What's the ROI on Cart Abandonment?

How is your cart abandonment flow working for you today? If you’re not sure how to answer that question, then today’s newsletter is for you.

Today I’m bringing in another Tiny Texts reader and marketer Siim Pettai to have a chat about cart abandonment flows and share benchmarks and learnings from the many brands he works with.

What’s ahead:

Let’s get into it!

It’s always helpful to get data from fellow marketers to sense check what’s going on in your own program. So today I am sharing notes with Siim Pettai, who manages the retention programs for a number of 7- and 8-figure DTC brands, across home, fashion, supplements, and CPG. Siim writes a clever weekly newsletter on retention marketing and today I picked his brain specifically on cart abandonment flows.

So let’s start with the numbers. What benchmark are you using to evaluate your sms cart abandonment flows? 

“It depends on what you sell and how expensive your products are. But for most brands, if you can achieve 8-10% CTR, and over 50% of those who clicked end up converting, you’re doing a good job.”

What else are you looking for to tell if the flow is successful?

“I prefer ROI over revenue per recipient because with SMS, you have to consider the delivery costs. On paper, you can have a really good revenue per recipient, but if your text has images, and on top of that, you give away a juicy discount, there might not be any profits left.”

I used Siim’s insights to build this interactive calculator. Try this out and see what it tells you about your flow’s ROI.

Back to the interview. Can you share an anecdote about how you improved the performance of an sms cart abandonment flow? How did you do it?

“I once worked with a supplement brand that sent a dynamic product image in each cart abandonment SMS. Although the CTR and conversion rates were good, we ended up seeing a much better ROI just by switching to a simple text-based SMS. That said, if you sell visual products like fashion, the opposite might be the case, so you have to be very intentional with using images and test them.”

“I like to use a conditional split based on new vs returning customers. Research shows that about two-thirds of SMS revenue comes from new buyers. For those who have never bought, you can remind them of your welcome discount in the SMS. You can even re-frame the offer as a “mystery discount” and increase click rates. This removes the need to offer a new discount. Automatically applying the code is also a good idea.”

I got a few important ideas from this interview with Siim:

I did a double take when this LinkedIn post appeared in my feed this month. Is it illegal to send more than one cart abandonment message? I hunted down the answer, with help from the BD team at Postscript.

The answer: Sending a cart abandonment flow with more than one message is not illegal but it is a violation of carrier (Verizon, T-Mobile) policiees. The carriers require that “all automations related to abandoned shopping carts and abandoned checkouts should: Be limited to only one message. Send the message within 48 hours of the trigger event.”

The penalty: Carriers will require non-compliant senders to be blocked from sending messages. Personally I don’t know of any instances where this has been enforced. My suspicion is that a subscriber would have to complain to get noticed by the carrier, and perhaps that has not been happening…for now. More info on this policy here.

And last, if you find the Tiny Texts newsletter useful, please forward it to another SMS marketer in your life!

Thanks for reading and see you next week!