While e-commerce giants often dominate discussions on digital marketing strategies, we’ve witnessed those same giants leave dollars on the table by leaning away and reducing budgets from one tried-and-tested channel. What are nonprofits doing differently? They are prioritizing email marketing. Nonprofits know that email is, and will continue to be, a critical piece of the puzzle regarding increasing revenue and marketing returns, and they’re seizing that opportunity.
While the average return on investment (ROI) from email marketing is an impressive 36:1, many e-commerce companies are falling short due to their limited investment in this channel. This leads to a huge disparity in email revenue, with some of our clients seeing email drive as much as 60% of online revenue while we’ve seen others down in the 1-4% range.
It’s a common misconception that email is a dying channel, perceived as an old-school way of doing things. However, reports show that email marketing revenue is estimated to reach over $12 billion by the end of 2024 with future projections signaling sustained growth.
As consumer behavior continues to evolve, e-commerce companies must reconsider their approach to email marketing to reach their customers more efficiently. Let’s review a few ways our nonprofit clients have achieved success in email marketing and strategies that translate effectively to the e-commerce industry:
1. Mitigate Customer Acquisition Cost By Seeing The Full Funnel
There is always a heavy focus on customer acquisition cost (CAC), which neglects the remainder of the customer journey. The vast majority of the customer journey comes after the moment of acquisition. The cost of acquiring a new customer can be 5x higher than that of retaining an existing customer.
It’s time to take advantage of the database you’ve built and ensure your post acquisition strategies are knocking it out of the park. Giving as much attention to your existing customers as you do to your brand new audiences can significantly impact your bottom line. Studies have found that by increasing customer retention by just 5%, companies can expect to see profits increase from 25%-95%.
A non-profit focused on youth homelessness increased YOY revenue by 48% by identifying long-term growth drivers through longitudinal testing.
If you’re a subscription-based business, the focus on your existing database is even more crucial. We know as subscription-based businesses mature, the percentage of revenue from existing customers increases to up to 80%. This means that an ongoing heavy focus on acquisition will miss the mark and limit long-term growth.
While it may be tempting to prioritize immediate gains, such as reducing CAC, focusing on longer-term strategies like customer retention and lifetime value often leads to more sustainable growth and profitability. This transition not only enhances the effectiveness of marketing plans but also positions marketing teams as strategic partners focused on the business’s overall success.
2. Personalization & Automations
Engaging with your customers through email marketing can be remarkably cost-effective once you’ve laid down the foundational groundwork. Recent statistics reveal that over 50% of consumers have made purchases directly prompted by receiving an email, underscoring the significant impact this marketing channel can have on driving sales and fostering customer relationships. But how can you ensure that your customer interactions resonate and drive meaningful engagement?
Enter personalization and automation.
By segmenting your audience based on various criteria, such as demographics, purchase history, or engagement levels, you can better tailor your messaging to meet the needs and interests of specific customer segments. Segmented emails consistently outperform unsegmented ones, boasting 30% more opens and a staggering 50% increase in click-through rates. Testing different segmentation criteria allows you to refine your approach further, ensuring that your content, promotions, and calls to action are finely tuned to maximize engagement and revenue generation.
A personal touch along with a compelling value prop boosts donations
Automation plays a pivotal role in streamlining your email marketing processes and driving efficiency. Automating workflows based on customer journey stages or known audience attributes enables you to deliver timely and personalized messages without constant manual intervention. This frees up your team’s time and ensures consistent and relevant communication with your audience throughout their interaction with your brand.
Consider the example of a jewelry e-commerce client who partnered with Cro Metrics to enhance their email automation strategies. By refining their welcome and abandoned cart flows and extending automation across the entire customer journey, they witnessed a 329% YoY increase in revenue. This highlights the immense potential of leveraging automation to orchestrate seamless and personalized customer experiences.
Ultimately, the effectiveness of testing in email marketing cannot be overstated when aiming to boost revenue. Despite often being underutilized by e-commerce giants, email marketing remains a pivotal channel for driving sales and nurturing customer relationships. Implementing testing is the best way to discover what works and what doesn’t for your unique customers and brand.