Jeremy Julian

Is Email Marketing Eating your Profits?

August 11, 2016

Email marketing is a powerful and effective tool. It helps build your brand, enrich customer loyalty and increase interaction. However, without careful monitoring and segmenting, that campaign could eat into profits and drive down overall campaign profitability.

Paytronix Systems, Inc., a leading provider of reward program solutions to restaurants, released their second brief in its Data Insights series. It explains that marketers often swallow their profits with email campaigns that target “cannibals,” or guests who would have come in anyway. According to the Paytronix research, these blind campaigns inadvertently discount full price sales that would have happened without the offer.

Could this be something your restaurant is doing?

People walking in through the door is a great thing. But if they were going to come anyway, how strong is the ROI from the campaign? Paytronix Data Insights advises marketers to segment customers into three categories: those who can be motivated to come in for an extra visit, those whose visit patterns are erratic and not predictable, and those who will predicatively purchase with a simple reminder or none at all. Marketing to the third category runs the risk of cannibalizing full-priced sales because the customers would have happily paid full price.

To avoid cannibalizing sales and to increase email campaign profits, Paytronix Data Insights recommends that marketers:

  • Identify customers with the purchase via rewards programs, online ordering identification, reservation identification, credit card transactions, and more to shed light on a large proportion of guest past and predicted future behavior.
  • Centralize customer data in one place.
  • Segment, test, and modify campaigns.
  • Approach each campaign with a hypothesis, test, then improve upon the status quo.

By utilizing data from POS, social media, loyalty and other sources, marketers can build a more effective and profitable email campaign. Marketers are then able to reach their target consumers, build brand engagement and keep loyal current customers happy, activating them as brand ambassadors.

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