Maximizing customer value (and not re‑engagement campaigns!)
Take a moment to consider this picture. Where is the plane going? Is it about to complete a magnificent loop-de-loop or crash into the side of a barn? Is it being piloted by a top gun or a novice? From this single moment in time, there’s clearly no way to tell. The answers to these questions may not seem so important…unless, of course, it’s your plane! I bring this up because I’m still surprised when I encounter experienced email marketers who focus solely on campaign open and click rates.
To these marketers, the formula seems simple: if they send 100,000 emails, they’ll get 30,000 opens, 10,000 clicks and 2,000 conversions. Overall, their main focus is on maximizing list growth and minimizing list attrition. All well and good, but fundamentally flawed. Like the single image of the biplane, this sort of metric only accounts for a moment in time — a single campaign, if you will — and lumps all users into groups of those who clicked and/or opened the email.
But the fact is, not all users are created equal: For some, this was their first click; for others, one of many over time; and for some, it will be the last time they ever click. So your campaign may get 10,000 clicks, but if a typical user opens just one out of 10 emails she receives from you, it means that nine out of 10 times you’re serving up content she’s simply not interested in.
In other words, you’re boring her! But if you can look past the simple opens and clicks, you’ll find a list segment that holds far greater value as the driving engine of site traffic and revenue; the one you should be watching, nurturing and using for valuation metrics: Engaged users.
Every user has the potential to become an engaged user. In the flash sale and group buying model, the heaviest user engagement and potential to convert is in the first 30 days. So it’s important to learn from that user in those 30 days, look at the type of deals they opened, clicked and converted on. But once a user begins to not open your email daily — once they start to disengage — you’re quickly on the road to losing a customer. Why do users disengage? People’s lives certainly aren’t static, so why would we think their interests never waiver? That customer who loves to sail? Sure, an article about Fiji may catch his attention today. But if his kid comes down with the flu or his car won’t start tomorrow, exotic travel would likely not be at the top of his list. Like that picture of the plane, suspended in time, a snapshot of engaged user activity is still just a snapshot. Today’s engaged user can become disengaged with one poor message. So, how do you truly engage users and prolong customer lifetime? The answer is simple, yet powerful: You need to know and understand their interests OVER TIME. That way, when a user starts to disengage (their open/click/conversion rate is on a downward trend), you can counter by varying the frequency and upping the relevancy. Yes, you send them less email, but increased relevancy yields greater engagement. With each email you send, you’re subtly motivating them to re-engage and propelling them forward on an upward course. As they trend back up, you can email them more frequently, all the while keeping them as engaged as possible. And when they start to disengage again? Rinse and Repeat! Clearly, all of this needs to happen on an individual level and not as a segment. And that’s where the real challenge lies. Get it right and you maximize customer lifetime, minimize list attrition and organically grow your list (and revenues!). Want to find out how it’s done? Leave a comment below or shoot us an email. You can also find us on Twitter.
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