Karl’s KPIs – Black Friday and Cyber Monday subject lines – how low should you go?

Karl Bond

Karl’s KPIs is an on-going series of articles from Data Analyst Karl Bond

This article is part of an on-going series from Data Analyst Karl Bond in which he digs into some interesting email stats based on insights from Experian’s ESP platform.

Santa Claus may be the busiest man in the world in the run up to Christmas but I’m fairly certain us email marketers must give him a run for his money. Especially now Black Friday and Cyber Monday have become such mainstays of the UK retail calendar.

Because there’s a lot at stake for marketers during this period (especially in retail) it’s important to look back at the year before and see what worked and what didn’t. With this in mind a topic I’ve been asked a lot about recently regards the affect discounts have on email performance.

More specifically, ‘at what point do % discount rates in subject lines stop affecting change in open rates?’

So we can all agree that Christmas is an exceptionally busy and important time of year for marketers and it’s getting busier every year. The number of emails sent between Black Friday 2014 and the January sales 2015 increased by 11% when compared to 2013.

This volume is driven by activity on key dates. Black Friday was huge in 2014 – with email up 11% on the previous year and 72% on the rest of the festive period. That’s 82% higher than the average for 2014…

Many people sign up to newsletters and marketing in order to get first look at discounts and special offers. Discounts are also the major driver of events such as Black Friday and Cyber Monday (what such days are most famous for) with 36% of emails sent on these days containing an explicit discount in the subject line. The key question however is ‘how much should marketers discount?’

You may think that the more you discount the better uptake. Not necessarily – yes ridiculous reductions will probably result in more sales, but it’s not proportionate and in some cases it would be beneficial to reduce the discount.

To answer this question I looked at roughly 6,500 email subject lines sent to around 150 million email addresses on Black Friday and Cyber Monday. The result? A hypothesis that suggests if you offer more than 40% off you’re probably giving away more than is necessary.

The aptly named ‘how low should you go’ graph below shows unique open rates by the percentage discount offered in the subject line.

 

Christmas discounts

Emails sent with a subject line offering 40% off were by far the most likely to convert into a transaction

Interestingly, it suggests there’s minimal difference in unique open rate between emails that offer 40% and those that offer 60%+. What’s more, open rate open rate actually tails off quite dramatically. Emails sent with a subject line offering 40% off were by far the most likely to convert into a transaction (according to our sample).

It’s interesting to compare campaigns that have 30% off in the subject line with those that offered 50% off. There were roughly 30 million emails of each kind sent but the 30% ones were 150% more likely to be clicked and 800% more likely to convert.

Of course, it depends hugely on the product, industry and brands concerned whether this will apply to you. This regression data (as it’s known) doesn’t prove that lower discounts are better (far from it) it does however challenge the assumption that higher discounts drive engagement.

Why would that be is a valid question and I can only surmise that emails with discounts higher than 40% in the subject line become a victim of their own generosity. Perhaps the recipients simply believe it’s too good to be true with more people deleting them or dismissing them out of hand as spam. Like those websites that’s say ‘congratulations – you’re the 1,000,000th visitor’ – you win a prize, just fill out this form to claim it.

Likewise – if you’re offering a stupendously good deal one might ask the question ‘where’s the catch?’

Of course – don’t take my word for it. I recommend you test this hypothesis with structured A/B tests in a bid to avoid unnecessarily aggressive discounts that not only dent the margin on the item being discounted but also run the risk of cannibalising revenue from other areas of the business.

Experian Marketing Services is the leading global provider of customer insights, data quality and cross-channel marketing. We help organisations intelligently interact with today’s empowered and hyper-connected consumers.

By helping marketers identify best customers, find more, and then coordinate seamless and intelligent interactions across the most appropriate channels, Experian Marketing Services can deepen customer loyalty, strengthen brand advocacy and maximise profits.