Podcast 24: Increasing Average Order Size with Bounce-Back Email Campaigns

Hey everybody, welcome to the Nerd Marketing Podcast. Got a special podcast for you today. Because we are doing full screen cast podcast. If you are near a screen, check out the podcast.

Check out the visuals.

You will see that I’ve got headbands and wristbands on. That can only mean one thing. That one thing being, I look like a complete idiot!

In my co-working space right now. But it actually means another thing. The other thing is that we’re gonna go into some actual customer data here. I’ve got the full screen going on my screen flow right now. The subject of today is, bounce-back email campaigns. What’s a bounce-back email campaign? How do we use them to increase you average order size? Why do you care about this? Because it’s probably one of the simplest things you can do to increase your revenue.

You could implement one of these things in an hour or two. And if you have the same success I did at Karmaloop, you’re gonna be making money in, in, by tomorrow, right, so at Karmaloop it took me about an hour to set this up, and it ended up generating a million dollars in revenue in the first year. So, let’s dig into the case study.

You’re probably asking, what’s a bounce-back campaign? Well, before we get into what’s a bounce-back campaign, let’s step back and talk about what are cross-sells, or up-sells in general, right? Cross-sells are stolen from the information marketing community, right, it’s this idea that you’re gonna buy something, that the customer has his or her credit card out, they’re gonna buy something. And you want to get them to buy, to increase their average order size, right?

So, add something to the order, or increase the value of their shopping cart, right, McDonald’s does this a lot, “You want fries with that,” that’s the classic cross-sell.

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And, again, the goal here is to increase average order size. It works because the customer has their credit card out; they’re in that buy mode, they’ve already made the decision to buy one thing, and it’s less of a hurdle to sort of get that person to buy something else, right? When they’re already in that buy mode, that’s why they work. Well, the challenge I was faced with at Karmaloop is these things are gonna be hard to implement, right?

Because Karmaloop’s IT stack was built in, like 2001 or something. I couldn’t do a lot of customization on the actual stack itself, and usually when you read about cross-sells or up-sells they always happen at the check-out, right? They happen in the cart, or post-purchase on a checkout page. And I said, huh, you know, I can’t really customize those things that easily.

I need a quicker work-around. The holidays were approaching, in this case it was December of last year. How am I gonna implement a cross-sell or an up-sell? And I looked to email bounce-back. So, for those of you in retail, a bounce-back is just a very simple way to get a customer to come back to your site at a certain period of time later to make another purchase.

That’s called a bounce-back, there’s a bounce-back coupon, which is only good for a certain amount of time. You pull the customer back to buy. And I said, okay, well what if I use a bounce-back approach to increase the average order size? In other words, customer buys, and then they are immediately hit with a bounce-back offer via email, because email is something I could control.

I didn’t have to customize the cart. And the bounce-back offer had that urgency. It said, hey, if you add something to your cart, if you go back and buy something within the next hour, then you are gonna save a certain amount of money. That was my thesis, that I’m gonna test out this bounce-back campaign. Now, we’ll look how we did it. It’s very easy to set up in Klaviyo, alright, so we used Klaviyo at Karmaloop. The trigger is, you want to set the trigger when someone places an order.

They’re gonna receive an email, so obviously the trigger is when someone places an order. The only filters I had on this flow in Klaviyo was I didn’t want people to get this every time they ordered.

I wanted one bounce-back email per customer, right, not per order. So the filter I have on here is, hey, it only goes out to people who have never received this flow before. So that makes sense. And, one basic email, the offer I came up with was a basic tee shirt for nine dollars. Subject line, you want fries with that, stole from McDonald’s, basic tees for just nine bucks a pop. If we go into what the email looked like, this is what the customer received. Again, put yourself in the mindset of this customer.

They just made their first order with Karmaloop, and they go to their in-box, and they’ve received this email: Hurry, add any black, gray or white tee to your order for just nine dollars.

