NEW YORK — If you want something done right, you have to do it yourself.
That was certainly true for Frederick’s of Hollywood, which started managing its own e-mail lists two years ago with strong results. Since taking charge, the company has seen a 48 percent increase in online sales revenue triggered by e-mails, which are now Frederick’s most successful online marketing channel after catalogue mailings.
Before the move in-house, the company had been outsourcing to a third party, which maintained Frederick’s list of customers and prospects and sent out mass e-mails. In 2002, Frederick’s started keeping its own list and sending out mass e-mails on its own with the help of Lyris ListManager, e-mail marketing software from Lyris Technologies Inc. of Berkeley, Calif. Jennifer Bedolla, senior marketing manager for online, arrived at Frederick’s in November 2002 and decided to take the program further.
Perhaps her top innovation was redesigning Frederick’s home page to encourage more existing and prospective customers to sign up for e-mail from the company. When Bedolla arrived at Frederick’s, one choice on the navigation bar on the home page was to “sign up for e-mail,” and the company had an average sign-up rate of 27 percent of all visitors.
“That’s OK, but I thought we could do better,” said Bedolla. She changed the message to “Want special offers? Sign up for e-mail” and inserted it into the “creative,” the big, colorful picture of a model wearing Frederick’s lingerie and other products that dominates the home page and changes every Sunday. She tested the placement of the message by moving it to a different spot each week and looking at the response.
What she found: The best placement is slightly below center, nestled under the largest copy on the site, which happens to go with the main image. A visitor’s eyes go to the big image first, then fall on the associated copy and then — inevitably — the e-mail sign-up.
After Bedolla made the change in April, the sign-up rate shot up to an average of 44 percent from April through October, the most current month for which Frederick’s has data.
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“Most people, when they come to the site, look at the image, then they see the bold print,” Bedolla said. “Those are popping points in regard to copy, so we saw a huge increase just by adding it there.”
In November, Bedolla temporarily moved the e-mail copy out of the creative and to the bottom right of the home page to make way for holiday promotions.
Wherever the copy is situated on the home page, e-mail marketing is a major force for driving sales. Twenty-one percent of Frederick’s online sales originate from the e-mails it sends out; portal ads account for 3 percent; search is 7 percent; affiliate marketing, 4 percent, and list rental (e-mail marketing through third parties) is 5 percent. Catalogue mailings prompt 41 percent of sales online and customers typing in the URL themselves account for about 20 percent of sales, said Bedolla.
The company tailors its e-mails to different groups. For example, for customers who already have made at least one purchase, Frederick’s tends to send out more targeted e-mails. Those who have bought lingerie would not receive an offer related to ready-to-wear. Prospective customers — those who’ve signed up to receive e-mail but have never bought anything at the Web site — receive enticements such as free shipping off the first order, or a percentage or dollar value off the first order. Even though the company typically sends out e-mails about twice a week — with two or three special offers a month — the opt-out rate is only 2.6 percent for prospects and 1.2 percent for customers. (Opt-out rates of 1 to 4 percent are typical and actually have been going down, as customers increasingly ignore e-mails rather than unsubscribing, said David Daniels, an analyst who covers e-mail marketing for Jupiter Research.)
Frederick’s most effective e-mail marketing campaign, a tiered discount, increased the average order value by 64 percent. The discount was $10 off a purchase of $75, $20 off $100 and $50 off an order of $150.
Since focusing more attention on e-mails as a marketing tool, sales have continued to soar and the list has increased dramatically, said Bedolla. From August 2003 to August 2004, online sales (from e-mails) increased by 48 percent. Frederick’s is a privately held company and does not disclose sales figures, but industry experts estimate the retailer has revenues of more than $200 million annually.
In the future, the company hopes to grow its list even more. The list already increased by 10 percent in the fall, compared with the same period last year, thanks partly to Lyris’ new “block list” feature. The feature tells Frederick’s which Internet service providers have blocked its e-mails, so Frederick’s can resolve the problem by contacting them. The company also hopes to increase the size of its list with the “refer a friend” campaign it introduced in November and the profile pages it will add in the new year. The profiles will allow e-mail recipients to tell the company how often and when they wish to receive e-mails and on what topics.
At Frederick’s, size counts.