Lessons learned: When to Make a Holiday Promotional Offer

At holiday time, many online ecommerce sites rely on promotions as a central part of their seasonal marketing strategy. While inherently tactical, they have been demonstrated to be particularly effective where consumers are more cautious. Clearly promotions are going to feature big this holiday season.
 
One of the areas where the cautious buyer is most visible is when they abandon the shopping cart online.
 
Done well, promotions can be a very effective kicker here to convert abandoners into buyers. There are several independent studies which have measured the effect, for example the Marketing Experiments team commented:
 
 
"Utilizing an incentive to recapture abandoned carts has proven to be one of the simplest and most cost-effective email marketing techniques that we have tested."
 
But last holiday season some of the largest retailers learned the hard way that promotion codes in shopping cart abandonment remarketing emails can backfire.
 
So before you leap to roll out a ‘Free Shipping’ remarketing campaign this holiday season, give pause to the lessons learned last season. We learned that if not done right, promotional offers can actually increase your shopping cart abandonment rate. If it’s too automatic, then you can train your customer to expect an offer. So rather than increasing your conversion rate through effective remarketing, your abandonment rate increases slightly, and your margins decrease.
 
This particularly impacts this ecommerce sites where there are lots of repeat purchases.
Best practice email remarketing is to follow up immediately, within a few minutes, with a service communication.
 
You can summarize best practice as ‘Tone and Timing.’ Following up with an overt sales message can be counterproductive and result in higher level of unsubscribes.
 
Following up too late, say 24 hours after the abandonment, with a promotional offer will cause a host of issues:
 

• Low relevance to the visitor - the potential purchase is no longer ‘front of mind,’ so your email is no longer relevant.

• Getting out of step with the visitor - the visitor has made an alternate purchase from one of your competitors, so your email is totally irrelevant and may be regarded as spam. 

• Customer service issues - the visitor may have already come back onto your site and purchased anyway at the full price, so you email will lead to anger and damage to your brand.

 
The way to avoid these issues is to adopt Tone and Timing as your mantra. An immediate follow up along the lines of: ‘Oops was there a problem-can we help?’ is much less likely to annoy, but demonstrates your commitment to service. You are guaranteed never to be out of step with the customer this way, which has the effect of dramatically simplifying the rules governing your remarketing program.
 
But what about those customers that need a promotion code before they will convert? Best practice here is to employ three tactics:
 

• Multiple email follow-ups - two or three follow ups work best, though this will depend on the specifics of your business; in some cases up to six are used

• Keep the promotion to the last email - staying in the context of a service communication

• Segmenting your visitors - selecting only those customers that, from their behavior, require an offer in order to convert to avoid training your customers to expect an offer

  Adapting to the changing behavior of today’s buyers requires ecommerce teams to change the way they market, and while promotion codes will continue to be a valuable tool in the marketers arsenal this holiday season, care needs to be taken to ensure that they help not hinder the conversion process.
 
Macy’s have taken the lead in actively promoting their special offer codes with a web page resource for customers. But promoting special offer codes is a tricky business, and many ecommerce marketers are still shy of using social media to actively promote discounts
 
In a future blog I’ll look at social media and the viral distribution of codes.
 
More information about remarketing to website abandoners, and website conversion can be found in the best practices section of www.seewhy.com/resources.