Amazon’s fantastic e-mail marketing

Amazon has built an empire by providing its consumers with a vast range of products, becoming a one-stop shop for most people’s entertainment needs. The amazing thing is it didn’t achieve this by advertising to the masses. Instead, it focused on segmenting its consumers online and building a remarkably customized experience for each consumer. Customer segmentation often involves creating personas based on demographic information. For years, Amazon has understood the power of e-mail as a tool to predict customers’ future purchasing behavior hence increase real revenue.

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Track everything customers do

Rule no.1: track absolutely everything customers do, data is power.

Amazon has mastered this. It has built a very complex technology system that segments its consumers with little effort by using software that automates the process. This software monitors its website visitors, their behaviors on the site, what products they buy and what information they download. As consumers navigate and interact with the website, information from their visit is recorded and provides updated content based on their actions.

Just take a look at their homepage. Yours will look different than mine and I am sure it will be different tomorrow. The homepage is never the same. With sections like ‘New for you’, ‘More items to consider’ and ‘Recommendations for you in video games’, Amazon is constantly tracking what customers browsed and what they have bought and then adjusting their messages.

If you are a student, Amazon will want you to connect Twitter and Facebook. It doesn’t need to keep asking you questions in order to know all about you, but your information will never be hidden from them!

Predicting future purchasing behavior

What’s the most predictive of future purchasing behavior? The answer is previous purchasing and shopping behavior.

Why try to predict when female customers will get pregnant? When can target customers who use pregnancy-related terms in the product search? Or used Google to look for phrases like ‘prenatal vitamins’ and ‘baby’s names’? Or have bought a book about pregnancy? Or signed up for Amazon Mom? The interesting part is that not only Amazon predicts this one customer’s behavior, but also captures other good targets who might fall outside segment parameters, such as fathers-to-be, or friends and family of expecting parents.

By tracking everything customers do, can begin to compile e-mail marketing campaigns that really resonate with customers at an individual level.

A single call to action

Amazon’s e-mails are generally very specific and direct. Take the following e-mail which is an example of the sort of email you will regularly receive after buying a book on your Kindle. They send you an email to ask for review of the book you have purchased. As you can see, there isn’t much else you can other than click through and review the book!

review

This email only works because of its highly targeted nature. Rather than a blanket send, they segment their database by people who have recently bought certain books.

After clicking the link, you are taken to another simple page that looks like this:

review-screen

On this page, you can do nothing except rating the book. This is a brilliant example of keeping things simple.

Using series campaigns

Another thing Amazon do well is setting up series of e-mails. They are not afraid to e-mail their customers. It is important to get the frequency and timing right for e-mail campaigns.

Amazon’s tactic is to not only send an e-mail a few hours after a customer abandons the cart but another 24 hours after that. This can increase conversion ratio by 50% or more, just by adding a second e-mail.

As we can see from the example below, Amazon doesn’t mind working persistently when they think they are onto a good thing. Each of the e-mails below is targeted toward DVDs or Electronics Deals after customers browsed for digital cameras.

series

Therefore, the experiment with more frequent and series campaigns is an important step in e-mail marketing. Vary the e-mails, make the content interesting and useful and be prepared to reach a ‘maximum’ are the three rules Amazon has always followed.

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17 thoughts on “Amazon’s fantastic e-mail marketing

  1. I feel that this strategy is widely used by ecommerce sites these days, every time I log onto Ebay or Asos, I get a list of recommendations based on recent purchases. As much I feel targeting consumers can (in some aspects) offer a win-win solution to the consumer (providing personalised recommendations) while boosting sales for businesses. This technique tends to make me feel uncomfortable due to privacy concerns. I question the spyware and tracking software, where are the limits to this? How do we know what they are seeing and what they are not? Who or what body is regulating this activity? The other issue is recommendations are based on previous purchases, and not predictive of new or potential purchases, so then I would get a flood of targeted e-marketing based on a product I do not need anymore. With this in mind, ecommerce sites can still do very well for themselves, depending on the demographic, take for instance, millennials have been said to care less about privacy concerns (see Mashable). I feel there are pros and cons to behaviourial targeting. There is a fine line between targeted marketing and invasive marketing which some consumers may find bothersome.

    Reference:
    http://behavioraltargeting.biz/behavioral-targeting-pros-and-cons/

    http://mashable.com/2011/04/26/behavioral-targeting/

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  2. Great Post,

    Ive definitely noticed this targeting being used extensively online. I only need to log into my iTunes, Facebook or YouTube accounts to find advertisements seemingly targeted to something I was researching yesterday. If I was looking at flights, technology or consumer goods, it doesn’t matter, the advertisements will be there.

