"While we have a strong email program, we knew a high percentage of customers were never seeing our messages. We had a feeling there was tremendous untapped potential if we could reach those customers."
In the world of online retail, competition is fierce and unrelenting.
More and more manufacturers are selling direct online, Amazon continues to gain market share, and competitors continue to drive up search and social advertising costs.
Aftermarket automotive parts are no exception. Jeep owners, or “Jeepers,” are passionate enthusiasts, always looking for new products and inspiration for their ride. And that makes them coveted consumers for many companies selling parts online.
Morris 4x4 Center is one of the top online retailers for Jeep parts and accessories. Founded over 25 years ago by Glenn Morris and now headed up by Michael Bernard, the site grew rapidly and now boasts over 50,000 products and 1 million customers.
In this case study, we'll show you the exact strategy and campaign Michael and the Morris 4x4 team uses to keep those customers coming back.
The key to sustained growth for online retailers like Morris 4x4? Lifetime value.
As a retailer selling mostly 3rd party brands, margins are tight. Low cost customer acquisition is crucial. Even more critically, once a customer is acquired, Morris 4x4 must remain top of mind and turn one-time buyers into repeat customers.
Why so critical?
Because repeat purchases are where profits and compound growth comes from. Morris 4x4 isn't paying to reacquire those customers after their initial purchase. For many retailers, that initial purchase is often breakeven at best, after factoring in product costs, marketing costs, and operational overhead.
And, for nearly all retailers and brands, once a customer makes a second purchase, that customer is far more likely to remain loyal in the future.
But how does one keep a customer repeating? The most effective way in online retail requires two steps:
- Companies must detect when a customer is defecting, or leaving the brand.
- Companies must prevent this defection from happening.
Michael knows that many Jeepers are working on a “build” (restoring an older Jeep or outfitting a new one with accessories). If that customer doesn’t come back within 70 days, they are at high risk of losing them for good.
Why Email Only Solves 15% of the Problem
Email campaigns and flows are a great start. However, the marketing team at Morris 4x4 saw that over 85% of their customers don't engage with email -- either they're not on the list or aren't opening the email campaigns.
“While we have a strong email program, we knew a high percentage of customers were never seeing our messages. We had a feeling there was tremendous untapped potential if we could reach those customers.”
Michael Bernard, VP Morris 4x4
Michael and the team turned to PostPilot to test whether direct mail could deliver incremental revenue and repeat purchases.
Solution: Postcard Win-Back Campaigns
Being a data-driven team, Morris 4x4 is all about measurable ROI. We worked with them to devise a win-back campaign test. The win-back campaign is specifically designed to prevent a customer from defecting by offering an incentive if they don’t make another purchase within an expected timeframe.
They started with a segment of all customers that had not purchased in the last 70-90 days, selecting a random subset of 2,000 customers to receive postcards. The remaining 15,400 received an email win-back campaign.
For additional tracking, the campaigns included a unique coupon code based on whether it was in email or direct mail.
Here’s a look at the card:
This “textbook” win-back campaign took ~15 minutes to create and checks all the boxes; strong imagery, succinct copy, clear branding, relevant targeting, compelling incentive with expiration for urgency. We love the use of personalized name fields on both the front and back.
Results: 680% ROI and 18.5X better conversion rate than email.
Let’s start by examining the email campaign. Here’s a preview:
It’s a perfectly good email.
Here’s the problem…most customers aren’t even reading it.
Out of the 15,400 recipients, 1,397, or 9.2%, opened the email. That may sound low, and is lower than the average overall open rate for Morris 4x4. However, it’s important to remember that these are customers that have not purchased recently and therefore are less likely to engage with email — which makes direct mail even more effective!
Of the 1,397 recipients that opened, 62 clicked and 10 placed an order, generating $2,924 in revenue.
Now let’s compare that to the PostPilot postcard campaign:
Of the mere 2,000 customers that received the postcard (which typically gets read by >90% of recipients), 24 placed an order, generating 160% more revenue than email with 87% fewer recipients! (That’s an 18.5X better conversion rate. We did the math.)
With a 680% ROI, that’s already a big win for Michael and the team.
Here’s where things get even more interesting.
Over the 60 days following the launch of the campaigns, Michael analyzed the performance of the two customer segments:
- Customers that received the postcard win-back + regular email newsletters
- Customers that received the email win-back + regular email newsletters
Total revenue from the 2,000 customers that received the postcard and purchased again exceeded that from the more than 15,000 that only received the email — that’s 9X more on a normalized basis.
It’s no surprise. Numerous studies have shown that direct mail generates far better brand recall and engagement, while boosting your email marketing efforts by 25% when used together.
Here’s a breakdown of the results:
Michael and the team were thrilled with the results of their test.
“PostPilot made it extremely easy to create and launch our personalized postcard campaign. They were there to help us every step of the way, including giving us great suggestions to maximize performance. And the results far exceeded our goals. PostPilot is now a core channel in our overall marketing program.”
Michael Bernard, VP Morris 4x4
After the successful test, Morris 4x4 automated their win-back campaign to automatically send an individually personalized postcard to any customer that hasn’t made another purchase in the expected timeframe. It works as follows:
- Create a segment targeting existing customers that don’t purchase again within 70 days (or whatever the average time between orders is for your customer).
- Trigger a personalized win-back campaign when a customer meets the criteria.
- Offer the customer a discount on a subsequent purchase.
They’ve now got customer retention on cruise control.
- Customer retention is critical for online retailers to make profits.
- If you’re only relying on email, you’re missing a huge portion of your customers and leaving $$$ on the table.
- Postcard marketing works and makes your digital campaigns more effective, and PostPilot makes it ridiculously easy.
PostPilot will work for your DTC Brand.
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