Birkenstock considers its audience to be very loyal, where one in five are repeat customers. To avoid losing loyal customers, communication is personalized. For Birkenstock, this means getting to know their customers’ needs and desires to offer the right products in mailings. With regards to this, the company identified and corrected a bottleneck in their sales plan. The company used CJM and test mailings to shape the […]
Marketing automation at Birkenstock: changed company organizational structure, found and fixed sales funnel bottleneck, increased sales
GoalIncrease online store revenue
SolutionsLaunch tailor-made trigger scenarios and bulk campaigns
Use machine learning algorithms in mailings
Results940% — ROI of marketing automation
An amount of 940% ROI from marketing automation
7.46% — the average share of email channel revenue in the company’s revenue
An amount of 7.46% on the average profits of email channel income
ParticipatedCEO and CRM marketing manager of Brandpool East and the manager of Mindbox
ITOpenCart website and Mindbox marketing automation platform
Business Scale3 retail stores in Moscow and an online store
Birkenstock is one of the world’s largest shoe brands. The company was founded in Germany in 1774. A prominent feature of the shoe is its orthopedic insole, which was developed in 1896. Brandpool East represents the brand within Russia
Alexander Lezgin, CRM marketing manager of Brandpool East
Birkenstock considers its audience to be very loyal, where one in five are repeat customers. To avoid losing loyal customers, communication is personalized. For Birkenstock, this means getting to know their customers’ needs and desires to offer the right products in mailings. With regards to this, the company identified and corrected a bottleneck in their sales plan. The company used CJM and test mailings to shape the company’s structure, and together with different departments, they were able to develop an online store.
Using personalized recommendations in mailings reduces the chance for losing customers due to seasonal demand. This means that the company sells more shoes through a multi-trigger plan which increases the click rate while reducing the unsubscribers.
This outcome is due to an algorithm that predetermines the number and frequency of mailings per customer. It also allows the company to learn more about the needs of their customers and increase the size of their customer base through pop-up windows on the website.
To calculate the ROI, we took the revenue from email orders and web pushes starting from November 2020 to July 2021, when the company actively began sending mailings. The company holds a conditional margin of 20%, using the last-click attribution method. At Birkenstock’s request, exact figures have not been disclosed.
The ROI using Mindbox is 940%; every $1 invested in the platform returns $9.4.
The drop in September 2020 was due to the fact that the email channel was still in its early stages of development. This means that the frequency of mass mailings was being adjusted, and the customer base was growing.
The decline in February through May, 2021 was when the OMS (order management system) was still being connected, so some orders had not yet been encompassed within Mindbox’s projects. In February, changes were being made in which Birkenstock reduced the frequency of its mass mailings. Now the frequency of its mailings is controlled by an algorithm, which helps to avoid any further sudden drops in revenue.
In contrast, the October to December 2020 surge was related to seasonal promotions. For example, Black Friday brought in more than 5% of all orders in just 3 days. Meanwhile, the New Year’s promotion went on to bring in 2% of all orders in November and December.
Before 2019, Birkenstock’s marketing had focused on retail stores and working with marketplaces, such as Lamoda and Wildberries. In 2019, Birkenstock began developing its online store. They started with the CDP connection because the existing mailing list service did not allow them to work with their customer base well. CDP connection involved segmenting customers, sending out personalized mailings, and increasing the number of subscribers. Birkenstock’s founder, COO, and web project manager together chose the platform.
In 2020, we opened Birkenstock’s e-commerce branch in Russia. Developing our customer base is a priority for both our partners and Brandpool East. This meant we needed a quality tool to manage and further automate our marketing communication. At an industry exhibition, we learned about Mindbox and previewed their portfolio of similar solutions.
We are an international company and, therefore, assess our Western counterparts using several indicators:
- Successful cases in the fashion industry;
- Launching targeted communication;
- CDP features;
- Simple integration.
To us, simple integration is an essential aspect. We realized that Mindbox had the right solutions and resources to perform an integration faster than any other platform.
