How To Use AI For Your Next Email Campaign — Daniel Budai | How To Craft A Top Email Strategy, Why AI Transforms Email Marketing, What Makes Emails Convert, Why Personalization Is Your Secret Weapon, How To Avoiding List Management Mistakes (#354)

Enjoying the Ecommerce Coffee Break Podcast? Here are a few ways to grow your business: https://ecommercecoffeebreak.com/level-up/

--- 

In this episode of the Ecommerce Coffee Break podcast, we dive into how AI can supercharge your next email campaign.

Daniel Budai, Founder at thebudaimedia.com, shares expert insights on using AI for better email marketing and retention strategies. He explains the role of AI in creative content, segmentation, and data analysis, offering actionable tips for e-commerce businesses looking to boost their email performance. 
 
Topics discussed in this episode:  

• Why AI is revolutionizing email marketing: creative and data-driven strategies 
• What makes effective email segmentation: avoiding list management  mistakes
• How to build a winning email marketing strategy: Daniel Budai's "10 commandments" 
• What defines the perfect e-commerce client: identifying ideal customers 
• Why personalization is your secret weapon: using AI for targeted emails 
• What makes emails convert: balancing content and sales 

Links & Resources

Website: https://www.thebudaimedia.com/
LinkedIn: https://www.linkedin.com/in/budaidaney/
X/Twitter: https://x.com/thedanielbudai
Instagram: https://www.instagram.com/the.daniel.budai/

Get access to more free resources by visiting the show notes at
https://t.ly/th15t

MORE RESOURCES

Download the Ecommerce Conversion Handbook for store optimization tips at https://tinyurl.com/CRO-ebook

Best Apps to Grow Your eCommerce Store: https://ecommercecoffeebreak.com/best-shopify-marketing-tools-recommendations/

Become a smarter online seller in just 7 minutes
Our free newsletter is your shortcut to ecommerce success. Every Thursday. 100% free. Unsubscribe anytime. Sign up at https://newsletter.ecommercecoffeebreak.com

Rate, Review & Follow
Enjoying this episode? Help others like you by rating and reviewing my show on Apple Podcasts. Rate here: https://podcasts.apple.com/us/podcast/ecommerce-coffee-break-digital-marketing-podcast-for/id1567749422

And if you haven’t yet, follow the podcast to catch all the bonus episodes I’m adding. Don’t miss out—hit that follow button now!

Transcript

Welcome to the e commerce coffee break podcast. In today's episode, we talk about how you can use AI for your next email campaign. Joining me on the show is Daniel Budai, Founder at thebudaimedia.com. com. So let's dive right into it. 

This is the e commerce coffee break. A top rated podcast that helps you become a smarter online seller.

Each week, your host Claus Lauder and his guests share what's working right now to grow your store, boost your sales and stand out in a crowded market. Stay ahead in this fast changing world of e commerce and get expert advice you won't find on Google. 

Hello and welcome to another episode of the eCommerce Coffee Break Podcast.

Today we want to talk about email marketing, specifically we want to talk about how to use AI for your next email campaign. For that, joining me on the show today as a guest is Daniel Budai, he is the founder of . Budai Media, an agency helping e-commerce brands to go through retention marketing.

His team has worked with over 170 companies, generating more than 81 billion in extra revenue for their clients like Steger Sports, each to Explore, and Uban. Originally trained in geology. Daniel pivoted to digital marketing in 2016, eventually launching his own agency in 2018. He is also a fellow podcast host at the e-Comm Show.

So let's welcome Daniel to the show. Hi Daniel. How are you today? 

Hey, Claus. And hey, everyone. I'm really happy to be here. 

Let's dive into email marketing. One of my favorite topics. So why do you think that email marketing and retention marketing overall is so important for e commerce businesses? 

Yeah.

Great question. So I talked to. Thank you. You know, hundreds of e commerce, even thousands of e commerce owners at this point, and, uh, I can see that it's a really hard point in their business when they already have customers and probably they are on the seven figure level. They are usually there at this stage.

And, uh, They struggle to retain those existing customers. So they are really good at acquisition to get new customers. But, you know, at some point you will just, uh, you will not have new customers anymore. Everyone will, you know, uh, you saturate the market and all of that. So at some point you will need to retain your customers and they really struggle with that.

So that's where we come into place and that's where we start helping these companies. So that's our focus. And that's why we call it retention marketing, not just email marketing nowadays. 

Now, AI is changing a lot of things in marketing and that applies to email marketing as well. So how is AI changing e commerce for brands in sending emails?

