Dealing With This Season’s Burned Out Subscribers

In September, all email marketers have good intentions. They meticulously map out segmentations; plan a logical calendar to support strategic initiatives; and commit to holding firm on protecting margins, avoiding the trap of ever increasing sweeteners as we near the end of December.

In September, all email marketers have good intentions. They meticulously map out segmentations; plan a logical calendar to support strategic initiatives; and commit to holding firm on protecting margins, avoiding the trap of ever increasing sweeteners as we near the end of December.

Then reality sets in. Although this year has been significantly better than last year in terms of business buying and consumer spending, most email marketers are quickly caught up in the email marketing return on investment trap. When times are tough, the pressure goes up to send just one more email campaign in order to boost revenues and response.

That strategy can work in the short term, but come January, the reckoning takes hold. This is when email marketers must rebuild relationships sullied by overmailing and lack of targeting. Hopefully, your business can pause and take a deep breath in order to both slow down the frequency as well as improve customization and relevancy. If you still see low response rates and list fatigue, then it’s time for a strategy to win back your audience.

Strategies for winning back subscribers
A win-back strategy can be anything from a friendly reminder to visit the preference center to a full-on bribe, like offering a steep discount or free service if the subscriber clicks now. Test a few of these ideas on subscribers who didn’t open or click on your emails in December and January. After a few attempts to win them back, if you still don’t see any activity, it may be time to clear the dead wood from your file.

While suppressing data is an anathema to direct marketers’ hearts, clearing nonresponsive subscribers from your email marketing file can help with everything from reducing churn to lowering costs to improving the new engagement metrics used for inbox placement and deliverability. Logically, it makes sense. More active subscribers are more likely to respond.

Surprisingly, however, clearing nonactive addresses from your file also improves response. That boost in response isn’t just on the rate off of a smaller base, but is also on absolute response and revenue per subscriber. Why does this happen? By focusing on the needs of active subscribers, marketers improve relevancy and lower frequency. They start to segment their files with tighter subscriber profiles. Be sure to note that this is the opposite of what you’re able to do in the rush of end of year.

Even permission files end up with anywhere from 25 percent to 65 percent of inactive subscribers. These subscribers, despite giving permission at some point, haven’t opened, clicked or converted from email in the past year or more. Unfortunately, the fourth quarter is when most subscribers burn out. The overflowing inbox at a busy time of year just becomes too much. They tune out your messages if you’re not offering value. Pretty soon, ignoring your emails becomes a habit.

For a long time, it was widely believed to be reasonable to keep all those dead addresses on your file, as it didn’t cost much to mail them and having a larger denominator made complaint rates and other deliverability metrics seem lower. Plus, marketers are ever hopeful. Even if a subscriber hasn’t responded to their emails in a long time, they still believe that today’s message will be the one that rouses them to profitable response. Of course, very few of these sleepers ever wake up.

However, internet service providers and mailbox providers like Yahoo, Hotmail and Gmail have long been suspicious of marketers who keep such nonresponsive data on their files, believing that they’re trying to game the system and escape penalties of higher complaint rates. In the past six months, all three global providers have introduced new metrics as well as new inbox management tools to help them see subscriber-level activity. MSN/Hotmail was the first to announce the use of activity measures to block senders from a particular subscriber’s inbox (I wrote about this in early September).

I’ve seen some success in win-back campaigns that respect subscribers, are honest about the offer in the subject line, and keep the message and tone in line with the brand. Test a few alternatives and segment as much as possible to improve relevancy as well. For example:

  • A publisher tested several approaches and found that “We hate spam, too. Change your email settings now” in the subject line was the best way to encourage 90-day nonactive readers to adjust frequency and title choices. Typically, I find that clarity trumps cleverness in a subject line. Just say clearly what the subscriber is being asked to do.
  • A retailer sent an email campaign to six-month inactive subscribers inviting them to vote for the brand’s next catalog cover. The engaging campaign consistently earned 25 percent clickthrough rates. By focusing on the click (the action needed to prove that the subscriber isn’t truly dead), the campaign earned a very high response rate. As a bonus, while many subscribers were on the company’s website they took advantage of specials offered on the landing page.
  • A retailer tested the effect of a win-back campaign versus lowering frequency to six-month inactive accounts. Lowering frequency is a commonly used tactic to respect nonresponding subscribers level of interest, but, of course, does nothing to actually engage them. The win-back strategy was the clear winner, earning a 10 percent response rate and $900K in revenue versus a 2 percent response rate and $150K in revenue from the segment that received lower frequency.

Let us know how you’ve successfully re-engaged subscribers by posting a comment below.

What Do We Really Know About Consumers?

Turns out American’s didn’t splurge on trivial junk during this recession, and that means many experts don’t know today’s consumer as well as they thought they did.

Turns out Americans didn’t splurge on trivial junk during this recession, and that means many experts don’t know today’s consumer as well as they thought they did. At least that’s the takeaway from this article by Mina Kimes of CNN Money.

The prevailing assumptions about recessionary spending were based on studies of consumer spending during past recessions that showed Americans spending more on cheap indulgences during hard times. But as Kimes points out, that hasn’t held true during this recession. iPhone sales spiked while lipstick, liquor and candy dropped.

Some of those trends saw ups and downs (a previous report by Kimes indicated general cosmetics doing well last year), but overall, 2009’s cash-strapped consumers seemed to make purchase decisions more thoughtfully than in recessions past. Instead of cutting expensive items and indulging on the cheap, they made more complex calculations. They often saved money to buy expensive items, for example, sometimes by cutting out the very indulgences consumers might have wallowed in during “simpler” times. It appears that many took control of their finances instead of living hand-to-mouth, with some surprising retail results.

I wonder how much of that reflects a psychological shift in consumers, and how much reflects shifts in the retail market. Many goods are available at relatively low prices these days thanks to several decades of the biggest retailers competing on price (i.e. Wal-Mart). I’m not sure indulgent lipstick’s that much less expensive than a pair of bargain shoes. On the other hand, consumer electronics is not simply an entertainment purchase. People spend their careers using their personal laptops and smartphones as tools; so spending more can mean more money or better opportunities. Consumers are well versed in the investment calculation of these items: If you have to buy a phone and phone service anyway, why not choose the one you can carry with you and load with apps that make you more productive, or at least more entertained?

Consumers have changed, but the retail landscape may have changed even more. What can you assume about a nation of potential customers who constantly consider that?

That’s probably not surprising to those of you who read Target Marketing or All About ROI, which often talk about the importance of testing and verifying assumptions about your audience. At heart, direct marketing is a numbers game, and those successful at it know what my football line coach used to sum up: to “assume” makes an “ass” out of “u” and “me.”

But even extensive testing doesn’t really take assumptions out of the equation. Who spends resources testing something they don’t expect to work? When you try something new, where did the idea come from? Usually an assumption. So even with testing, there’s a bias to test toward what we believe to be true. Adaptability is learning to recognize and react quickly when things we thought we knew turn out to be wrong.

So have consumers changed during this recession? Has that been the case for your customers? Are they acting against type, buying or not buying in ways that defied your expectations?