From the list of indicators, our Western counterparts did not show any significant advantage to Mindbox.
A year later, based on our email channel growth results, we were convinced of the immense value Mindbox would bring to our other projects.
3. Mindbox hypothesized that a new sizing guide would help customers to decisively choose a size, removing the primary obstacle to a customer completing a purchase at checkout.
4. The Mindbox team tested the hypothesis by launching a new guide for the welcome chain and abandoned cart. The team also added a survey to each email to see if a customer had ordered the size they needed.
We try to determine a customer’s problems and test specific hypotheses. PopMechanic and Mindbox help with these tasks. Through this experience we have become more flexible in terms of hypothesis testing.
We have noticed that the new size guide works better, where 95% of the welcome-chain and abandoned cart survey participants now select the correct size. Since then, there have been no additional calls to the call center requesting help with determining shoe size.
So, we will now use the new shoe size guide on the website as well.
Brandpool East used to have a strict division between departments. The product manager, customer care, and digital advertising departments had no overlaps that would allow them to develop the online store together. There was also an absence of a CRM department.
However, the introduction of a CDP transformed the structure of the company. So now, there is a CRM department and all departments share a unified system in which they can develop Birkenstock together.
How our departments work now:
- The CRM department receives information about customer needs from the call center as part of its customer care service.
- The digital advertising department finds creative solutions based on the CRM department’s information about customers. One operational example would be when the CRM department canvassed the website, and as it turned out, they discovered that customers who buy summer shoes do not know about Birkenstock’s fall fashions. This information inspired ideas for creating targeting ads on Facebook. As a result, these ads now include fall shoe fashions.
- The sales manager uses customer information that the CRM department finds and verifies in promotional mailings. This process explains how the CRM department discovered that customers most often do not complete an order because they can’t decide on a shoe size. This was then tested in mailings and a new sizing guide was launched. As a result, the conversion rate of abandoned carts to orders increased and the new guide is scheduled to be posted on the website.
Summer is the primary season for buying Birkenstocks. Demand for popular models is high, and they are quickly sold out. To avoid losing customers who did not have time to buy the right pair, Birkenstock offers similar models through personal recommendations. They are generated automatically based on the models and sizes the customer has viewed on the website and on what other customers with a similar profile have bought.
All mailings with the A/B-test personal recommendation algorithm show better results than mailings without it. For example, in July, a recommendation after a discount subscription ranks fourth amongst all triggers in the number of attributed conversions (BI data).
That is why recommendations are now being used in almost all of our tailor-made trigger scenarios. This includes the welcome chain, waiting list, and abandoned cart.
Results from the waiting list mailing with personal recommendations:
|Open rate||Click rate||Conversion rate|
Brandpool East utilizes a number of tailor-made trigger scenarios. This means that many events can take place within a single trigger program. Focus was first placed on customer abandoned carts. Random testing of two variants was then carried out, using the A/B testing method:
Hypothesis. A series of four emails will bring more order conversions than a single email.
Test. One section of the audience received one mail, while the other section received a series of four emails.
Result. The average multi-trigger conversion was 5.8% with a 95% confidence level. At the same time, one abandoned basket email resulted in a conversion of 2.1%.
Multi-step abandoned cart workflow:
The first multi-step email workflow had a conversion ratio of 3.7% versus 2.1% from the single email. This is probably due to the change in email design. The next three emails within the sequence gave an additional conversion increase.
A distinctive feature of Mindbox is the ability to flexibly configure CDP-based trigger communication and segmentation.
The application of Mindbox as a key solution to the challenges of modern-day marketing communication is so broad that I think some challenges, including product features, are still on the cusp of being converted to their full potential.