Yeah, so it's super important. Now there is this question, I get this a lot and I always say actually the underlying principles and strategy, it hasn't changed too much because human psychology, it's something that it's been the same for tens of thousands of years. So You know, those elements, principles, they still work.

And I think where AI actually help us more is operations of our marketing and, uh, how to make things more effective, how to figure out things, uh, faster, easier, just become more efficient. And, uh, I usually have separate this into two categories, how we use AI for emails and for marketing activities. So one is the creatives.

We use it for copywriting, something like ChatchiPT or Jasper or these tools, um, or creating good design. We can even generate human faces and humans wearing the product. And those are actually not real humans, not real models. So that's one part creatives. And the other part is data. So we can use smart AI tools and their machine learning that pattern, you know, they recognize patterns in the data.

So we can see things like when somebody is expected to buy, When is the most likely that this guy will buy again? Or, uh, what's the best sending time of an email? Or, uh, we can even predict their gender. So there are many exciting stuff and we can use AI and data for those as well. So I would say creatives and data, these are the two big areas where things just really changed the past two years because of AI.

For our listeners, what would you recommend as a first step to start using AI in retention marketing? 

Yeah, actually, that's a great question, because we can get really complicated here and technical. If I have to choose, I would go with copywriting at chat GPT. And I'm pretty sure many of you you already do it or you experiment with this.

But you can go to chat GPT and, uh, And tell or, you know, just prompt to ChatGPT that I want to write a promotional email. I want to use this discount code. You can add some urgency, scarcity. What's the end date of this promotion? And, uh, ChatGPT usually does a great job to write a marketing email. And, uh, that's where I would start.

And of course, we can get into the tiny details like, uh, you want to fake the tone of voice of the founder or, or, or someone, um, and you want to write the email on behalf of that person and then you can feed, you can feed ChachiPT with previous emails that you already create, and then it will become better and better as the AI tool learns over time.

So there are nuances, of course, and we can always improve. And that's what we do in my team with the copywriters. But I think copywriting is the area where AI just really changed everything. And I started my career as a copywriter, so I really understand it. And it's just really, truly revolutionizing copywriting, I think.

I think what you just said, you have a huge advantage there, because as a skilled copywriter, you understand the basics of copywriting, the psychology behind it, not all of our listeners have that. Now, when it comes specifically to subject lines, because they decide if somebody's actually opened your email or not.

A lot of tools now. offer some AI to come up to subject lines. What's your take on there? Is that something you would use or would you basically fine tune this or come from the side of a copywriter? 

Yeah, great question. I would do what I would do is doing both. And you can, uh, test your copywriter and, and AI.

And actually we also do that. So we run A B tests and we test out which is the better for which brand. And, uh, I would do it because every copywriter is different and, uh, it doesn't depend on their expertise. So sometimes junior copywriters, they come up with amazing subject lines. They just have the knack for this thing.

While. More senior, uh, you know, not always, sometimes AI can come up with a better version. So I will test hardly and, and frequently. And, uh, in our tests, many times AI was the winner. So we couldn't see a clear picture, which one is better, you know, so we still use both AI and human copywriters, but I wouldn't say one is better than the other option.

And, uh, You know, if you just type in, you give a prompt that I wanna come up with crafty, smart, or humorous subject lines, it can come up with really good ideas that you would never think of. And the other thing is, many of us, and I think everyone, we have some creative blocks. If you have a bad day or bad mood or whatever, and even if you drink two coffees, you are, you are still having that block.

So you know, it's just, it's, it's a very emotional thing, right? Good copywriting. So it's just really hard to affect on some days. I really know that. And on those days, AI can really help you. So it can really help even high level copywriters. 

Yeah. As a coffee addictive person myself, um, I understand that after two coffees and nothing is happening, I just stop working because then nothing will come out.

I agree. I agree. 

So you mentioned A B testing, um, I'm interested in if you do A B testing, how do you measure the results of your A B test and how do you make a decision based on that? 

Yeah, yeah, great question. So, um, it depends on the email software, what you use for. So we work with e commerce clients and we mostly use Klaviyo with 90 percent of our clients.

And I think a high level email tool like, like Klaviyo or similar tools, they, uh, does most of the job for you, but of course you need to understand the basics. So. Let's say you want to send out an email to 50, 000 people and then you send variation A to half of them and then variation B to the other half.

So you send out the emails, people start opening it and then clicking it. You need to wait some time to see the results. And the email software, it shows you statistical significance, which is, uh, I don't know how much listeners are familiar with this, but basically it tells you if, uh, basically it tells you how certain the result is, and the golden number is 95%.

