The Five Keys to Sears’s E-mail Success

If you buy a flat-screen TV from Sears, seven days later you’ll most likely receive a thank-you e-mail suggesting an additional purchase of brackets to attach the television to the wall. According to Garrett V. Friedrichsen of OgilvyOne, Sears’s CRM agency of record, a significant percentage of flat-screen buyers spend several days with their new TV in a cabinet or on a tabletop before deciding that hanging it would be a better option. And after much testing and tweaking, Sears found that seven days post-purchase was the ideal time to let those customers know exactly what type of brackets would work best—and that they can purchase said brackets from Sears.

This triggered e-mail is just one of the myriad ways in which Sears Holdings Corp., parent company of Kmart and Lands’ End as well as Sears, has made increasingly sophisticated use of its e-mail database. Friedrichsen, who is partner, director of digital dialogue at OgilvyOne, discussed the ongoing evolution of Sears’s e-mail marketing efforts during a Direct Marketing Club of New York (DMCNY) luncheon held on April 8.

Friedrichsen broke down the success of Sears’s e-mail programs to five broad elements:

1) Data capture. “Every action is data,” Friedrichsen said of life in the Internet era. “Everything we do is captured.” Since January 2008, when OgilvyOne took over its CRM, the size of Sears Holdings’ database of marketable e-mails more than quadrupled, from 7.8 million to more than 36 million. OgilvyOne and Sears “looked holistically” to home in on 10 or so points of contact across multiple channels—including stores and call centers—where they could most effectively capture e-mail data.

They also improved some of the existing acquisition efforts. For instance, Sears enhanced its online opt-in form to clarify the benefits to consumers for signing up to receive the company’s e-mails (“Just sign up and we’ll email you great deals and discounts 2-3 times a week and get you started with $10 in coupons”).

Consumers are “opting in for a value exchange,” Friedrichsen said. So if you want to get something from them, you have to give them something in return.

Sears also ran a data append to gather the e-mail addresses of names already on its house file. While this certainly helped boost the size of the retailer’s e-mail file, “if you’re going to do an append, you’d better be prepared to treat [those names] differently to pull them in, engage them with the brand,” Friedrichsen warned.

2) Optimization. Friedrichsen defined this somewhat vague buzzword to encompass ongoing testing and measuring. As an example of the potential return from such efforts, he pointed to a Kmart reactivation campaign. Inactive customers—those who had not purchased in at least six months or had not opened an e-mail for at least four months—were sent a cadence of offers to encourage them to buy. Over the course of the campaign the offers became more generous. Revenue from these customers subsequently increased 129%, and the number of reactivations rose 243%.

3) Segmentation. For its holiday 2009 e-mail campaign, Sears segmented its database in 90 clusters, based on lifetime value, previous purchases, and other elements of customer behavior.

“Before we even started the creative we started compartmentalizing the consumers,” Friedrichsen said. The company sent three promotional e-mails each week in the run-up to Christmas; each e-mail consisted of a hero image and offer, followed by several smaller promotions, or what Friedrichsen called “slices.” Multiple hero sections and promotional slices, each of which was text based, were entered into a content management system for each of the three weekly mailings; for each of the 90 database segments, a different combination of elements was used for each message.

Recipients did not necessarily remain in the same database segment throughout the course of the campaign. Once a recipient took action, such as made a purchase, he was moved into a different customer segment. “Complicated algorithms” enabled this sort of granular targeting, Friedrichsen said. The result: a lift in response “hundreds of millions of dollars above the control,” he said.

4) Dynamic content. The segmentation used in the holiday campaign worked hand in hand with dynamic content creation, or differentiated messaging. Another example of dynamic content is Kmart’s inclusion of product recommendations on its order confirmations and other transactional e-mails. Algorithms determine the “next logical purchase,” Friedrichsen said, based on customers’ most recent purchases. Since adding dynamic promotions in transactional e-mails, Kmart has seen its average order value rise 59%.

5) Creative 2.0. Video links in e-mails, integration of social media into e-mails, innovative creative templates and subject lines… these are just a few of the elements that Friedrichsen referenced in discussing the importance of continually evolving e-mail creative and synergies with other media to maintain interest among recipients and, ultimately, increase sales.

“Utilize e-mail as the golden thread that will communicate everything else you’re doing,” he advised.