The Value Of Klaviyo For Enterprises

Customers expect timely, personalized experiences from the brands they interact with, but understanding customers’ needs and engaging with them in the right way at the right time and on the right channel is challenging. Enterprise organizations in particular face high volumes of data and an increased likelihood of organizational silos that are exacerbated by disjointed tools and multiple customer engagement channels. Without a comprehensive solution to collect, analyze, and activate data, enterprise organizations may fail to engage customers in the right way, resulting in lost customer trust and ultimately business.

Klaviyo is a marketing automation and customer data platform offering online brands direct ownership of their consumer data and interactions, helping customers power smarter digital relationships. With Klaviyo, brands can bring in customer data from more than 300 prebuilt integrations, as well as open and flexible APIs, to create unified customer profiles and automate personalized omnichannel communications that make customers feel seen.

Klaviyo commissioned Forrester Consulting to interview eight Klaviyo customers from organizations with experience using Klaviyo and conduct a Total Economic Impact™ (TEI) study to better understand the benefits, costs, and risks associated with Klaviyo.¹ This abstract will focus on enterprises’ use of Klaviyo and its value to their organizations.

Interviewees highlighted in this abstract include:

• Senior customer relationship manager (CRM) and email marketing manager for an apparel and fashion organization with $229 million in annual revenue and 420,000 active profiles in Klaviyo.
• Head of customer retention for a consumer goods organization with $100 million in annual revenue and 4.9 million active profiles in Klaviyo.
• Senior retention marketing manager for a consumer goods organization with $250 million in annual revenue and 2 million active profiles in Klaviyo.

Investment Drivers For Enterprises

The interviewees’ organizations adopted Klaviyo to improve their ability to understand their customers and engage with them in a more personalized way at scale. These organizations struggled with several challenges in their legacy environments, including:

• Support for scale for SMS growth. Before adopting Klaviyo, interviewees shared that their organizations didn’t have a good strategy for SMS and were not seeing value in the channel despite significant costs associated with their efforts. Because SMS was served through a separate solution, the interviewees were unable to see and understand their customers’ communication preferences. The senior retention marketing manager for a consumer goods organization said: “We were sending SMS [campaigns] to our entire list and [sending] a picture and that costs three times more. I tested them to see that we weren’t actually getting value from that.”

• Inability to personalize audience communications, resulting in poor campaign performance and increased costs. Interviewees shared that their organizations’ previous marketing automation solutions limited their ability to create audience segments. This forced them to take a large-scale, impersonal approach to communicating with their customers. The head of customer retention for a consumer goods organization explained that they were unable to include or exclude customers from campaigns with their previous solution, which was both inefficient and costly. The senior CRM and email marketing manager for an apparel and fashion organization shared that because they couldn’t segment audiences. They said, “We were just batch and blast sending to everyone on email and SMS … [that] lead to poor deliverability [and] spending too much on SMS costs.”
• Cumbersome technologies requiring expensive resources, slowing down marketing initiatives. The head of customer retention in the consumer goods industry explained that segmentation with the organization’s previous solution was technically possible. However, it was extremely complicated and time-consuming and required support from data analysts, which cost their organization valuable time and resources. The senior CRM and email marketing manager for an apparel and fashion organization said that with their previous solution, “the implementations to get that data [to build segments] was really difficult, it required additional resources.” They continued, “Previously, you needed to partner with a data analyst or data engineering to try to get the data that you need.” The result was that marketing teams either couldn’t access and manipulate the data they needed or they had to wait for available resources to support them, which reduced their ability to react quickly to customer needs.

Klaviyo Features

The interviewees’ organizations chose to invest in Klaviyo for the following reasons:

• Single solution for email, SMS, and pop-ups. Klaviyo allowed the organizations to manage email, SMS, and pop-ups through a single platform. This reduced overhead efforts and improved their ability to communicate intentionally and effectively with customers. The senior retention marketing manager for a consumer goods organization said: “[We were] juggling three different platforms, three sources of reporting, three different reps. … Klaviyo offered an all-in-one solution that encompasses email, SMS, and pop-ups. It [provided] ease [of use], better workflows, more efficiency. It was able to save us a lot of time by integrating those systems … and also cost.”
• Segmentation capabilities. Organizations struggled with segmentation with their previous solutions and were looking for a platform that allowed them to understand their customers and target their communications more effectively. The senior CRM and email marketing manager for an apparel and fashion organization said Klaviyo offered some of the best segmentation capabilities both in terms of ease of use and overall ability to leverage data compared to other solutions they had experience with.
• Ease of use for marketing and fewer developer bottlenecks. The head of customer retention for a consumer goods organization explained that they were previously heavily reliant on their development team to help with data analysis, segmentation, and other marketing initiatives. They shared: “[Our previous ESP] didn’t make sense to anyone, even the marketers. Klaviyo is very easy to use … and can do advanced things that anyone could go in and figure out how to make work. Our CX team … can do [things] themselves versus having to ping someone to do it for them.”

Key Results For Enterprises

In the full Total Economic Impact study, quantified benefits for the composite organization were:

• Profit growth from improved email conversion rates.
• Business growth from net new email subscribers.
• Profit growth from improved SMS conversion rates.
• Value of automated retention emails.
• Email marketing manager efficiencies.
• Developer and graphic designer efficiencies.

