Never Throw Out a Customer!

Never Throw Out a Customer!

My father owned a kitchen and bath showroom on 7th Avenue in the Chelsea neighborhood of Manhattan. He ran the business from when he was a young man to when he retired a few years ago. While he was cordial with people just browsing his store, he would drop everything when a paying customer walked in. If he hadn’t heard from a customer in a while, he would reach out with a phone call. Putting the customer first and always staying in touch are principles that have stuck with me throughout my professional career.

Had my father been an email marketer he would have had a similar philosophy about his customer email list. The idea of removing a customer’s email address simply because they had not responded would have been completely foreign to him.

In a recent blog post I wrote that email marketers need to be careful about removing seemingly unengaged and inactive subscribers. Taking that a step further, a marketer should be ultra-cautious about removing a seemingly unengaged former customer’s email address. The removal of a customer who appears to be unengaged but is very much alive, will suppress future orders and revenue.  Take, for example, customers who read their email on their mobile device or use Gmail with images disabled by default. They never register an open, but still enjoy the steady rhythm of your mail and are an active customer on your website. Removing them comes at a significant price: the loss of a customer (and the revenue needed to grow your marketing budget)! As my friend Dela Quist said here, “The fact is the more email you send, the more money you make.”

Improving email deliverability is certainly a challenge. These inactive subscribers are suppressing engagement rates, an important metric that ISPs look at when deciding where to deliver a message: the Inbox or the Spam folder or not at all. However, understanding the effect engagement rates have on deliverability is more art than science. No one knows the optimal engagement rate for their campaigns; rather the adage “more is better” applies. Throwing away these inactive subscribers to improve engagement rates should only be considered after all other obvious factors including bounce rate, complaint rate, and spam traps, have been reduced. For a list of industry averages for each of these metrics, check out this report from MailChimp. For more information, check out the Return Path Sender Score Benchmark Report.

 

If you are experiencing deliverability challenges related to low engagement, then the goal should be to cut only as many addresses as necessary, but not more. First, focus on the most egregious and least valuable inactive subscribers at domains where your reputation is negatively affected. You might define these as subscribers who have never opened or clicked, made a purchase, visited your website, or positively interacted with your brand via social media. After you remove those, measure the effect on deliverability and revenue. If the results are negligible, then move on to the subscribers that haven't opened or clicked, made a purchase, visited your website or interacted with your brand in social media in 12 months.

 

Of course if you aren't experiencing deliverability challenges or your deliverability challenges are not related to low engagement rates, then you should never throw away a perfectly deliverable email address.

 

Craig is the Founder and CEO of Leadspend

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Comments 1

Guest - Dave Hendricks (website) on Tuesday, 06 August 2013 20:57

Failure is a key component of email marketing. Most people don't open your mail. Stop complaining. Unless you are in the transactional mail business you will never get open rates above 75%.

Even pro golfers miss gimme putts.

It's expensive to get someone onto your list. And if you are selling something, they only have to buy once - even once a decade - for it to make sense to continue email them, given the low cost of sending email.

So don't take them off your list. Unless you are getting a bonus based on your open rate. Better to ask yourself some questions about your business before removing them:

1. How often do your best customers open, click and convert?
2. What is the behavior profile of your ideal customer?
3. How much does it cost to mail someone at your normal cadence?
4. How much does it cost to acquire a new customer?

If you are finding that there are routinely 500k people who never ever open, it will be tempting to remove them from your file. If your deliverability is getting dinged because your list is not responsive. If you getting junked, you will be tempted. So segment them out and change the cadence.

Don't toss them out.

In the coming years, you are going to find that the email addresses that you have collected are valuable for more than merely SENDING email. That same address that doesn't open your mail - unless it is truly a dead address - is a customer that can now be reached in 3rd party media. You can use a hash of this email address to target them in Facebook and soon twitter, amazon, paypal, and netflix to name but a few.

You won't need to send anything if you don't want to. All you will need is (an MD5 hash of) the email address and an ad. And you will be able to reach them where they are paying attention. The email address and the person that it represents is what makes email marketing so special...not sending mail through an SMTP server. That's an 80% failure business...for everyone who does it.

Failure is a key component of email marketing. Most people don't open your mail. Stop complaining. Unless you are in the transactional mail business you will never get open rates above 75%. Even pro golfers miss gimme putts. It's expensive to get someone onto your list. And if you are selling something, they only have to buy once - even once a decade - for it to make sense to continue email them, given the low cost of sending email. So don't take them off your list. Unless you are getting a bonus based on your open rate. Better to ask yourself some questions about your business before removing them: 1. How often do your best customers open, click and convert? 2. What is the behavior profile of your ideal customer? 3. How much does it cost to mail someone at your normal cadence? 4. How much does it cost to acquire a new customer? If you are finding that there are routinely 500k people who never ever open, it will be tempting to remove them from your file. If your deliverability is getting dinged because your list is not responsive. If you getting junked, you will be tempted. So segment them out and change the cadence. Don't toss them out. In the coming years, you are going to find that the email addresses that you have collected are valuable for more than merely SENDING email. That same address that doesn't open your mail - unless it is truly a dead address - is a customer that can now be reached in 3rd party media. You can use a hash of this email address to target them in Facebook and soon twitter, amazon, paypal, and netflix to name but a few. You won't need to send anything if you don't want to. All you will need is (an MD5 hash of) the email address and an ad. And you will be able to reach them where they are paying attention. The email address and the person that it represents is what makes email marketing so special...not sending mail through an SMTP server. That's an 80% failure business...for everyone who does it.
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Saturday, 24 August 2019
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