If you hit that statistical significance, it means that it's very likely that if you would repeat this test again and again and again. You would get the same result. So that's why we shoot for that number. Uh, the email software measures this number for you, and it tells you if you achieved that significance already or not.

And, uh, and that's what we focus on. Um, I would say we typically focus on open rate as a key PI of an A B test, especially if we test subject lines. And, uh, if we. If we A, B test something inside the email after the open, then we focus on the click through rate of the email because that's what the test affects the most.

So we change the body copy of the email or the images or how many images we use and things like that. Then we focus on the click through rate. So either open rate or click through rate, depending on what you test. And the email software tells you, What's the statistical significance? So how certain that this result is solid and you can replicate it in your other emails, basically.

That's the methodology that we use for A B tests. 

Okay. No, that makes perfect sense. I want to dive a little bit into segmentation and personalization. What are common mistakes that brands make when they come to you and how do you fix that? How does AI fix that? Okay. 

So segmentation, I still trust humans more in that area, to be honest, because sometimes it can get complex, but AI can help us, for example, it can recognize who is, uh, who is a male, who is a female based on their names and their email addresses, and for example, based on that, you can segment out your, uh, your list, or, uh, it can also see who is, uh, unengaged, And, uh, you can also find those people using AI, but besides, I would say it's still really a manual process and we put time and effort into it.

And, um, the most common mistakes. So I think many brands, especially smaller businesses, they just don't. They just don't segment, they just send a bulk email to everyone, same email to everyone. I think that's the number one mistake. And sometimes I can see this, that they over segment. That's more rare, but it can happen, somebody gets too technical, and they just really get lost in the tiny details.

So, you wanna really find the 80 20 of this thing, segmentation. And I think that's where experience is important. And, uh, And with my team, we work with 200 plus companies. So we really know what segments they work, what, uh, drives or what moves the needle. And, uh, we typically use engagement based segmentation or purchase history based segmentation.

And, uh, we segment our people based on these and they receive different emails with different copywriting. 

You just mentioned you work with over 200 companies. When it comes to AI in retention marketing, is there an area where you wouldn't use AI? 

Wow. I never got this question. Um, I don't know. I would use it everywhere.

I mean, yeah, I, I cannot see nowadays a niche. Or industry where I wouldn't use it. I, I, I can see, uh, email campaigns and specific email types where I wouldn't use it because it's just more, um, educational and it's just better to have a, have a real human who writes that copy. Or makes that email, but because of the industry, I don't think so.

Maybe, maybe those industries where it's super high ticket, you know, like some B2B commerce. We just talked to someone the other day who sell 50, 000 items and they don't have a huge list. So AI cannot really learn there much. They have a couple hundred subscribers. I think there AI, yeah, you can use it, but there is no benefit there.

So maybe if you sell something super expensive, then it's less useful, I think. 

Yeah. I mean, AI relies on data and if you only have 100 people in the list, then you're probably better off to do it manually. You mentioned something in the chat that you have 10 commandments of email marketing. Tell me about it.

What is that about? 

So it's 10 commandments of email campaigns. And some of them are quite simple, or I always say it's a simple, but not easy for many companies, while others probably more advanced. So just going through them quickly. So number one, create an actual plan in Google sheets, what emails you will send out the next weeks and months.

Many companies, they just don't do that. They always work for the next day. Number two, segment your list. Properly, we just talked about it. Number three, content and sales. We usually start with 50, 50%. So not just promo all the time and sales, but 50, 50%. Uh, number four would be think about your next upsell segment accordingly.

Number five, consider using, uh, RFM segmentation. This is more advanced. You can look into it. It's called recency. Frequency and monetary type of segmentation, uh, number six, focus on your best selling products. So don't try to sell something super new that you never sold to anyone. It usually just doesn't work out an email.

Number seven, run a sales event at least once a month. For us, it was really a game changer. Even there is no holiday in that particular month. We still come up with an event. We even make up holidays like International Dogs Day and yeah, we just send promo emails, but do it at least once a month. Number eight would be truly consider the tone of voice of your audience.

And, uh, if design sells your product or more, the copywriting sells your product. Number nine, check your engagement metrics per email provider. So in a tool like Levio, you can see how Gmail users engage with your email, and then Hotmail users, Yahoo users, and you will see big differences sometimes. Number 10 would be use a third party tool to track your deliverability.

So we don't really trust these email software tools, we use a third party Software, usually, uh, G Lock app. They are from the Netherlands, I think. And, uh, we use that tool to measure the inbox rate of the actual emails that we send out. So these are the 10 points. And if you really hit these 10, your email campaigns, they will really achieve great numbers, we can get 20, 30, even sometimes 40 percent of total revenue just from email campaigns.

