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Email Engagement and Deliverability Study 2011


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Learn everything you need to know about email marketing list management, including the reengagement and re-permissioning of inactive subscribers.

Learn everything you need to know about email marketing list management, including the reengagement and re-permissioning of inactive subscribers.

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  • 1. Email Engagement & Deliverability Study Management, reengagement and re-permissioning of inactive subscribers by major retailers. By Chad White Retail Email Guide / Holiday Guide 2011SWYN, FTAF and Community Links: November 2010 1 1
  • 2. Being an email subscriber is a temporarycommitment. Interests and circumstances change;expectations may not be met over time; emailaddresses are changed; perhaps other channelsbecome preferred. And while things change,subscribers often don’t bother to unsubscribe forvarious reasons, leaving marketers with inactivesubscribers. What a marketer does next can haveserious repercussions on their deliverability, inaddition to depressing their email metrics.To examine the state of inactivity management,we subscribed to the email programs of over 100major retailers using fictional personas. We openedand clicked on the emails we received until one daywe stopped—and let 40 months pass…responsys / Email Engagement & Deliverability Study 2
  • 3. At the end of that more than 3-year period, we found that the majority of retailers werestill sending emails, many of them at exactly the same frequency that they mailed theiractive subscribers.“ISPs are increasingly using engagement metrics to determine deliverability,” says Kevin Senne,Director of Deliverability & ISP Relations at Responsys. “This makes sense for the sender andthe recipient. Senders should want to communicate with interested customers and vice versa.”So continuing to email disinterested subscribers that don’t open or click puts brands’ senderreputations in serious jeopardy, as the mounting levels of inactivity lower engagement levelsamong subscribers, as well as increase the chances of an inactive address being converted intoa spamtrap.Retailers react to inactivesHow major retailers treat subscribers who have beeninactive for 40+ months Continued mailing, no frequency reduction Continued mailing at reduced frequency Stopped mailing, no frequency reduction Stopped mailing after reducing frequency 31% 32% 14% 23%“If over 50% of your distribution list has not clicked or opened a single email in one year, we’veseen major ISPs filter all the incoming email, even that going to engaged subscribers,” saysHeather Goff, Senior Deliverability Consultant at Responsys. “ISPs tolerate even less inactivityfrom high-volume senders with list sizes in excess of 1 million subscribers.”According to Return Path research, only 81% of all permissioned email worldwide make it tothe inbox, with the remainder either routed to junk or undelivered. Poor list hygiene andmanagement of inactivity levels are big contributors to the reduced deliverability, whichtranslates directly into lost revenue.In order to consistently achieve high levels of inbox placement, marketers must develop acomprehensive plan to address inactives. This report will cover all the necessary steps tocreating such a plan.responsys / Email Engagement & Deliverability Study 2
  • 4. Defining inactivityThe first step in developing a system for addressing inactives is to define what it is to be an“inactive subscriber.” It’s important to separate this definition from any existing definitions ofinactive customers.“Often clients have an internal definition of an ‘active customer’ and ‘inactive customer’ thathave to do with website visits, purchase history, customer or account status,” says Goff.“While these definitions make perfect sense from a business standpoint, from a deliverabilitystandpoint they have little bearing. ISPs need to see engagement with email specifically.”MetricsISPs have gone on the record saying that they track user activity in two categories: positiveengagement and negative engagement. Recipient actions that contribute to the Recipient actions that contribute to the positive engagement quotient are: negative engagement quotient are: — Clicking through links — Reporting as spam — Adding to an address to their — Deleting the message contacts or address book — Moving the message to trash — Enabling images — Marking messages as read — Opening the message — Ignoring messages — Scrolling through the messageWhile all of those are factors, the single best measurement of engagement for marketers tolook at is clicks.