Ten Dimes May Make a Dollar, But Is It Worth It?

Some of those business decisions we make every day as email marketers are harder to gauge than others. Are our open rates good enough? Shall we send this fifth message this week? Should I send CTOs the same message as CFOs? Will our best buyers respond better to 15-off-75 or 10-off-50? All these are tough calls that we base on judgment, best practices and any benchmarks we can glean from vendors.

One of the trickiest is making the case for dropping non-responders from our files. Keeping them on is not expensive and seems to do no harm to active subscribers. It used to be a good idea to keep complaint rates down by flooding the denominator with non-responders—and most marketers felt that since these subscribers didn’t open or click, they wouldn’t complain either.

Not so any longer. It’s risky to keep non-responders on the file. First, there are a lot more of them than ever before. We see clients with anywhere from 25% to 65% of their file now “dead.” Second, it is a deliverability risk. Our client data shows these non-responders often do complain and there is a risk that very old records can become spam traps, significantly damaging your sender reputation.. Third, their strong numbers depress your response rates and may disguise more important trends among active buyers.

Our good client Andrew Magpantay, senior product manager at Reunion.com, coined a great expression when he spoke at our client seminar in Los Angeles last week. He said that reconnecting with non-responders on the file is like gathering up the “loose change.” Sure, there is some value there, and if you have a lot of it lying around it adds up to real dollars, but the risks are real, as well.

In addition to the deliverability hit, typically, there is no revenue gain from continuing to email folks who are no longer interested in your messages or who have been bored by them for so long it would take a miracle to get them to finally open another. Yet, we marketers are ever hopeful. We truly do believe that even though the subscriber has been ignoring our messages for a year, that tomorrow just might be the day! The reality is that very few, if any, will actually come around after such a long time.

At the same time, there is always some sort of “tail” for response from long inactive subscribers. Sometimes it’s enough loose change that it adds up! One of our clients, a retailer, did the analysis and found that buyers who were lapsed 15+ months actually purchased a half million dollars worth of product in the past year. (There are also about 5 million of them!) Another client’s “dead file”—non-responsive for 13+ months after receiving bi-monthly (2x a month) email messages for a year—earned a 2% purchase rate. That was small compared to the 15% purchase rate of other subscribers, but still meaningful. That’s real revenue and no one wants to leave revenue on the table. Andrew’s Reunion.com file of non-responders definitely earned some small response. But not a lot and nowhere near the response rates of the rest of the file.

The key is to make sure that you are doing the analysis and balancing the deliverability and cost risks. Maybe you can’t bear (or afford) to abandon all of the loose change. Consider just picking up the highest value segments, the “quarters” perhaps, and leave the rest on the ground by cutting the records off after a win-back campaign. Try to re-engage through other channels—when they log into the website or call customer service, through your sales team or via postal mail. Match your non-responders to an email change of address service (full disclosure: Return Path runs the largest)—many subscribers may regularly check an alternate address. Be sure to welcome these returning subscribers back with a custom campaign.

The ISPs, especially MSN/Hotmail and Gmail, are getting smarter about using consumer “votes” for separating senders whose mail is welcome from those who keep mailing long after the subscriber has tuned the program out. So it no longer is always helpful to keep a large denominator of subscribers who are not responding (or complaining) to keep your complaint rate down.

Better, be sure to engage with subscribers before they become too far lost to you. At least every quarter develop a win-back campaign or an invite to visit the preference center and re-engage. This is the only way to prevent having the loose change become significant enough to pain you.

—Stephanie Miller of Return Path

One thought on “Ten Dimes May Make a Dollar, But Is It Worth It?

  1. Stephanie –

    One of the best blog posts I’ve read in some time. I’m sharing it internally (at Bronto) as well as to all clients. You nailed it. Thanks.

    dj at bronto

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