Vicki Updike Chief Marketing Officer, Miles Kimball Arthur Middleton Hughes Senior Strategist e-Dialog

1. Vicki Updike Chief Marketing Officer, Miles Kimball Arthur Middleton Hughes Senior Strategist e-Dialog Online Marketing: Driving Traffic, Conversion and Sales

2. Agenda • Highlight several e-mail strategies • Look in your mailbox strategy • Use of e-mails as reminders • Use of transaction and triggered e-mails

3. Look in your mailbox tests • Objective: understand incremental sales from catalog plus emails • Method: Send three different catalogs to test and control group with and without emails. • Measure: increased sales and reduced costs from use of emails.

4. How Test was Conducted • Randomly selected 2 test panels • All purchased on-line • All received 3 catalogs: Winter, Winter Remail and Spring. • Second panel also received three email newsletters: two after the catalog arrived, one during the catalog mailing.

5. Contact Strategy Results • Email group had total increase in sales of 18% over catalog only. • Email increased number orders by 6% • Average order size increased by 12% • Variable operating cost per order decreased by 44% for online orders. • Emails increased promo cost by 6%

6. Total Contribution* Increase • Increase in sales and decrease in operating expense resulted in: • Increase in total contribution by 43% • Increased contribution per order increased by 35% • Response rate increased by 6% * Contribution includes income from S&H plus sales

7. Transaction & Triggered e-mails • Transactional and triggered e-mails are the most powerful e-mails you will ever send to your catalog customers. • They have open rates of 70% to 90%, whereas promotional e-mail’s open rates are usually less than 20% • To be successful, these e-mails should be like a conversation between the client and his customer. • Secret of success: put the message at the top, and a cross sale below the fold.

8. Types of Triggers • Welcomes • Abandoned Shopping Cart • Product Ratings and Review • First Time Buyer • Birthday or Anniversary • Direct Mail Support • We Missed You • Surveys and Polls

9. Cold Stone Creamery E-Mails • Cold Stone with 1,700 locations created a birthday club “Receive FREE Ice Cream on Your Birthday!” . • In two years, 2,000,000 signed up for e-mails. • Birthday e-mails have open rates 62.5% higher than other e-mails. Click throughs are 350% higher . • Franchisee survey: “Overwhelmingly positive response… drives people into the stores… people don’t come in by themselves.”

10. Transactions: very powerful e-mails Transaction e-mails (“Your order was shipped today”) – like triggers -- have open rates of more than 60% Here is an ideal opportunity to promote additional sales – because customers are reading them. Many companies do not take advantage of this. Their transactions are in text, not HTML, and often say “Do not reply to this e-mail!” What a mistake!

11. Why Transactions often go wrong Instant Retail POS System Web site & E-mail Catalog Desk Instant Instant Delay Delay Delay Delay InformationTechnology E-mail Service Provider Shipping Dept. Text HTML Text Customer

12. How the Problem is Solved Web site & E-mail Retail POS System Catalog Desk InformationTechnology E-mail Service Provider Shipping Dept. Customer

13. A Terrible Transactional E-mail

14. Microsoft Blows an Opportunity Why don’t you make a note of this easy-to- remember number So you can enter it here! And read this easy number over the phone to them here!

15. Keeping your subscribers Now that you have them, how do you keep them – and keep them opening your e-mails? Make each e-mail relevant (to their interests) and an adventure (by making it very interactive). Include surveys, opinion polls, contests, humor -- why not make your e-mails fun to read?

16. Email ‘Reminders’ • Objective: Increase sales and contribution • Method: Send a follow up email reminding customers of the targeted sale • Measure: Combined online and offline sales and contribution increase.

17. ‘Reminders: Postcard design ’

18. ‘Reminders E-mail Design’

19. Email ‘Reminder Results • Email group had total increase in sales of 11% over postcard only. • Email increased number orders by 10% • Emails increased promo cost by 3% • End Result: Increased Contribution

20. Trigger E-mails Strategy • Objective: Increased customer engagement and increased sales • Method: Emails are sent to customers at the following triggers: • Receipt of a catalog • New promotable email address • No second purchase • Abandon shopping cart • Measure: Increased opens, conversion and sales.

21. Catalog Mailing Triggered email • Key Learnings: • Show the catalog that the customer will or has received. • Tell them what’s new • Make it easy to understand

22. Welcome Trigger Email • Key Learnings: • Give the new prospect a solid brand message • Not overly promotional • Include a call to action

23. We Miss You Email • Key Learnings: • Be specific • Ask them to come back • Consistent brand message

24. Abandon Cart E-mail • Key Learnings: • Be specific • Give them a reason to check out • Consistent brand message but stronger promotional content

25. Trigger vs. Non-Triggered Emails • 117% increase in open rate • 189% increase in click through rate • 10 Times the order rate • 11 Times increase in demand per email sent!

26. Triggered E-mail Conclusion: Generates valuable, loyal customers. Triggered emails to those who furnish opt-in address is a powerful marketing tool.

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