How to use a 'velvet rope' strategy for your email marketing
In any big awards event there is always a red carpet spread out for the celebrities and VIPs to walk towards the auditorium.
There is a big rush of paparazzi and photographers to take the pictures of these celebrities. They pose for pictures and then get inside the place through a special entrance for them. They also have a special seats to sit and view the event at the front.
These are facilities not offered to the rest of the audience at the event who have to queue up for their seats at the normal entrance for all. They also get the back seats in the hall which may not be the best.
There are of course envious glances towards the celebrities as they get the best seats in the event and get access to several extra services that others don't.
Which one would you like to be at the event? The one getting through the velvet rope with VIP access or like the other people paying for the event to attend it.
There is something alluring and mysterious about a thing that everyone wishes to have. This tugs the curious nature of humans to explore and experience which leads to growth of the said business.
Such examples of exclusivity are present in everyday life , and some brands use it to establish themselves in the market as innovators and leaders. Right from luxury brands like Ralph Lauren to Amazon Prime, every big business uses the strategy called ‘velvet rope’ to grow at a faster rate.
That got me thinking, if this velvet rope strategy can be used by a marketer to keep their best customer base providing growth and a major share of the revenue whereas luring the rest of your mailing list to convert them into their growing loyal base.
In this post we shall explore on what is the velvet rope strategy and its benefits.
We will further run through some strategic tips to use it for your mailing list and generate growth in customers.
What is velvet rope strategy?
Velvet rope strategy means trying to create “loyal customers” out of existing user base by creating exclusivity with services or product offerings. These are your biggest evangelists and returning customers. They contribute to significant portion of your profits.
A ‘velvet rope’ is generally placed to give exclusive access to people who are the right clients. This technique makes the people curious enough to give it a try!
If your services are having strict number limits and they are in demand, then customers will value your brand .
Example: Amazon Prime has an exclusive service for providing access to their streaming services as well as same day delivery across the country if you take the membership.
Thus, due to the benefits acquired from such VIP access to services, when the customers will become a part of this group , they will feel a sense of value and achievement.
There is a contradictory belief in the market that a brand needs a lot of new customers to show that they are on the growing curve but alternately they don’t require that large amount of new leads and sales. If they focus on creating the “best customers” out of the existing customer base , it pays richer dividends.
As they say your regular hens can keep laying eggs while you can focus on building a poultry farm.
So how can a marketer apply this strategy to their Email Marketing Program?
Tips to apply velvet rope strategy to your mailing list
There are ways to nurture your mailing list with your promotions and engage your loyal subscribers regularly.
The key is to build a super active list of your subscribers who will have the highest brand affinity and will be eager to hear from you on a daily basis.
Here the Recency , Frequency . Monetary (RFM) model should be used to analyse your database to extract the most engaged users from your base who are also frequently transacting with your brand.
Recency will refer to how many days the particular user has engaged with your brand. There will be a score provided to each user eg: a particular user has opened your emails recently in the last 15 days. This user will be super responsive to your emails.
Next is frequency where the number of times a user has opened your brand communication emails and if its score is greater than a certain threshold then they should be included in your loyal list.
The last feature of the model is monetary value where the number of conversions that the users have done will be analysed to include them in the list. The more repeated transactions you receive the better it is!
RFM model will extract the most potential customers from your mailing list. Targeting them gives you a chance to have more conversions and build your super-star customers.
Below we will have a run through of some tips in order to nurture your super fans and evangelists .
Selective targeting to build a loyal base
Not everyone on your mailing list will be engaged with your brand. They might prefer other brands over yours for their shopping or service needs.
You need to analyse your mailing list and select those users who are eagerly responsive with your brand communication say in the last 90 days.
User categories will be as follows:
- Opens and clicks for last 3 months
- Frequently transacted customers for last 6 months.
Marketers here will have to select this base and create a strategy to reach out to these users at least twice a week with exclusive offers.
This could extend to premium discounts , VIP membership or premium access whichever you are offering according to your brand guidelines.
Those subscribers will be ready to pay more for exclusivity if they see real value in investment. So your promotional content should be on point to talk more about the value you will provide by pitching them to become a premium member.
Which brings us to the velvet rope access your product/service you will aspire to provide...
Position yourself as an exclusive provider
As a brand marketer you will have to give a thought to what are your users motivations? What are they actually looking for in your product/service?
There needs to be a unique selling proposition to your audience which they won’t be able to get anywhere else. The discounts for the premium members need to be competitive and VIP access should count for extra perks which will make the customer feel valuable.
Spotify – the music app providing uninterrupted music and unlimited download for offline listening on premium membership of a small amount per month.