“From a deliverability perspective, clicks are the only fully accurate measure of activity for anemail recipient because a click is a definitive action taken by the recipient,” says Goff. “Opensare secondarily helpful as an engagement metric, although there are potential inaccuracieswith opens because of preview panes usage and image suppression.”Duration of inactivityISPs each have their own tolerances for how long an address can go inactive, but in generalany activity inside of 1.5 to 2 years is acceptable. This time frame allows for subscribers whoare season shoppers—for instance, those that only purchase from a brand during the holidayseason.Of course, this recommendation should be tempered by the percentage of the marketer’s listthat’s inactive and their sender reputation. If a large percentage of a list is inactive, theacceptable duration of inactivity decreases.“I recommend breaking a distribution list into active and inactive segments and trackingconversion, revenue, complaints and spamtrap hits by segment,” says Goff. “That waymarketers can learn what the risk segments are for their own mailable universe, as this varies.”responsys / Email Engagement & Deliverability Study 3
  • 5. Case Study Locating the Line on Engagement After sustained filtering and sometimes blocking at some of the major ISPs, a large retailer set out to establish what level of engagement was required among their audience to maintain revenue goals and also avoid costly deliverability issues. Solution We worked with the client to establish a “safe” mailable universe by using a testing methodology that allowed certain engagement types to be mailed on certain days as separate campaigns, allowing us to track and monitor engagement, conversion or revenue generation, bounces, complaints and spamtrap hits by segment type. Once we determined the more risky and less risky segments, the data guided us to the tipping point of deliverability issues vs. the “safe” mailable universe. It was imperative to apply this criteria to all email programs and not just the full file mailings as spamtraps and inactive email a ddresses can be mailed from triggered programs as well. Result This retailer established that recipients that had opened or clicked in at least one email within the last 9 months could be safely emailed routinely. The more engaged then recipient the more frequently emails could be sent. The inbox deliverability rate went from low 80% to high 90% based on establishing a global business rule policy to the universe selection process.Reengagement strategiesOnce a definition of inactivity is in place, the next step is to trigger changes in content orfrequency—or both, as we would recommend—as part of a reengagement strategy. Ideally,changes should be initiated well before a subscriber meets the definition of inactive.“Instead of waiting for recipients to become inactive,” says Goff, “it’s best to observe their lackof engagement as it develops and send them your best offer or highest performing campaignsand potentially at a lower frequency.”It’s also wise not to wait too long before making these efforts, as the longer subscribers areinactive the more difficult it is to reengage them.“In tests that we’ve done with clients, the vast majority of reactivated subscribers wereinactive for less than 18 months,” says Jon Stanesby, Responsys’ Associate Director ofStrategic Services, EMEA. “We’ve seen very few coming back after being inactive for morethan 18 months.”Reducing frequencyDecreasing the frequency at which inactive subscribers are mailed is a defensive tactic usedto boost the level engagement seen by ISPs while continuing to give these subscribersopportunities to engage.“This approach reduces the chances for inactive recipients to complain and improves thesender’s reputation at the ISPs,” says Goff, “because they’ll be sending to a more engagedaudience most of the time while still keeping their less engaged audience warm.”responsys / Email Engagement & Deliverability Study 4
  • 6. We found that the majority of retailers in our study reduced the frequency at which theymailed inactives at some point before the 40-month mark. On average, retailers reduced howoften they mailed inactives by more than two-thirds compared to how often they mailedactive subscribers. 55% Percentage of major retailers that eventually reduce the frequency of mailings to inactives 69% Amount that email frequency is reduced among major retailers that reduce the frequency of mailings to inactivesContent tacticsOne of the reasons that subscribers become inactive is because what is being sent to themisn’t resonating, so changing up the content can be an effective component of a reengagementstrategy. However, we found that only 16% of retailers tried to reengage inactive subscriberswith different content. 