WHITE PAPER DECEMBER 2009

REAL-TIME MESSAGING:
Customer Engagement 101

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Marketing As Usual. Not A Chance.™

Executive Summary
In an age when consumers are able to interact in many channels and receive relevant information twenty-four hours a
day, seven days a week, marketers must capitalize on each and every interaction; real-time messaging is the tool to do just
that and more. As a customer engagement vehicle, real-time messages deliver immediate one-to-one communications
that are targeted, relevant and timely.

Epsilon research shows that consumers around the globe are savvy email users and expect email marketing messages
to be based on their past purchase behavior as well as stated preferences. Taking this concept one step further, these
targeted messages should arrive in an inbox at the exact moment when a consumer is already engaged with that brand. A
scheduled batch-and-blast approach does not generate the return on marketing investment that a Real-time Messaging
(RTM) campaign can produce for today’s email marketer. Thus, marketers should strive to send a million messages to a
million customers, instead of one message to a million customers.

Real “Timely” Messaging and resources for an immediate follow-up message. The
most effective follow-up messages are timely and relevant,
In the simplest terms, real-time messages are a mix
and they foster a level of trust between the sender and
of transactional, operational and triggered messages
recipient. Further, the relevance of the message is depen-
considered time-sensitive or event driven such as alerts,
dent on where the user is in the purchase cycle, and on a
reminders, purchase confirmations and notices. These
broader level, where he/she is in terms of the overall buy-
messages establish a timely and relevant dialogue with
ing market. Marketers who craft those messages with an
customers based on their actions.
eye on lifetime customer value also stand a better chance
of long-term success.
The most effective real-time messages include carefully
tailored marketing content that not only benefits the
Types of Real-time Messaging
marketer, but also provides value to the customer all
while conforming to CAN-SPAM requirements. (For E-Commerce „ Welcome/registration confirmation
guidelines for transactional emails that include com- „ Order and service confirmations
mercial marketing content, please see Appendix A.) „ Shipment confirmations and status updates
„ Product registrations
With a core message focused on transactional details „ Ratings and reviews
or important notifications, a real-time message should „ E-ticket and reservation confirmations
also feature ancillary marketing information specific to Account Updates „ E-statements
the recipient. This strategy raises overall customer „ Registration and account information
satisfaction, improves brand recognition and increases confirmations
conversions. „ Billing and payment notifications
„ Cancellations, refunds and rebates
Consumers are accustomed to transactional communi- „ Status notifications
cations from marketers, just seconds after a transaction „ Profile update notifications
or interaction. Transactional messages are typically the
„ Failure notifications
most opened messages. The true test of a real-time mes-
sage is the immediate impact and perceived relevance by Other „ Customer service messages
the recipient. When a consumer shows interest in a spe- „ Information requests
cific product or brand, effective marketers need the tools „ Password reminders/resets
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 Customer loyalty starts with and is maintained by consis-
tent branding; customers who feel that they’re valued will
reciprocate. Thus, real-time messages are not only cross-
sell and up-sell opportunities, but they are more impor-
tantly engagement vehicles.
Real Life Examples of Real-time Messaging
One Epsilon client, a retailer of recreational equipment,
outdoor gear and clothing was utilizing an IT-managed
internal system to send transactional emails to its
customers. These emails were comprised of purchase
confirmations and account status updates. The messages
were sent as plain text emails, lacking personalization
and branding elements. Since they were being de-
ployed from a system managed by IT, response behaviors
such as opens, clicks and delivery status were neither
tracked nor integrated into the retailer’s mainstream
digital marketing reporting and analysis. Clearly, there
was a major lost opportunity to engage customers at a
time when they were paying attention and their wallets
were open.
Integrating Marketing Programs into
Transactional Messages Serves Multiple Business Benefits
Fig.1: Benefits of Including Marketing Content in Transactional Messages
Increased revenue
Increase brand recognition
Increased customer satisfaction
Lower call center volumes 23%
Decreased burden on support 21%
None, we haven’t seen any benefits 2%
0% 20% 40%
Percentage of E-mail Marketers
© 2008 JupiterResearch, LLC
To improve their marketing effectiveness and take
advantage of this customer interaction opportunity,
Epsilon helped this retailer incorporate a real-time mes-
sage approach to email marketing. To begin the pro-
cess, the marketing team took over the responsibility of
communicating with customers following a transaction
to enhance the one-to-one dialogue, engage custom-
ers and drive incremental revenues. Once the trans-
actional communications streams were migrated to
real-time messaging, the retailer was able to expand the
use of the transactional emails to include highly relevant
messaging and product offers that were closely related to
items that had been previously purchased.
Additionally, the transactional emails were leveraged
to increase customer engagement levels by soliciting
product reviews and other testimonials. These emails
featured high quality HTML graphics and dynamic
content to reinforce branding as well as personalization to
increase relevance. They were deployed within fractional
seconds and received in real-time in the user’s inbox
creating an immediate connection, confirmation and
communication. Throughout the process, the marketing
team was able to analyze the level of engagement with
these new emails, track the results and report both to the
team. This feedback allowed the retailer to modify strate-
gies and test messaging based on response rates.
60%
This is a key benefit and resource for marketers – the
54%
ability to measure campaigns (in real-time) that previously
50%
garnered zero visibility or insight.
After just six months of a real-time messaging strategy,
the retailer experienced significant cross-sell and up-sell,
