How CalMac Ferries Leveraged Legitimate Interest to Enhance Email Marketing Results

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Why Legitimate Interest Is a Game-Changer for Email Marketing

An approach grounded in strategy will help you set up an appropriate acquisition programme using legitimate interest to contact potentially motivated customers. 

Holistic Email worked with CalMac Ferries, which provides passenger and cargo services to and amongst the islands off the West Coast of Scotland. The company wanted to update its use of email marketing to drive bookings and revenue.

Discovery Phase: Uncovering Opportunities

How CalMac Ferries Underused Its Customer Database

As part of our discovery process, we learned that the company underused its customer database because of the way it handled opt-ins to email communications. To increase its email database, we worked with the company to establish the following objective:

Objective:

To enhance the size and engagement of the marketing database by leveraging GDPR’s Legitimate Interest provision and capitalising on the significant potential of email marketing.

Why We Chose Legitimate Interest for Growth

Exploring GDPR’s Legitimate Interest Provision

Based on the findings of an earlier client study, we believed this strategic use of legitimate interest would grow the addressable database for our client.  

In examining the comparatively low number of our client’s customers who had opted in for marketing messages, we saw an opportunity to use legitimate interest to grow the company’s email marketing base.

Key Insight: The Power of Email Subscribers

• Only 8.73% of the company’s database of customers was covered by permission for marketing. However, that 8.73% contributed 37% of the total revenue and 35% of transactions.
• However, over one year, this email segment consistently outperformed the non-email segment: 
  • Email subscribers generated a 9.09% increase in Average Order Value (AOV).
  • They showed a 677.77% increase in the average annual number of transactions.
  • Their Customer Lifetime Value (CLTV) was 748.50% higher than the non-email segment.

Our hypothesis: By increasing the number of customers we can email, we will drive more transactions and revenue over the ensuing years, as marketing to customers via email encourages both increased numbers of transactions as well as increased average order value. 

Note: As of publication the opt-in structure is in an extended testing period. However, I can share the process we used to build an opt-in programme based on legitimate interest.

Addressing the Challenges

Breaking Down Barriers to Database Growth

Challenge 1: Opt-in Process

The default setting in the registration and purchase process was a pre-selected option to decline marketing communications. Customers could receive messages relating to bookings, travel times, alerts, and other transactional messages but not special travel offers or information about the company’s services or destinations.

People tend to accept defaults as a recommendation. They are, in effect, choosing not to choose. Switching to an unchecked opt-out box that customers would need to tick to stop receiving marketing materials would increase opt-ins from new customers.

Note: This procedure is not the same as an automatically checked opt-in box, which the customer would need to uncheck to stop messages from coming. GDPR and many other agencies governing personal data use and marketing messages oppose this method. It remains legal in the United States. However, many new state data-privacy laws prohibit it, and courts in general are beginning to frown on this method.

Challenge 2: Guest Checkout Limitations

The checkout process did not give customers who used the guest checkout process the opportunity to grant permission for marketing messages. This further limited the database’s marketable segment.

Strategic Initiatives for Success

Adopting GDPR-Compliant Marketing Strategies

Tactic 1: Using Legitimate Interest at Key Touchpoints

We relied on two key elements to increase the number of marketable customers:

As I mentioned earlier, GDPR allows companies to use and process personal information if a “legitimate interest” exists through a business relationship. In this case, it would be customers who purchased travel and other services with our client. You can see here how our strategy considered this tactic as part of an overall plan. 

By implementing legitimate interest at critical customer journey touchpoints, we aimed to significantly expand the portion of the database available for marketing without compromising customer trust or legal compliance.

The company’s previous success with legitimate Interest in telephone support and bookings provides a successful model for its application across other customer interaction points.

Tactic 2: Optimising Opt-In Settings

Other insights: We based much of our strategic planning for this customer on what we know about email marketing and its ability to generate revenue and build engagement against seemingly overwhelming odds. Here are two that undergirded our planning:

•     Brand Engagement: Email acts as a push channel, enhancing brand visibility and driving customer actions across other channels like search, website navigation, and in-store shopping.
•     UK DMA Insights: The 2023 Consumer Email Tracker study highlighted email’s role in influencing consumer behaviour beyond direct responses. Email-initiated actions contributed significantly to brand interaction and sales.

Tactic 2: Optimizing Opt-In Settings

We expect switching to an unchecked opt-out box will generate significantly higher opt-ins. This approach aligns with psychological studies showing that individuals are more likely to accept default settings, particularly when decision-making is complex or unclear. 

Why Email Marketing Delivers Results

The Role of Email in Driving Customer Engagement

Brand Visibility Beyond the Inbox

Email acts as a push channel, enhancing brand visibility and driving customer actions across other channels like search, website navigation, and in-store shopping.

Insights from UK DMA’s 2023 Study

The 2023 Consumer Email Tracker study highlighted email’s role in influencing consumer behaviour beyond direct responses. Email-initiated actions contributed significantly to brand interaction and sales.

Our takeaways

Transforming Email Marketing for Sustained Growth

Our strategic intervention in developing this business case for CalMac Ferries sets the stage for a robust increase in the company’s effective use of its marketing database. By adjusting opt-in settings and leveraging psychological insights into consumer behaviour, the company will transform its email marketing into a powerhouse channel for sustained revenue growth and customer engagement.

Key Lessons Learned

• Switching to unchecked opt-out boxes increases opt-ins.
• Leveraging legitimate interest responsibly grows email databases.
• Email marketing remains a high-impact channel for driving transactions and boosting customer lifetime value.