we know a customer is interested in, we can send an email notifying the customer of the price change.

Plans for further personalisation

• Triggered campaigns for bonus programme to encourage existing customers to make their future purchases exclusively from ICOVER, thus increasing the percentage of returning, loyal customers. Customers will be awarded bonuses when they make a purchase, and these bonuses can be redeemed against part of the cost of future purchases.
• Enhance customer profiles with offline purchase data from our two high-street stores in Moscow. This will give us a better understanding of these customers’ interests and preferences and a clearer picture of what items and promotions to include in communication with them.