producing over $3 million in additional revenues.
Another immediate result was a noticeable reduction in
call center service costs. Customers who previously called
to obtain order status information were receiving these
60% 80% 100% messages in a valuable format.
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With the advent of new API technologies, key behavioral and customer
preference information such as abandoned shopping carts, landing page
interaction, purchase cycle information and other touch points, will
increasingly be available to marketers in real-time.
Customer Behavior Drives Real-time Messaging
Most marketing messages today are intended to produce di-
rect sales, and are designed to reach a large number of
customers. Real-time messages, however, allow for more
flexible content, like time-sensitive, focused and brand-
oriented communications. Further, an effective real-time
message does not merely confirm an online purchase. It
could also provide links to surveys or follow-up content
with offers or related products that present additional
buying opportunities. Real-time messages represent a
true one-to-one correspondence based on customer data
and information. The most successful marketers gather
and store important data about each individual consum-
er - by establishing a preference center, monitoring past
behavior and browsing habits and incorporating trend
information.
Victoria’s Secret offers a textbook example of
effective real-time messaging: Timing, customer
freedom of choice and personalization.
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Marketers need to understand that each customer pur-
chase is meaningful. Purchases are directly tied to cus-
tomers’ interests and likely future purchases. Therefore,
following a purchase, a real-time message should not only
confirm the purchase, but also provide additional con-
tent directly related to that purchase. And in the future,
that same information will remain relevant. Follow-up
is everything.
The ability to drive messages that leverage the immediacy of the
underlying data will provide marketers with significant opportunities.
Integration is the key driver.
Three Keys to Real-time Messaging:
Recency, Frequency and Monetary Value
There is a strong link between real-time messaging and
the three-pronged marketing technique that measures
recency, frequency and monetary value. A real-time
messaging campaign may be built around troubleshoot-
ing a specific customer behavior – like shopping cart
abandonment or a general reluctance to make any online
purchases. By examining how recently a customer has
purchased (recency), how often they purchase (frequency)
and how much they tend to spend (monetary), marketers
can better determine how to communicate with these
customers based on these behaviors.
Far too many marketers tend to overlook the opportu-
nities of analyzing these three factors. Abandoned cart
scenarios provide marketers with a great opportunity to
help convert browsing into actual purchases. It is critical
that messages include content that drives conversions,
while not scaring customers off by revealing too much
knowledge of their recent activity. Consumers do not like
to feel like they are being watched or monitored. Savvy
customers will realize it is not purely a coincidence if
they receive a real-time message right after they have
abandoned a shopping cart.
If a customer already received a message from the same
brand on the same day, that may produce an unfavorable
response. While a real-time message related to an aban-
doned shopping cart can be effective, it is not always the
best opportunity to reach out to customers. All infor-
mation and data should be utilized to determine the
best approach.
Marketers who can leverage abandoned shopping cart
campaigns often rely heavily on product images to
reinforce the messaging. In a clever email from DSW,
the customer sees shoes literally “running away.” The
strong imagery instantly suggests that those shoes that are
“escaping,” are also taking perceived value along with
them – away from the customer.
DSW gives its customers a second chance.
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The primary reason marketers should focus on increas-
ing real-time message volume is that it allows them to
better engage customers at different stages in the
purchase lifecycle. There are many different aspects of
real-time messages – from the initial welcome message
to purchase confirmation to expiry and change of itiner-
ary. Understanding the attitudes and behaviors at each
stage for each individual customer, will allow marketers
to take advantage of this outreach to better target and
improve interactions.
“Real-time messages are not limited to just one aspect of the
purchase cycle; they’re not super niche.”
Kevin Mabley,
SVP, Strategy and Analytics Consulting, Epsilon
Trigger Happy
If a consumer starts a search or begins a purchase process,
but fails to complete it, a real-time messaging strategy can
produce positive results. Other opportunities to reach
customers in real-time are meaningful changes or events
– such as the arrival of a financial statement, a birthday,
an upcoming contract or a notification from a points or
rewards program. These are referred to as “triggered”
message campaigns.
Triggered message campaigns, like the one from
Points.com, leverage a customer engagement oppor-
tunity. A recipient likely expects to receive regular
monthly billing or balance information. The messaging
can then provide the customer with interaction
opportunities that drive traffic to the website and
encourage certain behaviors. In addition, there is an op-
portunity to interact with the company or brand through
social media – such as Twitter and Facebook.
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In the Points.com example, the Member Status box Where Do We Go From Here
reminds the user of some of their stated preferences or
Performance of real-time messaging indicates that it will
behaviors like email/contact information and favorite
continue to gain popularity, receive high ROI and be an
programs. This is front and center in the messaging so if
integral part of online marketing. Loyalty hinges on
the customer’s preferences have changed, they can easily
perceived value; a customer wants to feel both appre-
update their account.
ciated and understood. A marketer’s greatest asset is
the ability to take customer behavior and analysis to
the next level – to engage, evaluate and study unique
customer buying habits and react based on that infor-
mation. Effective RTM messaging starts and ends with
the notion of influencing and ultimately earning the
trust of each individual customer.

