Listrak Q&A: Helping Online Retailers Contend With Amazon's Email Engine

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Boring? Maybe, but email remains a powerful channel for online retailers. As a means to reactivate latent customers and shopping cart abandoners, it's hard to argue display, affiliate, or even search is more effective.

But the bar is getting higher in the space, thanks in part to Amazon's email retargeting platform.  Enter Listrak, whose Lifecycle Grid segments and automates email messaging campaigns for its mostly mid-market customers.

AdExchanger spoke with CEO Ross Kramer.

AdExchanger: What's the value proposition with your personalized email product? 

RK: Lifecycle Grid is our content management application as well as our analytics application; it allows customers to set up an automated campaigns to convert one-time buyers into two-time buyers, and two-time buyers into brand loyalists.

It allows marketers to see changes over time based on what strategies and techniques they're using.  It also allows them to visualize what products are creating the most loyal customers, which will affect things like how much they pay affiliates for their specific products or how much they'll bid in Google AdWords or retargeting campaigns for a product.

Custom generated e-mail has been around for a while. What are you guys offering that 's unique?

The roots of the Lifecycle Grid [we owe] to Jim Novo, who cut his teeth building out the Home Shopping Network. Jim found that it's really important to understand where your customers are at, in terms of their segmentation. Snd not only where, but how you message to someone that's a one-time buyer versus a two-time buyer versus a three-time buyer.

There are few tools available on the market that automate that process.  A lot of retailers today are using the very basic recency select.  Essentially they're looking at one-year buyers. There are a lot of retailers out there, large ones included, that are doing a one-year recency select, but they're not messaging to the folks that are about to fall off of that one-year recency select any differently than people that just bought yesterday.

The other piece is it's important that you speak differently to a 10-time buyer than you do someone that's never bought before.  Just saying "thank you" and recognizing that someone is a loyal customer sometimes has a higher propensity to keep them a loyal customer than giving them some type of an offer or discount.  That's really what the Lifecycle Grid is about. And it's not only giving them the ability to manage content and trigger messaging as people move from, say, 90 days since last purchase to 120 days since last purchase, but also to keep changes over time and [measure] how many different tactics you employ that effect your one-time buyers versus two-time buyers over time.

Many of your customers compete with Amazon on some level. How can you help them do that in the face of Amazon's powerful e-mail retargeting engine and the sheer data that they have available?

We are helping smaller retailers tailor their contact strategies to be more like Amazon. Given the sheer size of and scale of Amazon, and the technical power that they have at their fingertips, it's really incumbent upon smaller retailers to look at Amazon and to employ some of the tactics that they're using. We have three years of order history on about 150 mid-market online retailers; retailers between $5 million and $100 million in online sales.  When we crunched that data we found the average retention rate of those 150 retailers was only 15%.  Only 15% of their buyers were actually two-time buyers, which was one of the things that really encouraged us to build out the Lifecycle Grid.

Our hypotheses is that the Google effect has created that. Google has created essentially a low-hanging fruit model where it is very easy -- not exactly inexpensive or cheap -- but fairly easy, from a resource standpoint, to throw dollars at Google AdWords to hit the sales numbers you need to hit. Whereas it's fairly difficult to employ data and customer analytics to sell more to the customers that you already have. The concept of the Lifecycle Grid is that we can set up an automated campaign with the ease of an automated AdWords campaign that will generate dollars from the customers that they already have.

How do you see Listrak integrating with the whole marketing mix down the line, including display ads?

What would be very interesting for…marketers is to tie IP address data from clicks together with their DSPs to do retargeting.  You could overlay the marketing data and use the IP address information garnered from permission-based marketing to further increase your brand recall and brand recognition to consumers, or even the prospects you're looking to implement.  That is a pretty interesting way that the [email marketing] community and the DSP community can work together to create brand recognition.

There are also still untouched opportunities for display advertising inside e-mails, including within all of these transactional e-mails that are sent. Think of every social network or every [platform] using e-mail to send a confirmation. There’s a lot of advertising and promotional opportunities there.

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