Does NOT having a strategy qualify as a strategy? You’re knowingly putting your efforts elsewhere. Deciding – somewhere along the line – that the best way to achieve your goals, believe in your mission, and stick to it is to reserve the right to remain silent. Or should you travel the road less mum? Is blasting your customer with many, and potentially bothersome, daily emails better than not communicating with them at all? This is the question we encountered and attempted to answer in our fourth Brand Prix.
But first things first…a quick reminder of what we set out to do with our feature:
In this series, PostFunnel will follow two competing brands to assess their customer marketing performance. For each case study, we’ll enact a customer journey with the respective brands, document every customer interaction sent to our testers, and share inputs and insights from our experience with the companies.
This round, we gave our testers $500. They engaged with the brand for roughly six weeks on a few different platforms. The PF editorial team and marketing experts then graded the performance based on personalization, strategy, user experience, and overall engagement on all life cycle stages.
We based our analysis on metrics that speak to the data-driven marketer, moved beyond traditional tactics, and instead, approached the shopping experience from the marketer’s POV.
Up until now, we stuck to our reliable, chosen format, a slight tweak here and there from our previous tests. But as you’ll soon realize, this one is unlike the others.
This time, we compared two retailer goliaths in the clothing and accessories industry:
Gap operates five primary divisions, Old Navy and Banana Republic among others, but we will focus only on the main brand – Gap, the largest of its kind in the U.S.A, with more than 700 locations in the states and 1,500 stores worldwide. Their net sales in 2017 were just shy of 16 billion dollars.
Clothing retailer Zara – founded in Spain, has more than 2,200 stores in about 100 countries. Famous for their quick development abilities, Zara designs around 20 different clothing lines every year. Forbes estimated Zara’s value at 13 billion dollars last year.
We asked our testers to check both companies’ kids’ departments – Gap kids, and Zara kids.
And we’re off to the races!
A quick change of plans
The way our testers operate with the Brand Prix is clear and simple. They have a list of daily ‘to do’s’ to… well, do, on each of the brand’s sites. They browse, put items in their carts, sign up for a newsletter, create an account, abandon the carts, purchase, browse, return, check-out, purchase and so on. Everything you’ve probably done and more when engaging with an online retailer.
But in this test, it was clear from the beginning that there were two completely different marketing strategies at play. Maybe just a single strategy. One company blasted us with daily emails, sometimes more than one per day, for an extended period of time. They increased their suggested offers straight from day 1 (the day we registered), from 25% off to 40% and even 50% off. They sent us newsletters and promos every 24 hours, and re-targeted us through social media with additional products.
The second company didn’t communicate with us at all. All we received were the company’s’ transaction emails (on registration, purchases and returns), nothing more.
So, let’s start answering the question – which method is better?
There are two main aspects to a CRM retail strategy: First, the marketers, sitting for hours behind their desks, planning, sketching, designing, and implementing marketing plans. The second is behind the screen, the customers.
We’ll address the benefits and flaws for both extreme methods for our two competitors. Let’s start with Zara, who by the way – was the company that hardly sent us anything…
For the customers, receiving zero emails from their recent retailer could be interpreted in two ways: The first – indifference. Many customers won’t feel the absence of communication or conclude that the retailer skipped out on them. On the other hand, some customers interested in the brand may feel like they have been forgotten. Think about a loyal Zara customer who purchased at their shops for years and just realized he’d prefer to shop through his computer. He gets dozens of emails from other retailers, presenting their new goods and real money offers, but nothing from his favorite fashion brand.
There is no doubt that for the marketers, this is a big loss. It is a widely-known fact that an effective marketing plan and a solid CRM strategy can increase customers’ lifetime length and value. No plan means no potential uplift in any KPIs for the CRM team, at least not on their behalf.
Is a blast email plan better?
The ‘spray and pray’ method, as Gap operates here, has been long identified as ‘the wrong approach.’ While the presence of a marketing plan covers the flaws of its absence, it creates additional and different errors.
We can again test it by our two main thresholds: The customers – who see more than one email per day – can feel a little overwhelmed. And this feeling is most likely encouraging customers to ignore future messages (in the best case), prompting them to flag your emails as ‘spam,’ harming your reputation, or in the worst case scenario – quickly looking for the unsubscribe link, opting for eternal invisibility. An additional aspect is that the marketer tosses out the ability to communicate with his clients – he’s suddenly irrelevant.
For the marketer, besides having fewer customers to target, there are additional pitfalls in this technique. As one of the main objectives of the CRM (believe it or not) is to make money, wasting it would be more than unreasonable.
Nevertheless, many companies still use the spray and pray method, spreading monetary offers to all their customers without realizing the unnecessarily wasted costs.
While segmented and personalized marketing would have helped retailers better distribute their marketing budget or look for more valuable customers, a blast of non-segmented emails would reduce the revenue for no real reason.
And what about the immediate increasing offers? Does getting 25% off and then 40% or 50% in just a few consecutive days have a negative impact?
Yes. This kind of communication can actually prevent the customer from purchasing. “Why don’t I just wait for the offer to improve even further?” he might think. Disturbing thought aside, the marketer loses the ability to attract the customer. One might think “50% off? I’m getting that every Monday. No need to spend money now.” Let’s assume that a marketer has a limitation for his discount costs, what should he do when the 50% is no longer attractive?
When you offer customers high discounts fast, they will react like kids, and want even more. We all do, it’s human nature. Then, taking away these discounts could foster disappointment, leading to unwanted behavior. A balanced marketing plan would let the marketer better control offers and use them wisely.
And the winner is:
Still, summarizing all that, it’s safe to say that something is better than nothing. You have a plan, a strategy you can work towards, something to work with, apply some changes, and see your numbers increase. Gap targeted us with many offers, encouraged us to make additional purchases and re-targeted us through different social media channels. We can also agree that more personalized communication, less frequent and mass distributed, would create a better impact for Gap, both for the customer and their marketers. Zara didn’t even give us the option.