And, uh, they become especially important as your brand grows, you have a bigger and larger list. And, uh, once you have a bigger list, then you will just make more money every single time from these email campaigns. 

It was a short masterclass in how doing email marketing, retention marketing the right way.

So I hope a lot of people will listen to this more than once or read the transcription of our chat today because there's so much gold nuggets in there. Now you said you're working with over 200 companies. Um, who's your perfect customer? Are there specific industries or verticals that you work well with?

Nowadays we really try to filter down. Our, uh, you know, those clients where we can get the best results, they are typically over 5, 000, 000 per year in revenue. It doesn't mean we don't work with smaller clients, but that's the ideal for us because they have the, you know, the database, the email list. They already have enough required clients and we can grow them further.

And most of them, they are in the United States, Canada and Europe or UK and, uh, only physical e commerce. And, uh, yeah, I would say these are the main things and also just having the right mindset. So people are really hungry to grow, ready to invest into growth. They want to work with professionals. We've been doing this, uh, for almost seven years now.

So I really committed to growth as well with our clients. And, uh, Yeah. If anyone wants to work with us or just consult with us, feel free to reach out to me. And, uh, and let's talk. 

What's the, um, usual onboarding process for a new client? How does it work? 

Yes. So if we start working together, then, uh, on day one, I already scheduled a call between the new client and, uh, and our team.

And, uh, there you discuss the strategy, what will happen in the first three months. So we typically sign for three months with new clients. And, uh, We typically activate the first emails by day seven. So I think it's a relatively quick process. And then from that time on, basically, we always work one month in advance.

So we schedule the emails way in advance. And we also help with SMS marketing, loyalty programs, push notifications. So we add all of these channels and not just email marketing. 

You mentioned earlier that most of your clients are already coming as Klaviyo users. Um, If you don't, or if somebody is not using Klaviyo yet, which I cannot think of for a reason why somebody would not do that.

But are you also replatforming them over to Klaviyo? 

Not necessarily. So now we are a Klaviyo platinum partner and soon to be elite, which is the highest level. But honestly, we can see some stores where it doesn't make sense or They have limitations. Klaviyo doesn't work with all e commerce businesses, with most they do, but not with all niches.

And, uh, we can have them with other platforms. So we are not a Klaviyo only agency. We work with OmniSend or even we have matching clients. Um, so, you know, some of them, they are on different platforms, but yes, majority they are on Klaviyo. 

Tell me a little bit about the pricing structure. How do you charge for your services?

Yeah, so it typically starts from, uh, 2, 500 USD per month. And, uh, it really depends what value we can deliver for the client and the scope of the work. So it can be even five, 10, 000, whatever, but it really depends on the scope of the work. And, uh, It's, it's a custom tailored pricing. So it, we always discuss it with the potential client and then we decide together based on what we will do.

Okay. Now it makes sense. Before we come to the end of our coffee break today, Daniel, is there anything you want to share with our listeners that we haven't covered yet? 

Yeah, so if you can just check out our YouTube channel, I'm really active there and now I publish two videos a week. I just dropped a, uh, mini course about actually Google ads.

That's our newest service that we added. You can also find the free email marketing course there. Both of these courses are four hours long, so a lot of details for free. So check out my YouTube channel and, uh, if you want really just, uh, let's connect on social or through email and, uh, and we can talk.

Cool. I think we already had a ton of golden nuggets in this episode, and I can only imagine how much information you're giving away for free in a four hour video. our long video. So I think that's like more than a masterclass. I will put the links in the show notes. So you will be just one click away for our listeners.

And thanks so much for giving us an overview on how AI can help us retention marketing. And I hope a lot of people will check your site out and get in touch with you. Thanks so much for your time today. 

Thank you. Have a great day. 

Hey, Claus here. Thank you for joining me on another episode of the e commerce coffee break podcast.

Before you go, I'd like to ask two things from you. First, please help me with the algorithm so I can bring more impactful guests on the show. It will make it also easier for others to discover the podcast. Simply like, comment and subscribe in the app you're using to listen to the podcast and even better if you could leave a rating.

And finally, sign up for our free newsletter and become a Smarter Shopify merchant in just 7 minutes per week. We create content from more than 50 sources, saving you hours of research and helping you stay on top of your e commerce game with the latest news, insights, and trends. Every Thursday in your inbox, 100 percent free.

Join now at newsletter. ecommercecoffeebreak. com. That is newsletter. ecommercecoffeebreak. com. Thanks again, and I'll catch you in the next episode. Have a good one.