The good folks over at MailChimp provided a glimpse at some of the data from 150,000 businesses that use MailChimp. With this peek, they learned that an “abandoned cart series automation produces about 37 times more orders per recipient than a regular bulk email.”
What does that mean for you? That means you need to seriously consider creating an automated abandoned cart series!
Now, bear in mind that this is still a numbers game. That means you won’t get a conversion for every customer you send the series. MailChimp found that with an abandoned cart email series (three emails on average), businesses produced an order for every 43 recipients (in other words, a 2.3% conversion rate). So, if you send the series to 100 folks, you’re likely to get about 2 orders.
Abandoned cart email series produced one order for every 43 recipients. – Source: MailChimp
Use the numbers you have about your business to decide if the effort of creating and setting up this type of series is worth it for you (I’m guessing it will be).
Let’s run through a hypothetical.
Suppose your business has an average order size of $250. You also get about 10,000 visitors per month, of whom 50% (5,000) are folks who already have an account with you and are signed in when they’re browsing your site. Of those 5,000, 600 people create a shopping cart, but 67% of them abandon their cart before checkout.
If you have an automated abandoned cart email series set up, your number of recipients of the campaign that month will be about 400. If your business is like the average of MailChimp’s customers, you’ll get 9 orders from the campaign, or an additional $2,250 in revenue that month. Put another way, that’s an additional $27,000 in annual revenue.
The flip side of this (and where MailChimp derives the 36.9x increase) is in comparison to a simple bulk blast email.
According to their math & data, an email that doesn’t explicitly target customers that have abandoned their cart and provide them with targeted messaging and content to encourage them to complete their checkout (think a standard-issue promotional newsletter) will generate one order per 1,586 recipients that have abandoned their cart that period.
In our above hypothetical example, you wouldn’t likely get any orders from customers that had abandoned their carts that month (not impossible, just not likely). You would need about 2.5 times your monthly traffic in order to generate one additional sale per month. If you look at it over one year, you would generate about $750 in revenue from your “tossing darts at a wall” email approach (3 orders).
$27,000 with an abandoned cart series or $750 without a series. It’s up to you to decide what you think is best for your business.
What Does an Abandoned Cart Email Series Look Like?
Well, that depends on your business and target customer, but here is a default framework that MailChimp suggests. As with all marketing, you should be testing and refining your campaigns to optimize them to your niche.
- Email #1 fires one hour after a subscriber abandons a cart from your store
- Email #2 fires one day after a subscriber abandons a cart, and the previous email was sent
- Email #3 fires three days after a subscriber abandons a cart, and the previous email was sent
That’s it. Three simple emails to what could be a substantial revenue boost to your business.
How Do You Know If The Campaign Is Actually Successful?
To know this, you have to know what customers would have done if they hadn’t gotten your abandoned cart series. Sounds like you’d need access to an alternate dimension, right? Nope, it’s all about creating A/B tests and using cohorts.
With this idea, you bucket your customers into two groups. One you plan to send the abandoned cart emails to and the other those you don’t plan to send the series to. It’s recommended that your cohorts look fairly demographically similar to each other in order to reduce statistical variations. The main way to do this is to randomly bucket customers on the same day. Each day should produce two cohorts of equal size (one gets the series, the other does not).
Once you’ve got your cohorts to a point of statistical significance (or until you’re tired of waiting) you begin your experiments and start observing the results.
If you know the average sales cycle for your customer, you’ll know how long you’ll have to wait to see if your hypothesis was a success. If you don’t know, I’d recommend running the test for about 6 months.
That said, don’t wait to start analyzing the data until the experiment is over. You should be checking on the results on a weekly basis (helps you decide if you should tweak something or if something appears to be broken). What you’re looking for here is if the Customer Life Time Value (CLTV) increased for the group you sent the cart emails to, compared to the group you didn’t send the emails to.
If there’s no increase after the period of time you’ve set to run the experiment, then congrats, your customers would have bought from you anyways! That means no need to fully roll out the email series. However, it’s most likely your series group will have a significantly higher CLTV. That means there’s more easy revenue out there for your business and all you have to do is add the rest of your customers to the series list!
If you’ve got any questions about setting up or testing your own abandoned cart campaign series, let us know! We’re happy to help you and your business become even more successful.