16% Percentage of major retailers that send reengagement emails to inactivesHere are some content tactics that marketers can try to catch an inactive subscriber’sattention:Most compelling emailsWhen marketers reduce the frequency of emails that they send to inactives, it gives them theopportunity to only send their top performing emails to that segment.For instance, OfficeMax only sent their “Weekly Ad” emails to inactives, deciding that theirbest shot at re-engaging subscribers was to get them back into their stores. Costco Wholesaletook the exact opposite approach, sending inactives just their online coupon offers. Buy.comreduced their frequency dramatically sending emails every month or two, allowing them to giveinactives only their best deals such as their Cyber Monday offers.Exclusive offerSending the richest, best performing offer is a tried-and-true reengagement tactic. Forexample, Superstore, Road Runner Sports and sent 25% offoffers, but they were sent at most a few times over several months and were interspersedwith broadcast promotional offers.While those retailers used a reengagement email only very occasionally, others and made them central to their appeal to inactives.For instance, SmartBargains sent nearly 40 reengagement emails over a 3-year period;and after about a year of inactivity, subscribers only received a “20% offeverything” reengagement offer repeatedly.responsys / Email Engagement & Deliverability Study 5
  • 7. In this reengagement email, Spiegel positions their generous 30% off offer prominently along with messaging that the subscriber has been missed.Make sure that the offer used in a reengagement email is truly exceptional. If a brand offers20%-off coupons all the time, that offer isn’t likely to be effective at reengaging inactives.Different subject linesJust like apology emails have their set of subject line key words, the subject lines ofreengagement emails often include key word phrases like “we miss you,” “come back”and “it’s been too long.”Macy’s took a unique approach of sending the same email content to both active andinactive subscribers but using those key word phrases to create an alternative subject line fortheir inactive segment. Here are some sets of Macy’s subject lines sent to each segment: Subject line sent to active subscribers Email exclusive: $25 off our favorite trend + Free Shipping! Subject line sent to inactive subscribers Come back and enjoy an extra 15% off + Free Shipping at our Home Sale! Subject line sent to active subscribers Women’s Fashion Clearance: Save 50-75% + Free Shipping! Subject line sent to inactive subscribers Shop with us again & save 50-75% + Ship for Free! Subject line sent to active subscribers Super Saturday: Limited-time deals for her + Free Shipping! Subject line sent to inactive subscribers It’s been too long! Get great weekend deals + Free Shipping. Subject line sent to active subscribers One Day Sale: Incredible deals, web busters & Free Shipping! Subject line sent to inactive subscribers We miss you! Save big at our One Day Sale + Ship for Free.responsys / Email Engagement & Deliverability Study 6
  • 8. Victoria’s Secret also used different subject lines for their inactive segment, but they alsosent completely different content and actually sent their inactives more email than theiractive subscribers.Email formatMany ISPs block images by default, diminishing the effectiveness of image-heavy emails,especially among inactives. Marketers can try to get their message across more clearly byusing HTML text for the primary messaging of a reengagement email.“Design the email with consideration for images being off by default,” suggests Goff. “Theemail should be highly valuable but also very simple and clear. Including more text that willshow even if images are off by default is key.”Preference updateIn addition to trying to get inactives to click on an offer, consider presenting them with anopportunity to update their preferences, either by including an “update your preferences”request in the preheader at the top of emails or as the primary call-to-action in areengagement email.Elevate the unsubscribe linkInactives are a danger to deliverability because of their low engagement as well as their higherpropensity to hit the “report spam” button. Including a second “unsubscribe” link in thepreheader at the top of emails to inactives reduces that danger by providing a more obviousway to opt out.“ISPs do not penalize marketers for unsubscribes, but they do heavily penalize marketers fortoo many complaints,” says Goff. “So if there are recipients on your list that simply do not wantto get promotional emails from you anymore, it’s best to allow them to easily unsubscribe vs.complain. We’ve conducted tests with several clients and the trending of unsubscribe ratesslightly upward and complaint rates downward is stark and consistent after adding anadditional unsubscribe option at the top of emails.”But don’t let subscribers go inactive for too long before using this tactic, warns Senne.“The unsubscribe link is all about the trust you have built with the recipient,” he says.“Pushing up the unsubscribe link may be a benefit early in the messaging plan, but aftermonths and months of inactivity, the user is more likely to report the message as spam.The passing of time with no interaction breaks down the trust of the recipient.”Reengagement successThe goal of reengagement programs is to get inactive subscribers to open or click. It doesn’tmatter if that click is on a link to buy a product or on a link to update their preferences, visita Facebook page, or participate in a poll, so don’t shy away from using a variety of tactics tosecure that click.responsys / Email Engagement & Deliverability Study 7