The reason I chose one of these tee shirts, by the way, is that they’re super high margin. We had them in stock. They’re always good. You don’t wanna choose an item here that’s gonna be out of stock, because this whole promo would fall apart. You also want high margin because you’re gonna give it away at a deep discount. So, order in the next 60 minutes, use a coupon code to buy, and the hidden secret here, because I couldn’t customize the shopping cart that much, was, this is all fictitious. This is fictitious urgency, so you probably could use this coupon today and it would still work.

There’s no 60 minute limit, but, you know, the image of the clock helped, the weird looking coupon code helped, and boom, you know, there are the tee shirts. Again, to make this super simple, if you clicked this link and you went to a page, you went to just a hidden product page on the site. That’s always there. Where these tee shirts are just priced differently.

So, it was super easy for me to implement, as a marketer. I didn’t need the development team to get involved. If you run a smaller site on WooCommerce, Shopify, or something like that, you know, there are a million apps that help to do this, and you can get, actually more advanced. But for me, dealing with a tech stack that I really didn’t want to touch, email was the perfect work-around. So here’s my offer. Goes out immediately at checkout.

Boom, fictitious urgency.

And here are the results.

You know I looked, this is from December of last year. I think I set it up December one, and you know by the end of the month, $12,000 right here in incremental revenue, 42 percent open. You’re gonna see these kinda open rates whenever you tie an offer to check-out because check-out is when someone is the most engaged, right, they’ve just made a purchase. The number one most opened email for any retailer is the checkout order receipt. So anything you send around that time is gonna be consumed, opened.

So 42 percent, I mean I defy you to get an open rate like that on any sort of broadcast email sent. And, you know, the click rate wasn’t great, but it was, I set this up, literally, over a lunch time, and I’m getting 12,000 dollars in incremental sales. We went on to optimize this offer, to play with the subject lines, to play with the offer. And that’s where we got our million dollars in incremental revenue. Here are results. You know, we tested these nine dollar tee shirts, got 12,000 incremental dollars in December, and boom, this is the bottom line for this kind of campaign. You just get, you get gravy.

I mean, you get incremental revenue at very low, if not zero, marginal cost. I mean, what’s the marginal cost to send out an email? Next steps, after you do something like this, test the offers, you know, you want to obviously look at it versus a control group to make sure it’s working. But I assure you, these kinda promos work.

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These bounce-back email campaigns, which you use in lieu of a cross-sell or an up-sell, very easy to implement, and that is why I recommend them to almost any retailer I work with. So, quick tip, that’s the conclusion of this case study. I hope you learned a lot. Thanks for listening to the Nerd Marketing Podcast. And a couple admin notes, if you want a downloadable tear sheet or downloadable template of that email that I used at Karmaloop, that you can just copy and customize for your own email software, you can get it through the podcast notes. This is Podcast episode 24, so just go to nerdmarketing.com/24.

You can also text nerdme. One word, nerdme. To the number four, four, two, two, two.

That’s 4-4-2-2-2. If you do that, we’ll also send you the template for that email campaign. And two other things. First, I’ve just rolled out a course. If you’re interested in doubling your e-commerce revenue, you know, this is specifically for six- and seven-figure e-commerce retailers, because you gotta have customers to do it, but if you want to know my approach to double your revenue in under a year, go to nerdmarketing.com/double. And I’ve got a free course there. It’s six or seven lessons long. It will walk you through the approach I used at Karmaloop, the approach I used at my own retailer, to essentially double in a year.

That’s worth checking out. The second thing, if you are also in that range, six, seven figure e-commerce retailer, and interested in an on-going mastermind, go to nertmarketing.com/mastermind to learn more about mine. That’s where I actually get involved and help you double your business in a year. It’s a more one-on-one coaching situation. So two resources to check out. Thanks again for listening to the Nerd Marketing Podcast. If you want to find out more about the work we did at Karmaloop, episodes 20, 21, and 22 are worth listening to.

That’s all I’ve got. Talk to you next week, thanks.