An example of this could be the “special club of members” started by a travel company which gets extravagant discounts on membership for their stays , flights and extra perks on their stay.
The service you provide to this select few set of users should be of the highest quality so that they can feel special on being a part of it. These customers need to be treated with utmost importance.
Treat them like royalty by redesigning your email program
With AI powered marketing platforms, these loyal set of subscribers can be delivered the mails on priority and then delivery will be done to the rest of the audience.
This feature will ensure that your engagement will remain high for your campaigns and you will keep getting a decent rate of web traffic when you send your messaging .
Also some special campaigns related to offers will be offered only to the regular active base and not to entire mailing list.
Some automated personalised trigger campaigns can also be set up for these selected users so as to keep them coming back for more to your brand website and keep their attention glued.
Informative campaigns about what separates your brand with the others will be a good chance for brand indoctrination and educate your audience on the value you provide if they opt for the ‘velvet rope’.
Keep a close monitor on the click rate to check how many of your regular users are checking out your offers on the website. Those numbers will be key in designing your future offers and email program as you will get a good idea on what they respond to.
Keep your service limited and get regular feedback
Offer a limited quantity of premium options . Makes your customers feel exclusive and valuable. Have a hard limit on number of customers you can have on the premium/VIP service.
The sooner you put up that velvet rope and signal to the prospective customers what you are offering , you will stand out from the other brands. But there needs to be a hard stop to allowing a limited people to avail your exclusive services.
What is to be done with rest of your audience?
Just because you are catering to your selected set of loyal customers does not mean that you ignore the rest of your customer base.
But this set of audience should not be targeted extensively as the number of conversions from this subset of the mailing list could be relatively on the lower side.
What you can do with this mailing list is broadcast the information of your exclusive memberships periodically. There should be a focus on brand indoctrination at every opportunity to send a campaign to these users. The target should be to convert these moderately active customers into your loyal superstars.
They could be offered some limited time trial membership for free for your premium service, so that they can get a taste of what they could benefit from if they pay a little more and become a member.
Netflix offers first 1 month free trial of streaming on sign-up. The user can go through the platform and then take a decision on if they wish to take the subscription.
Word of mouth publicity and evangelism always helps to garner more users who are ready to convert into premium members but the messaging should be on point for this to happen.
This part of the audience should be targeted for your generic campaigns and sales campaigns which can garner new fans and bring the extra bit of revenue.
Benefits of using velvet rope strategy
Some advantages of following a velvet rope strategy in email marketing are stated below:
Know your brand affinity and what works
You can come to know a lot about your mailing list from your campaign engagement.
Based on the engagement metrics and the transactions you receive from them you can decide on who are your loyal customers and how will you treat them with exclusivity.
You will know what part of your mailing list responds to your every mail and who are those inactive users who should be targeted only once in a while.
Based on the above you can re-design your email program for the select few who you can let in as premium members. Thus velvet rope strategy ultimately tells you a lot about buyer persona and what works in triggering buying behaviour for the customers.
Helps to focus marketing efforts
The more you will focus on strategies to get more returning customers and provide more exclusive services to them, the better will be your marketing plan. You can target your users based on their user preferences that you can connect during the sign up process and respect them.
Your daily, weekly and monthly mailing calendar needs to be designed to get more ROI from your customers and generate a buzz in the market around your brand.
Brilliant email campaigns are rewarded in the industry with good word of mouth and publicity with the advent of social media platforms.
So stick with your email plan for your loyal customer base and re-engage your rest of the audience periodically.
Increased focus on your marketing plan will narrow down its effectiveness.
Increase your email deliverability
If you stop mass mailing habit of sending every campaign to the entire audience and focus rather on sending promotions to the right audience , it will pay rich dividends in terms of boosting your sending domain hygiene.
The campaigns done to the loyal base maybe smaller in volume as compared to your audience hence it will save you from sending huge volumes. These campaigns being sent to your active base will also garner greater engagement then mailing to the rest of the base hence it will help to maintain your domain reputation. You can monitor your domain hygiene on Google Postmaster and other tools provided by mailbox providers.
This will result in a superior email deliverability and will send a green signal to the mailbox providers to allow the rest of your emails to be placed in inbox as well.
This shall increase your overall open and click rates for campaigns and provide rich rewards in terms of your conversions.
Velvet rope strategy if applied in a comprehensive way as mentioned above can provide long term returns by focusing on your returning best customers.
Your service or product being offered should fulfil the needs of your customers and provide them exclusive memberships and deals with tier-based pricing options.
Nurturing your trusted evangelist customers rather than casting your net wide and failing to convert more customers will be an effective way to implement this strategy.