Ecommerce Email Marketing Maturity Model
It’s hard to believe email marketing has been around for over two decades!!! In that time it’s proven to be an extraordinary channel for merchants to communicate with their audiences and snowball revenue. The one truth that can’t be ignored, the more relevant and timely a message is sent, the better the results marketers see.
The tricky part has always been how to access the data in the backend. In the early days this led companies with a lot of resources to hire someone specifically to access the data. Over time, technological advances in marketing automation and segmentation have made accessing and using data available to pretty much everyone.
With all of these advances in automation tools and testing, a lot of marketers are left wondering whether they’re doing the right things. The reality is great marketing isn’t about the tools you use, it’s about making sure you have the right foundation. And that foundation is built with one thing: data.
We created the ecommerce email marketing maturity model to help you understand how you should be using data to drive your marketing at each stage of your company’s growth.
What's a maturity model (and how do I use one)?
A maturity model is a rubric for businesses to use to determine what stage they’re at with any given functional area or strategy – and a good maturity model will help you understand how to advance from one stage to another. For instance, you might be a merchant that’s just launched an abandoned cart flow. If you’re following the industry news, you might be hearing about companies that are using predictive analytics to segment their campaigns. How do you go from here to there?
Think of a maturity model as a robust chart/report with all the info you need to know how to improve an area of your business.
A maturity model is a road map for progress.
While it’s tempting to try and skip to the most advanced tiers, you need to be mindful and develop all the earlier steps in order to build a strong foundation. Often, a business might find their efforts scattered across the different tiers of a maturity model. Rest assured, that’s normal.
Ready?! Let’s dive in!
The first step in adopting an email marketing strategy is acknowledging that you need one! Of course, these days, it’s hard to find an ecommerce merchant that needs to be convinced of the fact that collecting email addresses and sending out promotions from time to time is an important part of getting their business started.
At this stage, your focus is going to be on finding an email marketing provider that is low cost and makes it really easy for you to collect email addresses, store them in one list, build emails, and see who’s opened and clicked them.
The types of email you’re sending can be described as “one-size-fits-all” and are typically considered “batch and blast” – meaning they send to everyone on your list with the exact same message. You might be personalizing your email with something like first name, but you aren’t doing much beyond that.
A few years ago, you could hang around at this stage of email marketing sophistication and still remain competitive. And if you’re spinning up a brand new business on the side or planning a business that you don’t intend to invest in building, this stage may be more than enough for you.
But you can’t stay in this stage for very long if you want your business to grow.
In fact, a good number of ecommerce companies today sail past this stage and move almost immediately into level two. Why? Because the level of effort it takes to get a bit more sophisticated with your email marketing is extremely low.
You don’t need an army of developers or endless time to move towards event-based email marketing. And it pays off – check out how much revenue these companies brought in in Q4, on average, simply from abandoned cart flows.
Ecommerce Industry Benchmark Report How Segmentation and Automation Drive Email Marketing Success
Straight out of the box, your emails look fairly decent and cover the basics of a solid email – professional, a compelling message, and a clear call to action. You’re using templates to your advantage. As far as customization you have added your logo and changed some of the colors in a template. Your mindset is “as long as it looks ok and works.” On the plus side, the templates that you use are likely to be responsive because they have been built by your email service provider.
Measurement & ROI
As for measurement, you’re not quite sure what exactly led to the increase in sales, and that leaves you in the dark about what’s working and what isn’t. Without access to the data you need, you’re likely in a spray and pray mentality for not only email marketing but your marketing strategy in general.
HOW TO LEVEL UP
If you have bought into email marketing but find yourself batching-and-blasting, there are two questions to ask yourself:
“Am I invested in growing my business?”
If the answer is no, then no worries – you’re right where you should be. If the answer is yes, move on to the next question:
“Am I only holding back on doing event-based email because I don’t know how to get started, don’t know what tools to use, or don’t believe it will pay off?”
If the answer to any of those is yes – then read on!
Level 2 is all about figuring out how you can accelerate sales with email – and the first stop is in automating email series that are triggered based on actions people take on your site. At Klaviyo, we call these automated email series “flows.”
As your email marketing has become more sophisticated, so has your need for a more robust email service provider that can handle autoresponders and email paths. Your ESP has the ability to measure some insights like open and click-through rates. Along with measuring insights, some of your data is now syncing with your ESP, just not everything that you need.
What you need from your ESP:
• A strong integration between your ecommerce platform and your marketing automation platform
Your event-based automated emails are only going to be as accurate as your data, so you need to make sure your ESP is collecting metrics like the number of checkouts started; orders placed; orders fulfilled; orders canceled; and more.
• Ease of use
You’re growing your business; you don’t have time to operate your software. Make sure you choose a solution that is intuitive and doesn’t require a long deployment or extensive training.
At the advanced stage for creative, you’re in a place of “building a foundation, but not a lot of sophistication.” You have felt the limitations of templates and now are trying a mix of designs between templates and freelancers. Brand consistency across all of your emails and website has become important to you. You’re thinking about color, font, logo, and photos when accounting for brand consistency. You might have even dabbled in using web-based fonts. You’re also starting to think more about the messaging and design for mobile experiences.
