Today you’re going to learn how The Kewl Shop's CEO Charles Fitzgerald grew his ecommerce company’s revenues by 22% in 12 months with minimal added costs.
You’re going to see how Charles continuously converts 5% of email prospects into customers.
And you’ll see the exact automated email campaigns that trigger based on subscriber behavior, so Charles barely has to touch his system for it to keep increasing profits. That's right—his revenue-cultivating machine keeps purring in the background as he tends to other parts of his business.
If you want to build an ecommerce-growth machine, now’s the time. Make your first workflow and see what true ecommerce automation is about. Let's see how Charles did it.
3 Strategies The Kewl Shop Used to Find 22% More Revenue (That They Were Leaving on the Table)
The Kewl Shop sells dresses, shoes, and leggings online.
As it turns out, selling women’s fashion products is one of the most fiercely competitive markets online.
So when Charles looked at options to grow his business, he didn’t have truckloads of money for testing. He needed to acquire customers as cheaply as possible while maximizing profits.
And that meant focusing on email marketing automation. Deploying emails with the right message at the right time to the right audience is cheaper than, say, sending untargeted direct mail to uninterested parties.
In this post, we’re going to focus on three email strategies that have made the biggest impact on growing The Kewl Shop’s revenue over the past 12 months.
Let’s go through each strategy one by one.
Strategy #1: Develop a Weekly Email Series Just for Existing Customers
We’ve written before about how it’s much easier to sell to existing customers than it is to acquire first-time buyers.
And yet, most stores still focus on acquisition.
The Kewl Shop, on the other hand, focuses most of its efforts on maximizing retention and customer lifetime value.
A good example is The Kewl Shop’s weekly email sequence just for existing customers.
It’s over 50 emails long.
And it’s scarily effective.
“Our ‘All Customers’ campaign is one of our most profitable campaigns, hands down. We take all buyers through a series of weekly emails after their first purchase with The Kewl Shop. We have around 50 weekly emails in this campaign—about one year long—and we closely monitor the results so we can cut poorly performing emails, leave the high-performing ones running, and form hypotheses around what types of emails work for our market. The net result is that we have a constantly optimized and high-performing campaign that brings customers back again and again. And we don’t have to think about it.”
Not all of the weekly emails in this campaign are sales emails.
In fact, many of these emails focus on content, style tips, and topics that The Kewl Shop customers care about.
Here are a few examples:
- Kewl Insights: 14 Things the Colors You Wear Say About You
- 11 Workout Mistakes That Hurt Your Fitness Goals
- Which Celeb Do You Vibe Most With?
If you’re not sure what types of emails to send to existing customers, start by brainstorming the core values and topics your customers care about.
If you sell snowboarding equipment online, for example, you could send emails like:
- The Top 10 Ski Resorts in the World You Need to See Before You Die
- 5 Easy-to-Learn Snowboarding Tricks You Probably Haven’t Tried
- These brand new snowboard goggles are trending…
You get the idea.
Once customers get hooked on your weekly email, it makes bringing them back to your store to buy that much easier.
Strategy #2: Profile Habitual Discount-Hunters to Maximize Your Profit Margins
The second strategy that’s been crushing it for Charles has been automatic profiling of customers based on the discount—or lack thereof—on their very first purchase with The Kewl Shop.
This dictates how The Kewl Shop offers each customer products for the entire future of their relationship with the company. And it’s one of the coolest uses of segmentation I’ve seen.
I’ll let Charles explain.
“We try to always give prospects the chance to purchase our products at full price. But if they still don’t buy after a set period—usually a few days—like many ecommerce companies, we offer them a discount.
Here’s where our strategy gets more segmented than most online retailers. We segment out customers who purchase with a discount (‘discount customers’) and those who do not (‘full price customers’) so that we never offer “full price customers” a discount again.
Our hypothesis with this "discount vs. no discount" profiling was that certain customers are happy to pay full price, whereas “discount customers” tend to need discounts from time to time to stay engaged.
In a nutshell, we align our email strategy with individual buyer behavior, and tag leads in Drip based on whether or not we believe they need discounts to buy.”