A comfortable frequency of mailings is automatically selected for each subscriber. If a subscriber is interested, opens their emails, visits the website through emails and other channels, places orders, etc., then the frequency of mailings is maintained or smoothly increases. If their interest decreases, then the mailings frequency respectively decreases. Customer attitude towards our mailings is then that of interesting, helpful information rather than regarding them as spam. It also means that they click on the email links to the website more often and in turn unsubscribe less often. Average results by mailing list, Mindbox data:
|Without the algorithm, from July 2020 to April 15, 2021||1%||6.9%|
|With the algorithm, from April 15 to July 8, 2021||0.9%||9.7%|
Website visitors were asked four questions: Why did you choose Birkenstock shoes? For whom do you choose them — men, women, or children? What shoe qualities are important to you? Have you purchased Birkenstocks before?
According to Birkenstock survey results, style and health are important selection factors for 70% of their customers. This confirms the brand’s core strategy, which states that Birkenstocks are not just orthopedic shoes, but, as customers prefer, they are also stylish and good for your feet.
Another survey showed that customers often choose Birkenstocks as a gift, while 20% of customers choose Birkenstocks for sporting activities. This knowledge is helpful to us. For example, when I draft a mailing text’s terms of reference for a copywriter, I always attach specific survey results for reference. This makes mass mailings more targeted and specific. It means that you can send them to specific segments, depending on subscribers’ responses to the survey.
For us, PopMechanic’s pop-up windows present a flexible solution. They allow us to quickly develop the feedback format we need, and likewise get rapid feedback from customers. We ask our customers feedback questions such as whether ordering is convenient, why they abandon their carts without ordering, and what information about our shoes should be added. For us, the entire experience is extremely convenient and useful.
The main advantage of PopMechanic is that it is integrated with Google Optimize. This allows us to quickly run A/B tests.
This is how we tested the most opportune time for a pop-up window with a subscription request form to appear. This example is particularly interesting because just one small improvement — one adjustment in PopMechanic — can result in a significant increase in conversion.
We determined the best time to show a pop-up window with a subscription form and increased the transaction rate, meaning the number of purchases:
Hypothesis. If we show a pop-up window to visitors after 30 seconds, instead of 15 seconds, the number of conversions will increase.
Test. Two audience groups, each viewing one of the two possible pop-up windows.
Result. The pop-up window that appeared on the website after 30 seconds won with 100% certainty. The transaction rate was 3.07% versus the 15-second variant’s rate of 2.21%.
Using these results, we increased the conversion rate of the pop-up window with the subscription form. We then launched a pop-up window with a subscription form without a coupon, and likewise a pop-up with a coupon. Birkenstock’s results showed that without a coupon the conversion rate was 1.5-2%, while with a coupon the conversion rate reached 6%.
Still, we did not stop there as we decided to test yet another hypothesis:
Hypothesis. If website visitors don’t have to enter their email contact in exchange for a coupon, they would be more likely to place orders.
Test. One audience group sees a pop-up window with a coupon and doesn’t have to enter their email address, while a second group sees a pop-up with a subscription form, requiring them to enter their email address in exchange for a coupon.
Result. With a 95% confidence level, no significant difference was found. That is, website visitors willingly leave their email, which means customers trust Birkenstock.
1. Introduce a predictive scoring method of customer turnover. This will help us to identify when customers leave, as well as provide an understanding of how we can retain that type of customer’s interest. To do this, we have already implemented the Google BigQuery database platform and plan to integrate it with Mindbox.
2. Add personal recommendations to the website’s catalog and product card.
3. Help customers better adapt to their shoes. Surveys have shown that many customers find it difficult to get used to their first pair of Birkenstocks because of the orthopedic features on the insole. To avoid leaving customers feeling uncomfortable and unsure, Birkenstock is preparing informational materials that will explain to customers how to quickly get used to the insole and properly break in their shoes.
I want to personally thank Mindbox manager Irina Alieva for her prompt involvement in integration and new campaign configuration, her openness to new things, and her willingness to discuss challenges and share positive experiences. I would also like to thank the Mindbox support team whose service is 10 out of 10, working even on holidays and in the evenings.
I hope that our case study will be useful for different businesses to effectively employ Mindbox and their talented team.