Contributors:
Kevin Mabley,
SVP, Strategy and Analytics Consulting, Epsilon

Jason Dodge,
VP/GM, Strategic Database Services, Epsilon

Andrew L. Caso
VP, Product Development

David Banks
Senior Product Manager

Successful marketers will collaborate with ESPs that

provide the systems integration tools and services to
develop solutions that extend their investments in CRM
systems. This, in turn, insulates them from complexity,
risk and mitigating labor costs.

Real-time triggered campaigns can provide a significant

return-on-investment. In fact, some studies show that
they may yield nearly 10 times the ROI of more traditional
batch messaging. The message is relevant and timely and
provides important information for the recipient based
on their actions.

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 Appendix A
CAN-SPAM and Guidelines for Transactional Emails that Include Commercial Marketing Content
If you are a permission email marketer, you are familiar with the CAN-SPAM Act of 2003 which
delineates between two types of emails – commercial and transactional. Under CAN-SPAM, you
can lawfully include commercial content in a transactional message and still have that message pass
CAN-SPAM requirements provided that the “primary purpose” of that email remains transactional.

Key elements in determining the primary purpose of the email are:

„ The subject line. Is it referencing the transactional or commercial information?

„ The content. Which is first/most prominent, the transactional or

commercial information?

There are no blanket “best practices” for the ratio of transactional vs. commercial content, but below
are some sound guidelines to meet the requirements:

„ Always keep the subject line completely transactional with no mention of

commercial information.

„ Place the transactional components of the message at the beginning of the copy,
preferably in the preview pane. Marketing related-content should not be the
main focus of the message.

„ Pay attention to the tone of the overall email. Will readers feel they’re being
marketed to or feel this is a relevant message about their previous transaction
with a relevant, but unobtrusive, advertisement in it? If it’s the former it’s
commercial; if it’s the latter, it’s transactional.

Why is this important?

If you designate customer service email as commercial and someone unsubscribes, you won’t be able
to send him/her another commercial message. So the next time he/she submits a question via email to
customer service, you’d have to respond with a transactional, not commercial, email.1

1
Companies should always review any new transactional email content and layout with their internal legal team for approval.

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For More Information
Epsilon Corporate Headquarters
4401 Regent Boulevard
Irving, TX 75063
1-800-309-0505
info@epsilon.com

Marketing As Usual. Not A Chance.™