If you regularly blast your whole email list with discounts, you might be sacrificing more profit margin than you need to.
The fact is, many folks don’t need discounts. They were going to open your email and buy from you regardless. So when you offer a $20 discount to this crowd, you’re losing $20 in profit per transaction.
With Charles’s segmentation strategy, The Kewl Shop can use decision tree logic to segment customers by buyer behavior in every funnel. This plays a big role in The Kewl Shop keeping a healthy $38 value per subscriber.
“This has been huge for protecting our margins,” says Charles. “We’re no longer sending out coupons generally to customers who have demonstrated that they will buy at full price.”
From there, you can use tags to segment customers based on whether they purchased at a discount (e.g., Coupon Buyer) or at full price (e.g., Full Price Buyer). Check out our guide to email personalization for some ideas on how to write dynamic emails that show or hide coupons based on recipients’ tags (with just two lines of copy-and-paste code).
Strategy #3: Set Up Product-Page Abandonment Campaigns
If you’ve been in the ecommerce game for a while, you’ve probably set up cart abandonment recovery.
But fewer companies take advantage of product page abandonment—when a prospect simply views a product or category page and leaves your store without (necessarily) adding anything to their shopping cart.
You’ve probably seen these emails from Amazon and other big online retailers.
For The Kewl Shop, product page abandonment campaigns are a huge revenue driver.
According to Charles:
“These are extremely high converting because they are so relevant to exactly what our prospects are shopping for. For example, within 60 minutes of someone checking out our blue bandage dress, if we have their email and they still haven’t bought, we send them a follow-up email all about our blue bandage dress.”
Here’s how The Kewl Shop sets this up in Drip.
When visitors land on The Kewl Shop’s blue bandage dress product page, they enter a workflow in Drip.
This workflow waits 1 hour. Then, if the prospect still hasn’t made a purchase in Shopify, the prospect receives an email with the subject line “About our Blue Midi Strapless Bandage Dress.”
Here’s what that looks like.
The good news is that you don’t need to spend thousands on fancy product recommendation software or custom development work to set this up.
With Drip, you just copy and paste one piece of code onto every page of your website and you’re good to go.
What’s Next for The Kewl Shop: The Hunt for a High-Converting New Traffic Source
Most marketing case studies only give you the bright side of the story.
But I’d be remiss if I didn’t include one final insight from Charles. If you’re a professional ecommerce marketer, this gives you the bigger picture of The Kewl Shop’s future growth.
“Our value per email subscriber is $34, and we have effectively no cost per subscriber, since all of our subscribers come to us organically through sales or signup. These numbers might imply we could go out to Facebook and buy subscribers at approximately $2/subscriber and make a huge profit. But the reality is, we only have such a big value per subscriber because these subscribers are not “purchased.”
We did actually try this and bought a ton of subscribers from Facebook, only to learn the hard way that they didn’t convert. They were generating much less than $34 and, on prudent measure, were losing us money, so we stopped.”
Overall, The Kewl Shop has a lead-to-sale conversion rate of 5%. That’s good by any measure.
But average conversion rates are just that—averages.
If Charles wants to double or triple his business, he’ll need to track channel-specific value per subscriber and conversion rate. And so far, Facebook ads aren’t working. He says:
“The way to create more value moving forward is to drive more traffic to the site, preferably through organic search—although given the $34 per subscriber, we should have room for some pay-per-click advertising. We still have huge potential gains if we increase our organic visitors (leading to a bigger subscriber base at virtually no cost), and that is where all our efforts are currently focused.”
Grow Your Ecommerce Profits on Autopilot with Marketing Automation
Most ecommerce companies are leaving a ton of money on the table by neglecting lifecycle marketing campaigns.
If you’re getting sales, you need to be emailing your list—ideally, on autopilot. As The Kewl Shop has shown, it’s one of the most cost-effective strategies to increase your profits.
If you’re ready to get started with lifecycle ecommerce marketing, now’s a great time.
Will you try any of these lifecycle ecommerce marketing campaigns? Let us know in the comments.