The interviewees for the enterprise organizations highlighted in this abstract shared the specific benefits their organizations experienced that contributed to the total benefits represented in the composite organization. The results of the investment for the interviewees’ organizations include:

Improved email and website conversion rates. Interviewees shared that Klaviyo improved their organizations’ ability to tailor customer communications to the right channel at the right time by consolidating data and streamlining flows, leading to improved conversion rates.

• Higher conversion rates. The senior retention marketing manager for a consumer goods organization explained that Klaviyo helped improve their customer communications by consolidating data and providing more coordinated, targeted touchpoints with customers. This led to a better customer experience and a 7.5% increase in conversion rates.
• Improved ability to target customer communications. A senior CRM and email marketing manager at an apparel and fashion company shared how Klaviyo’s ability to quickly iterate, especially when it comes to editing automated messages helped with conversions. They shared: “We’ve seen opportunities to improve those templates or lines of communication — it’s very easy to update those templates within the flows. If we need to, for example, add icons to give more life to [the communication], you could edit that, save it, and it’s live to the next customer that’s going to receive it. [However,] when I was on our previous solution there were quite a few steps to do that, such as cloning the flow and then restarting it. Within Klaviyo, the flows are already built, so all that development, the dynamic content, is already there. You can update certain messaging on the fly.”

Improved SMS outcomes. Interviewees shared that their organizations reduced SMS costs and added new customers to their SMS lists. They also retained more of those customers over time due to an easier sign-up process and better communication strategies.

• Cost savings per SMS. The senior retention marketing manager for a consumer goods organization said that Klaviyo’s costs were 20% to 30% lower than their previous SMS solution. Their ability to use Klaviyo as a single solution supported their ability to make more strategic decisions about sending messages, resulting in overall lower costs.
• Increased SMS sign-ups and improved retention rates. Klaviyo made SMS sign-ups easier for customers, and customers were less likely to unsubscribe because communications were better coordinated. The senior retention marketing manager for a consumer goods organization shared that their SMS sign-up rates doubled. They also said: “Our biggest retention marketing channels are email and SMS. About 40% of all repeat customer revenue comes from Klaviyo email and SMS. Those two channels make up over a third of our repeat revenues. It’s a massive driver for us.”

Increased profitability per customer. Interviewees shared that Klaviyo helped their organizations leverage data to contact customers on the right channel at the right time with the right content. It improved campaigns and automations, and saw profitability metrics increase in a variety of areas, including:

• Increased customer average order value. New automated flows with Klaviyo supported more granular upselling and cross-selling, which led to higher total purchases by customers. The senior retention marketing manager for a consumer goods organization explained how Klaviyo supported their cross-selling initiatives: “Because we have Klaviyo for SMS and email, it’s allowed us to make a flow that has email and touch points together. So instead of having a separate flow, you can have one flow and it can send an email, wait a day, and if a customer doesn’t purchase [it can] send a follow-up SMS. … They have really great segment builders and really great flow builders, allowing us to get more granular in some of our flows and get more personalized.”
• Increased customer lifetime value. Creating different journeys based on cohort and shopping behavior maximized the sales opportunity with each shopper. The senior retention marketing manager for a consumer goods organization said that since implementing Klaviyo, “People are ordering more frequently and spending more money every time they purchase.”
• Increased retention automation revenue. The head of customer retention for a consumer goods organization shared, “[With Klaviyo,] we’ve been able to launch a bunch of automations that helped us get the lift from retention without having to come up with an email every other day.” As their organization continues to add automations, they anticipate further growth in automation revenue. They said, “Two years from now, I hope that at least 50% of our revenue will come from automations. In our old ESP, we had a grand total of five because that was the limit of our capabilities. In Klaviyo, I think we’re up to eight right now, and the goal is to be more targeted as we go.”

Employee time savings. Klaviyo was easier to use and offered more functionality than the solutions interviewees’ organizations used previously. As a result, both marketing teams and developers saw time savings.

• Developer efficiencies. The head of customer retention for a consumer goods organization explained because Klaviyo was so user-friendly, it allowed their marketing team to take on a lot of work that developers previously needed to do for them. They explained: “We need to be able to segment people based on what they’ve recently done or what they’ve recently bought. And it’s a lift with other ESPs to set those things up. … Everywhere else we looked, we literally sat down with our head of dev [development] and said, ‘How many hours of work will it take your team to do [this] versus Klaviyo?’ Klaviyo just won out by miles.” For example, data mapping work that took a developer 50 hours could now be completed by an email marketing manager in 10 hours.
• Email marketing manager efficiencies. In addition to being more self-sufficient, marketing teams saw additional time savings with Klaviyo around building and maintaining campaigns and flow emails as well as reporting. The senior retention marketing manager at a consumer goods organization stated: “When I started, I was doing all this myself. I would say having all three systems integrated, the pop-ups, the email, the SMSes, probably saved 30% of time between reporting and campaign building, maybe even 50%. It was just an incredible time savings because you don’t need to log into three platforms, worry about data syncing between three platforms, or have three different weekly meetings with these different companies.” The senior CRM and email marketing manager at an apparel and fashion organization said: “As far as the tool itself, the drag-and-drop editor is easy to use and there are very few bugs, where you can build an email and the end result is what it’s going to look like in all inboxes. The tool is also easy to use when it comes to segmentation.”