Check out these examples:
Measurement & ROI
With access to more data and insights, you’re better equipped to know which of your email efforts are working and which aren’t. Then you can use these insights to make better decisions for your business.
Once you get to around 5,000 people signed up for your email list, you have enough data to start thinking about segmentation. There are two types of segmentation you’ll want to take advantage of when first getting started:
The first place to start is with things people tell you about themselves that don’t generally change (or change infrequently), like gender or location.Next is to use shopping and browsing behavior to create segments based on what someone bought, how much they spent, or when they purchased.
At Level 3 you’re likely a well-versed email marketer who is familiar with best practices (like list cleaning), getting hyper-targeted, and have put a lot of time into your email marketing strategy.
You use segmentation almost religiously to target groups of users to produce a high level of personalization. In addition to a newsletter, welcome series and abandon cart emails, some of your more sophisticated auto-responders may be based on variables such as someone who hasn’t purchased in 90 days (winbacks) or a browse abandonment auto-responders. You’re using dynamic product recommendation off of buyer behavior to entice your audience.
You have a robust marketing automation platform setup that is your one view of the truth for your email marketing metrics. You have the ability to easily analyze data to make informed decisions about future marketing choices. A/B testing is available for the different components of your emails.
Your emails are beautifully designed, responsive, and created by an in-house designer or agency. Branding is cohesive across all communications with customers. With extensive A/B testing, there are increasing demands for creative and for producing a high-quality brand message and experience. With a dedicated design resource, your brand has the ability to not use a template and really spend time on how to differentiate from the competition and focus on overall brand presence.
Measurement & ROI
You understand which tactics are driving revenue to the business and are testing automated emails and autoresponder series.
On the horizon for ecommerce email marketing
Ok, so you’re at the point where you’ve built out a pretty sophisticated email marketing strategy. So… what’s next? What’s on the horizon?
The buzz in the marketing world today is all about artificial intelligence and machine learning.
Marketers seem eager to go all in on AI, but there seems to be a difference in opinion around how the terms “machine learning”, “artificial intelligence”, and “data mining” are being used.
A number of companies that claim to make use of artificial intelligence are actually really marketing machine learning techniques.
By 2020, 85% of customer interactions will be managed without a human.
Artificial intelligence will replace 16% of American jobs by the end of the decade.
Confused? Let’s break down the true differences:
When you think of machine learning, think about basic automation where you have a list of steps that you have taught a computer to follow. With machine learning, you have a set of defined questions that you are looking to answer, with different known variables that ultimately help you figure out what matters.
An example of machine learning would be calculating the optimal time to send a campaign or offer a discount based on data you already have. While it would be possible for a human to pull the data points needed and make an assessment, repeating this process 1,000, 10,000 or even a million times would not too feasible to scale. Machine learning has the ability to automate this process.
With artificial intelligence, there are two pathways forming: narrow AI and more general AI. Narrow AI is more commonly what we see today in marketing technology and AI at large.
Narrow AI could best be described as having a specific question in mind that you’re looking to find an answer to, such as “How can I improve the revenue of my campaigns?” or “When is the best time for our company to send emails?” While machine learning is built on basic automation of identified data points, narrow AI can take into account things that you might have missed earlier or overlooked previously (event tagging, for example).
General AI falls more into advanced technology like Apple’s Siri, Amazon’s Alexa, and IBM’s Watson. Each of these technologies, dubbed digital assistants, can answer a seemingly endless amount of questions. But not every question (digital assistants can’t cook you dinner or take your dog for a walk).
What AI for Ecommerce truly looks like
At Klaviyo, we can boil that down even more. Unlocking AI for ecommerce will come when it’s possible to tell marketers what they should do next to get the best results for their business without having to know which questions to ask.
Here’s what that means. Instead of focusing on how to improve certain data points, like click-through rates and opens, artificial intelligence for ecommerce will automatically let you know what exact actions you should take to improve revenue and even goes so far as to tell you how much revenue you’ll see for each action. Imagine logging into your marketing automation platform and being automatically alerted to the top actions you could take to increase revenue for your business. AI for ecommerce would allow marketers to spend less time poking around in their data. Instead, they’d enjoy being proactively told the exact actions they needed to take to help their business.
Right now the only company that is really at this point of sophistication in the sales and marketing world is Salesforce. The technology they have built allows sales reps to know which leads to prioritize using their artificial intelligence tool, Einstein.
And the reality is, while there are an ever-growing number of marketing technologies that claim to be AI-powered, the ability to really take AI and effectively apply it to ecommerce marketing is something that is still limited to a very small number of companies. Why? Because it requires a lot of time, money, and manpower. A small group of marketing technologists claim to do this, but the current state of A.I. and predictive analytics is underdeveloped.
In fact, the current state of AI and ML as it applies to ecommerce email marketing is not unlike where email marketing itself was not all that long ago: it’s expensive, takes an army to implement, is overly complicated to use, and vendors promise more than they can deliver.
In order to get to 100% for ecommerce marketers, the technology needs to not require heavy lifting and be able to reassess and learn what your subscribers need with each interaction.