  • 9. Case Study Deploying a Spectrum of Reengagement Tactics This large retailer had nearly 2 million subscribers who had not opened or clicked in over a year and wanted to reactivate at least 10% of them. Solution We worked with the client to develop a battery of 10 tests in three general areas: 1 / Subject lines (length, tone, branding, personalization, etc.) 2 / Timing (time of day, day of week, website peaks, etc.) 3 / Content (product vs. editorial, length, etc.) Over four weeks, the tests were randomly run against a portion of the inactive list. Result The approach successfully reactivated 16% of those included in the test. Those contacts that didn’t bounce, unsubscribe or complain would be put through the same process again to boost the reactivation rate even higher before finally being re-permissioned through a separate program. The findings also allowed the retailer to modify their regular campaign content strategy to attempt to address disengagement before it happens.Removing inactivesIf inactives don’t respond to reengagement efforts, eventually they should be removed frommailing lists because of the deliverability dangers. However, we found that fewer than half ofmajor retailers stop mailing subscribers who have been inactive for 40 months—which is wellinto the danger zone. 46% Percentage of major retailers that eventually stopped mailing inactive subscribersAmong those retailers that did stop mailing their chronically inactive subscribers, on averagethey ceased mailing them after 28 months of inactivity. That’s a bit outside of ourrecommended ceiling of 24 months of inactivity. 28 Average number months of inactivity before major retailers stop mailing subscribersRe-permissioningAs a last-ditch attempt to save inactives from being removed, some marketers may find somepeace of mind and nominal success by taking the intermediate step of sending a re-permissioncampaign. These emails ask a subscriber to confirm their continued interest in receiving emailsby a certain date or else be removed from future mailings. Some marketers may also undertakethese campaigns in order to remove blocks at an ISP.responsys / Email Engagement & Deliverability Study 8
  • 10. “From a deliverability perspective, re-permission campaigns are needed when a sender isbeing heavily junk foldered (80%-90% or more) at any given ISP for an extended period of time(more than 1-2 weeks) and inactivity or spamtraps are the root cause of the junk foldering,”says Goff. “In order to identify the audience that should be sent a re-permission a full inventoryof actives vs. inactives and business terms and time tables for each must be established.”Among the retailers that we looked at, 16% sent re-permission emails before stoppingmailing inactives. However, because re-permission campaigns are often only used in responseto a block and therefore aren’t always a permanent triggered campaign, this figure may notbe indicative of current usage. 16% Percentage of major retailers that send re-permission emails to inactives before ceasing mailing them“Ideally, marketers should have a triggered program in place that re-permissions recipientsthat have been inactive for a long time instead of waiting for a large accumulation of inactives,”says Goff. “The damage that a large segment of inactives can cause you from a filtering orblocking perspective is much greater than business opportunity these inactive recipientsprovide. We’ve seen that up to 90% of revenue is obtained from email recipients that haveclicked and opened one of your emails within the last 4 months. The percentage of revenuecontribution in the more inactive segments becomes progressively less significantly,eventually becoming negligible. Accepting this helps executives understand the long-termvalue of an automated re-permission program.”Re-permission emails tend to contain a lot of HTML text to ensure that the message renderswhen images are blocked and generally have straightforward subject lines. For instance, thesubject line of Home Depot’s re-permission email was “Please Confirm Your Subscription + $5Off Your Next Order”; Spiegel’s “Is This Goodbye? Your Subscription is About to Expire”; andOffice Depot’s “Important Information From Office Depot: Please Reconfirm Your EmailAccount Subscription.” Even with images blocked, this Office Depot re-permission clearly delivers the the call-to-action. Also, Office Depot keeps the focus on that one call-to-action by jettisoning their navigation bar, sharing links, and administrative links which might distract the subscriber and muddle the response.responsys / Email Engagement & Deliverability Study 9
