Case Study: RFM Analysis Strengthens Eastwood's E-Mail Marketing Program
Problem: Eastwood, a catalog/multichannel retailer of tools and supplies for customizing and restoring motor vehicles, sought to drive greater revenue and profits via e-mail marketing while reducing costs.
Solution: It partnered with an e-mail service provider for its RFM predictive analytics software.
Results: Revenue via e-mail marketing has increased 20 percent, profits from e-mail are up 21 percent, e-mails viewed are up 65 percent and opt-out requests are down 14 percent — all while e-mail costs have been reduced by 25 percent.
When Peter Kosciewicz joined the Pottstown, Pa.-based Eastwood in 2003 as chief marketing officer, he quickly targeted e-mail for potential revenue growth.
Eastwood’s e-mail service provider at the time was too small to support Kosciewicz’s vision. And deliverability problems plagued the company. So he led Eastwood on a search for a new vendor, settling on iPost later that year.
In January 2008, Eastwood began using iPost’s Autotarget, a tool designed to provide segmented RFM analysis on a daily basis. Prior to Autotarget, Eastwood’s e-mail strategy consisted of generic batch-and-blast e-mails to its entire housefile of 200,000 names. This led to a poor sender reputation score. Autotarget enables Eastwood to identify customers who are most engaged with its brand and, therefore, most likely to respond.
“As reputation scores became more important, the relevancy of our e-mails, the frequency with which they were clicked through, the number of opt-outs and spam complaints became more important,” says Kosciewicz (who left Eastwood last October for a similar position at Witmer Public Safety Group, but was authorized to discuss the program with Catalog Success).
Less = More
Autotarget’s RFM segmentation significantly reduced the number of Eastwood’s customers receiving e-mails. With revenue goals for each campaign, Kosciewicz didn’t believe a “skinnied-down” list would suffice. But the first test e-mail sent in January 2008 quelled those concerns. (See “Results.”)