How An Online Music Teaching Company Harnessed The Power of E-mail Automation & Behavioral-based Marketing to Increase Conversions.

Jermaine Griggs

Founder

Hear & Play Music, AutomationClinic.com

How An Online Music Teaching Company Harnessed The Power of E-mail Automation & Behavioral-based Marketing to Increase Conversions.

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Jermaine Griggs

Founder

HearandPlay.com

Jermaine Griggs, 29, is a minister, musician, entrepreneur, and public

speaker. Having grown up in the inner city of Long Beach with just his

mom and sister, he always envisioned life on the other side of the

tracks. At 16, he started Hear and Play Music, an instructional music

company specializing in teaching piano by ear. With only $70, he

bought the domain name HearandPlay.com and launched the

company that would not only change his life but hundreds of

thousands of musicians around the world through his books, DVDs,

and online training courses.

Today, more than two million aspiring musicians download his online

lessons every year, and over 301,700 loyal students receive his

regular newsletters. Having seen his company grow from a few

hundred dollars a month into a multimillion dollar business, he now

shares his story with entrepreneurs all over the country and recently

launched AutomationClinic.com in 2012 as a place to share his marketing automation philosophies and strategies.

@realhearandplay

Who I Am (The Quick Version)

• Grew up in Long Beach, CA

• Started Hearandplay.com at 17 in 2000 with $70

• By 19, we grew to mid-six figure business

• By 21, surpassed seven figures

• Today, our total sales exceed eight figures

• Having bootstrapped, I attribute much of success to automated and personal e-mail marketing (relationship with customers).

In This Presentation

• 5 ways to know if you’re using CRM system as a “glorified autoresponder.”

• How to use internally and externally-collected data to personalize experiences, custom-tailor delivery and nature of offers, and create seemingly one-to-one communications.

• My 3 favorite letters and how they’ve led to the constant growth of repeat purchases, transaction sizes, and overall customer value.

• What Amazon taught me about Recency & Frequency tracking

Case Study: ME

• Focusing on automated, personalized e-mail marketing increased my lifetime customer value by 416% in 14 months (from $90 to $375+)

• LTV is currently $534.56

• Lifetime purchases (frequency) is 12.46

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LTV

Today:

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Our Transformation Came When…

We stopped using our CRM merely as a “glorified

autoresponder”

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And…

Harnessed the Power of “Behavioral, Personalized

Marketing”

•Having “written in stone” campaign steps a user couldn’t influence if they wanted to.

– Static follow-up vs Dynamic Follow-up

– What’s your S2D (Static to Dynamic) ratio?

•Using time as primary determinant of follow-up communications

– [initial e-mail] + [3 day delay] + [2 day delay]

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“Glorified Autoresponder” Litmus Test

•The “Merge Mindset” –Personalization is more than merging in data (i.e. – “learning to play [jazz]”)

•Monotone “one to many” language

–Vs. Conversational tone driven by what you know about them (putting a human layer over the 1s and 0s – “data”)

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“Glorified Autoresponder” Litmus Test

•The “WIFLI” Way –Offers sent at arbitrary intervals (the “When I Feel Like It” approach) vs when the prospect is ready.

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“Glorified Autoresponder” Litmus Test

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Personalized Marketing is about authentically altering the user experience based on data &

behavior!

• Capturing and using data to increase effectiveness of campaigns (internal vs external)

• Letting what your customers and prospects “do” dictate what you “do” (Goal/Action – Oriented Steps)

• Being driven by the “data”

• A dynamic follow-up system vs static

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Behavioral Marketing

• For every action/inaction, there is a reaction.

• Acknowledgement of past behavior

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Behavioral Marketing

My 3 Favorite Letters

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R F M

• Recency, Monetary, Frequency

• A method for analyzing customer behavior and creating/sorting segments by likelihood to respond.

• Recency – How recently did customer purchase?

• Frequency – How often does customer purchase?

• Monetary – How much has customer spent?

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RFM Defined

• The order of metrics is important – Recency trumps frequency and monetary.

– Often times, monetary is excluded.

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RFM

• CRM is calculating and storing: – Date since last purchase (Recency)

– Days since last purchase, as needed (Recency)

– Days between purchases: 1st-2nd, 2nd-3rd, 3rd-4th, 4th-5th (Latency)

– Number of Total Transactions (Frequency)

– Number of Product Orders (Frequency)

– Number of Subscription Cycles (Frequency)

– Total Spent (Monetary)

– Total Spent in First “X” Months (Monetary)

– Total Spent in Last “X” Months (Recency / Monetary)

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RFM

• CRM is calculating and storing: – Name of First Product Purchased (Primacy)

– Name of Second/Third Products Purchased (Calculate customer value by purchase order)

– Days between lead and first purchase

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RFM

• This data is being used to alter e-mail communications

– E-mail/actions triggered when “Days since last purchase” exceeds “x”

– Average “Days between purchases” (latency) for each client can be determined and future expiration dates of offers can be generated and acted upon.

– Increased frequency of e-mails as customer becomes more recent/frequent.

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RFM

• This data is being used to alter e-mail communications

– Welcome campaign if number of orders is 1.

– Acknowledgement / “Welcome back” campaign if number of orders is 2.

– Starbucks card when “Total spent” exceeds $x. Cookies when “Total spent” exceeds $y.

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RFM

• This data is being used to alter e-mail communications

– If number of product purchases is greater than x,

but number of subscription cycles is less than y, launch campaign.

– Recency Ladder: Offer discounts based on recency (more recent = less discount / less recent = more discount).

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RFM

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• The Bread Machine Story

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Amazon + Recency

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Amazon + Frequency

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Amazon + Frequency

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Amazon + Recency

In addition to purchase behavior, Recency & Frequency can be used to track:

– Clicks

– Opens

– Logins

– Pages visited

– Form submissions

– Referrals given

– Videos watched

– Reports downloaded

– Consecutive actions taken

– Inbound phone calls

– Actions in specified time 30

Recency/Frequency + Activity

• Recency = Time since [action]

• Frequency = Number of [actions]

• Tracking last clicked/visited page or offer – Dynamically including ads/editorials for last clicked page

in sidebar of e-mails.

• Using recency/frequency to course-correct

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RFM

• Segment serious prospects from the rest

• Allocate more marketing dollars to prospects and clients with higher scores

• Time your promotions when certain thresholds are met

• Reach the right prospect with the right message at the right time

• Give your sales reps more data to work with

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Benefits of Behavioral Marketing

Wrapping It Up: Action Steps

• Collect key pieces of data to get the conversation started

• Use CRM that will allow you to continually add and act upon data and tags in user records

• Build out different paths within the sequence for your most active users to follow (course correction for others)

Wrapping It Up: Action Steps

• Use behavior data to encourage repeat purchases; cross-sell based on last purchases, last pages visited, time on page ranking, lead score, etc.

• Every link or action taken should be tracked with CRM system. Use data to make product recommendations and to present content/offers most appealing to user.

• Don’t be afraid to have 5 “almost” duplicate steps that cater to the exact needs of different segments vs one-size-fits-all.

Wrapping It Up: Action Steps

• Incorporate other marketing channels & multimedia elements: direct mail campaigns, personalized audio, video, post cards, birthday cards, gift cards… especially to hyper-responders.

• Remember: Don’t be afraid to use a personal, conversational tone… even in B-to-B. “Companies are People.”

Thank You