    A quick web search reveals that these services are tracking web activity of users on both their website and other websites through clever use of HTTP cookies. “Critics call this spying. Advertisers call it targeting.” – Business Insider

    I’m not sure how I feel about companies spying on me but I agree with your sentiment “track absolutely everything customers do, data is power.” Marketers would be insane not to capture and utilize this data because if they don’t, someone else definitely will!

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  3. Very interesting post.Thank you for your sharing.

    I totally agree with the post’s title-Amazon’s Fantastic E-mail Marketing.It is a great example to show how segmenting works in business management and marketing development.The goal of Amazon is to focus on segmenting its customers online and building a remarkable customized for each consumer.As all we know,customer segmentation is often based on clients’ demographic information,which can be made full use of by companies to make marketing strateies.Amazon has a complex technology system to manage its customers’ database which can be used for segemeting as well as monitoring the visitors and their behaviour.To take the following e-mail is an example of how this marketing strategy works.

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  4. Good job…
    Seriously Amazon’s has Superb E-mail Marketing.
    1) Responsive Design- Ecommerce site like AMAZON running antiquated responsive designs.

    2) Fast-Amazon site, the load time is vital. Load time can make the difference in a visitor adding a product to their cart or just leaving.

    3) Personalization- Personalization allows Amazon merchants to welcome return visitors by name, show special pricing, and even show country-specific content on the first visit.

    4) Lifetime Value- Amazon is focused on a quick, efficient transaction. Today that is a given to get the first order. Amazon is smartest marketers and brands are focusing on the lifetime value of customers.

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  5. As a a customer of Amazon, I love nothing more than receiving their emails and getting a shortlist of whats highly recommended for ME. I believe this type of CRM is the way forward for businesses. Tell me what I need/want, make it easy for me to make a purchase and deliver it on time, fuss free. What better way to shop as a consumer and to build a strong marketing presence for a brand…

    Great post.

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  6. Amazon has certainly had great success with this strategy – and I agree – data is powerful to understanding your market and what they want. With more consumers being time poor it does make it a fuss free and easy way of shopping. Seems to be the way of the future – at least for certain markets.

    As a consumer though I like to manage who I receive emails from and how many. At one stage I was receiving 30-40 emails from different retail outlets every day. These were the result of the loyalty cards. I found it all too much information and ended up unsubscribing to all of them – so to me (and granted I am of the older generation) a targeted email will only work if it isn’t overdone. But as someone who is time poor when it comes to Christmas and birthday shopping I would certainly value a site like Amazon to make the shopping quicker and easier.

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  7. I rarely open the emails from amazon – i see the title ‘kindle specials’ and straight in the junk box i’m afraid. As with the above comment, I receive way too many emails from retailers and will RARELY read any of them. However, I do like the recommendations presented to me directly after a book purchase. If i’m in the shopping ‘zone’, I’ll pay attention – if i’m not…DELETE.

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  8. Excellent post. Amazon is a very good example of how information is king! The information that Amazon gather from its subscribers are used to not better align their offering to the customer but also introduce the customer to new products that might appeal to them. One of the flaws with solely relying on this form of data gathering is that you expect only one user to be using that account at all times. Unfortunately this is not always the case. I’ve ordered make up for my wife on my account previously but do not necessarily want to hear about the latest offers from MAC everytime I log in.

    Secondly another worthy mention is how Amazon have also done well to simplify the online shopping experience, this also implies a progression to help older users familiarize themselves with shopping on Amazon.

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  9. Great post. The way that Amazon get direct access to their market via email is a simple and very effective 1:1 way of marketing. Amazon are leading the way in Internet retailing that is opening doors to all different kinds of buying choices for consumers.

    The rise of other sites such as airbnb and TripAdvisor is allowing sellers to get access quicker and more directly to markets. Also, it operates on a low cost, global scale, which in turn opens up a whole world of opportunities for buyers and sellers. At the end of the day, more choice and lower cost is a great outcome for the everyday consumers.

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  10. Predictive shipping does sound fantastic, Amazon shipping an item to you, before you actually order it, now that’s very smart. What happens is that products would be sent to fulfilment centres near the customers most likely to purchase them, before customers even order them.

    So, assume an item arrives on your doorstop before you clicked ‘order’, if the cost of returning the item exceeds the cost of the item, their patented algorithms may make a gift of the item, as a sign of good will. This will make a happy customers, even happier.

