Old style Decision Theory, the product of scientists with names sporting letters with reassuringly unfamiliar accents, tells us that those on your email marketing lists are ‘rational optimisers’ who pick the option with the ‘highest expected utility’. Anyone who has examined their returns from email marketing software will know this is rubbish. Even scientists have now worked this out.
At a workshop earlier this year organised by the Ernst Strüngmann Forum they discussed the inconsistent, perverse and irrational way we make our choices. If you are experienced in email marketing you are unlikely to be shocked by their conclusions.
We kid ourselves if we think that logic plays a big part in our decisions. More importantly, we limit our return on investment if we plan on the assumption that those on our email marketing lists do the same. Who has not thought, when things have collapsed around us, “Now why did I do that?”
It is probable that price is an important criterion of those on your email lists but it is not the only or indeed the main one. Your brain, and importantly theirs as well, is not a computer. It is biological. It will not necessarily go for the £49.98 item over that of the £49.99 one. There are many other factors that come into the process.
If we accept that some/many/most choices are not consciously calculated (not the most risky premise) then the chances of designing the perfect marketing email increases dramatically. The evidence will be found in the email marketing software returns but it needs a little push. Learning from your statistics is not a passive exercise.
You need to push, to experiment, but with a purpose. Just reducing the price to one where you make no profit is not the answer. Look for a target, a reason, an idea.
One reason why people remain with a company and will pick their products over others is emotion. They are familiar with the way the company does business. The risk of changing to another supplier makes them feel a little uncomfortable.
A feature that is exploited by many salespersons is friendship: the use of first names, the questions about family and praise for their garden. This is difficult to replicate online of course but there are ways of becoming more familiar.
Ask your customers how they would like to be addressed. It could give you a chink to exploit. Reward them. If they have reached a target, such as 10, 100, 1000 purchases, then give them a percentage off their next item.
Put yourself in the place of one of your customers. They phone your sales staff with their next choice. On the screen it indicates that they are in line for this discount. The sales persons says: I can see from your records that you are a regular customer, sir. I’ll take 2.5% off the total, with our compliments.
Try various ways to connect emotionally. If you consider the gratitude associated with newsletters worth the investment then go for it. You should use logic, calculating risks and costs, but in the knowledge that your customers probably will not.