  • 11. Home Depot’s re-permission email also renders well when images are blocked and gives subscribers both a positive and negative response to choose from.A series of emails tends to be most effective. Each email in the series should increase the senseof urgency and clearly articulate that the recipient will no longer receive promotional emails ifno response is received.“Whether a re-permission campaign is a single ‘sudden death’ email or a series of multipleemails, success is measured by any response—good and bad,” says Goff. “Keeping in mind thatthe subscribers targeted have already gone to sleep on your emails, getting 1 out of every 12recipients to respond is a solid re-permission effort.” Case Study Re-permissioning to Remove Black Listing This large retailer offered a rich incentive in exchange for email sign-ups, however there was no verification process to validate that the email addresses were accurate, current or even real. As a result, the first few emails sent to any new subscriber bounced at a rate of 40% to 60%. ISPs penalize marketers for sending to bad email addresses that bounce at a rate of 5% or more and so this was causing blocks by ISPs as well as the collection of inaccurate email addresses that could be spamtraps. The accumulation of spamtraps caused a black listing at a widely referenced black list and heavily impacted the reputation of not only the marketer but also the ESP and bandwidth provider sending emails on behalf of the retailer. Solution We worked with the client to do an inventory of the database of responders vs. non- responders and quarantined the non-responder segment inside a designated time frame. A re-permission email was created to conduct a mass cleaning out of all bad email addresses and non-responders. Spamtraps do not click so any non-responders from the campaign should be removed and effectively cleaned off the list. Result The bounce issue was brought back under control and the black listing was removed. Quickly the reputation of the mailer was re-established at the ISPs and inbox placement was once again in the high 90% range on a regular basis.responsys / Email Engagement & Deliverability Study 10
  • 12. ConclusionDeveloping a programmatic approach to addressinginactives is critical to maintaining good list hygiene,preserving a solid sender reputation and ensuringhigh deliverability of emails. Start by coming upwith a definition of an “inactive subscriber” that’sseparate from any definitions of an “inactivecustomer.” Then create a reengagement strategythat uses changes in email frequency and contentto keep subscribers from becoming inactive. Andfinally, establish rules for removing inactives frommailing lists and consider creating a triggeredre-permission campaign to give wayward subscribersone last chance.responsys / Email Engagement & Deliverability Study 11
  • 13. About the authorChad White is the Research Director at Responsys, a leading provider of email andcross-channel marketing solutions. The author of the Retail Email Blog and dozens of researchreports, Chad is an authority on email marketing strategies and trends in the retail industry.In addition to working with Responsys clients, he is an Email Insider columnist for MediaPostand has been interviewed by the New York Times, USA Today and others.About ResponsysResponsys is the leading provider of email and cross-channel marketing solutions that enablecompanies to engage in relationship marketing across the interactive channels customers areembracing today—email, mobile, social, display and the web. With Responsys solutions,marketers can create, execute, and automate highly dynamic campaigns and lifecyclemarketing programs that are designed to grow revenue, increase marketing efficiency, andstrengthen customer loyalty.Responsys’ New School Marketing vision, flexible on-demand application suite, and customersuccess-focused services aim to deliver high ROI, increased levels of automation and fasttime-to-value. Founded in 1998, Responsys is headquartered in San Bruno, California and hasoffices throughout the world. Responsys serves world-class brands such as: American FamilyMutual Insurance Company, Avis Europe, Brooks Brothers, Continental Airlines, DeutscheLufthansa, Dollar Thrifty, Lands’ End, LEGO, LinkedIn, Newegg, Orbitz, Qantas, SouthwestAirlines, and UnitedHealthcare. For more information about Responsys, visit / Email Engagement & Deliverability Study 12