    There are many pitfalls for this technology, where an item may be totally inappropriate, examples given are like delivering a DIY pack to someone who has already died, or kids toys to bereaved parents.

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  11. I must agree that Amazon does seem to have mastered the concept of email marketing. I’m a great fan of amazon and use the site to purchase just about anything: from engine oil, to diapers, to my marketing textbook. I do this because amazon simply makes it easy, timely and cost-effective to order these things online and have them delivered to my door.

    But like many users, I do find the excessive emails that they send me extremely annoying and to be honest I do find it scary that everything I do on the amazon site is carefully monitored and used to “enhance customer experience”. I feel, like many users, that this is borderline invasion of privacy and ask myself where the limits are set? I bought a nail clipper on amazon about a year ago and have since then received at least 10 emails asking if im interested in nail clippers and other complimentary products! When is it going to stop?

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  12. Great Post. It is very clear that Amazon have a very tailored segmentation strategy. They clear understand the market place and obtain real time data on customers perspectives to assist with their email marketing campaigns. Given they have the systems to accurately and clearly track consumer interests, recent online searches, previous purchases etc. they have been able to adopt a strategy to target products within their catalogue to multiple different segments with great impact and accuracy. As an Amazon customer myself I am always very interested in what recommendations they have for me on a day to day and week to week basis. Whilst it is close to an invasion of privacy my interest remains sufficient such that I will not ‘unsubscribe’ Amazon because from time to time I do purchase some of use and interest to me……

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  13. Thanks, very good post.
    Additional summary for Amazon:
    As an American based eCommerce company, Amazon he provides an online retail platform that enable merchants to trade their wares online. Then, the market segmentation is the first step in the process of segmentation, targeting and positioning.
    Through market segmentation, the firm will be able to identify the most effective marketing strategies for different markets. Market segmentation will enable Amazon to define and understand the characteristics of its customers. Thus, Amazon will know the market approaches that can best appeal to different market segments.
    The advantage is that targeting will enable the Amazon to channel its resources and activities to market segments that present the best opportunities. Different customer segments have varying needs and characteristics. Targeting will also enhance the effectiveness of Amazon’s marketing activities. Two main strategies for positioning include; differentiation and cost leadership.The firm positions itself by meeting the customers’ needs in a unique way.
    However, the use of “Track everything customers do, Predicting future purchasing behavior, A single call to action, Using series campaigns” as their STP strategy is a fantastic way in eCommerce business.

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  14. Amazon’s email marketing is a great way to get their customers to buy more products from them. I like the way when you buy a certain product, say a comedy dvd, when they send the order confirmation email, at the bottom of the email, they mention other comedies which they think one would be interested in based on what has been purchased. I find that to be a smart way of not only informing customers about what other products they have available, but also boosting their sales by getting customers to buy what they wouldn’t have thought of if they hadn’t been reminded that the particular product was available.

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  15. I agree that Amazon’s commerce marketing is very good, however I also agree with enewington’s post above in that I think a lot of it gets ignored or in the case of emails deleted. However, if people are out there to purchase then sending them an email with a product they might like is effective marketing strategy. I suppose at the end of the day it is a numbers game, if you send x number of emails and y% of those are looking to purchase something then the more emails you send the more you sell.

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  16. I have some shopping experiences with Amazon this year which were very happy, their after-sale service is quite good. For me,the e-mail system could catch me in there, that is because they had performed an analysis about the customer’s tastes, interest and brand preference through the prior purchase prior to sending each one a different sort. It seemed to bear out that basic market segmentation-strategies are based on behavioural. Effective positioning require you a good understanding of the competing products and the benefits that are sought by your target market.

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  17. Excellent Blog! Most of the companies segment to some extent and they are generally at the macro level segments, but companies like Amazon, Netflix and Pandora take it to another level: micro segments. They target individual customers individually and converting them to a long term high valued customers.
    These companies do micro segmentation in two ways
    Individual leverage: When someone visit these , they are generic—but the more you use them, the more they learn about you and the finer the segmentation gets. Which will , encourages us to use them even more.

    Group leverage: Meanwhile, the more these sites can identify other users like me, the more they can pattern match

    Companies have started segmentation in their email marketing too Rather than sending a generic email to everyone they segment the database and send different emails to different segments,
    I believe email segmentation will increase as the conversion rates increases.

    http://www.inc.com/brian-halligan/audience-segmenting-targeting-your-customers.html

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