How we Increased our Ecommerce Email CPM 1000%

How we Increased our Ecommerce Email CPM 1000%

In my last ecommerce business, we acquired over 11 million email subscribers in 9 months.

Our ability to monetize those leads by turning tire-kicking newsletter subscribers into actual paying customers was the backbone of our company.  In fact, our cutting-edge email marketing and ecommerce CRM prowess allowed us to grow revenue 20-fold in a single year, and raise over $100 million in venture capital.

With 11 million subscribers, we were forced to do several things to keep our emails out of spam filters and keep our huge list engaged and active.  Interestingly, the solutions to avoiding spam-filters and fostering active engagement were one-in-the-same.

In a few months, we increased our email revenue by 250%, while sending only one-quarter as many emails.

This improvement started with a guiding principle — my team felt that access to a customer’s email inbox was a supreme privilege.  Any customer could revoke that privilege at any time, so our messages had to be welcomed and wanted.  Spammy shortcuts only led to short-term gains… in the long run, spamming our list would slowly kill our business.

In the course of a few months, we went through three stages:

In the first stage — our high school phase — we used simple “batch and blast” tactics.  Like most retailers at the time, we sent the exact same email to our entire list, only focusing on improving open rates, click rates, and frequency of send.

In the second stage — our college phase —  “batch and blast” tactics still dominated, but we began to personalize the emails.  If you were a man, you received men’s content.  If you liked expensive items, your emails featured high end product.   If you liked Brand X, your content would be heavy on products from that brand.

By simply personalizing price,  gender, and brand our conversion rates went up dramatically.  We were still using a shotgun approach, but our aim was a lot better.

In the third stage — our Phd phase — we revolutionized our business.

In this period, our personalization improved dramatically.  The personalization was algorithmically driven by artificial intelligence and was based on thousands of factors: age, location, Facebook interests, device, browsing history, purchase history, etc.

In addition to pushing products, we began sending highly engaging lifestyle content in our emails.  Our unsubscribe rates went down dramatically, and our click rates skyrocketed.

More important than personalization and the inclusion of content, however, was the event-driven nature of our emails.  Other than an occasional reactivation email to dormant customers, we stopped sending batch and blast type emails almost entirely.

This new event driven-system began with our aggressive abandoned cart email flow.

Like most retailers in-the-know, we aggressively retargeted the user through personalized emails.   (if you’re not sending abandoned cart emails — START NOW — it’s the most profitable tool in the online merchant’s bag.)

While most retailers stop there, we went multiple steps further up the funnel.  We built email cascade flows for literally every action a user took on our site.

To begin with, we sent an order of magnitude more abandoned cart emails than other retailers could. While most standard ecommerce platforms like Shopify require the user to enter their email address on that particular visit, our custom technology identified the user from past visits without requiring the user to be logged in.  Doing so allowed us to send ~300% more abandoned cart emails than standard systems.

Additionally, we went up a step in the funnel.  We started sending “product-view” emails to customers who looked at products, but didn’t add them to their cart.  Eventually, we built “category-view” emails that were triggered when a customer viewed a specific brand or product category but didn’t look at a product.

We A/B tested every element of every flow ad-infinitum.

By doing so, our email CPM went up nearly 10-fold, and our aggregate email volume went down approximately 75%!  Revenue from our email channel went up around 250%, despite the fact that we were sending only 25% of the messages.

Techniques like these are impossible using today’s off-the-shelf ecommerce platforms — it simply can’t be done on Shopify or any other cloud-hosted platform without employing extreme, costly hacks.

My team found this limitation so frustrating, that we’re building our own ecommerce platform.  It’s called Engine, and we’re currently working with pilot customers.  Email me john@engineinsights.com if you’d like to learn how Engine can revolutionize your email marketing program with our innovative ecommerce CRM system.

Written by
John James, M.D. is the CEO of Engine, a modern cloud-hosted ecommerce platform. I paid for medical school with an ecommerce business I founded in my dorm room over twenty years ago, and eventually raised over $100 million in venture capital running Acumen Brands. Email me -- john at enginecommerce dot com.