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Subscription Marketing with Email

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  • 1. PROFESSIONAL INFORMATION PUBLISHING, MEET LOW-COST MARKETING/ USING LIFECYCLE EMAIL MARKETING TO WEATHER THE POST-RECESSION ENVIRONMENT NICOLE CATHCART/ THE JOHNS HOPKINS UNIVERSITY
  • 2. many companies have significantly cut marketing budgets over the past year. B2B Magazine (2009) survey data suggests that 60% of marketers had their budgets cut. Even in 2010, the majority of organizations are looking at cutting or maintaining their lower budget levels (Exact Target, 2010). Although the worst appears to be over for the economy, a cautious approach to spending pervades. Many organizations have increased their email marketing efforts, as the medium remains one of the lowest cost marketing channels. Although both media have a low cost of entry, competition remains fierce for those relying on email marketing, both inside and outside of the publishing industry. How can marketers build creative and effective email and marketing programs with limited budgets? In an attempt to survive the recession, More than many industries, publishing faces unique challenges due to the advent of the information age. While the internet is a powerful sales tool, its free content is often a direct competitor to those selling information. As the age of print fades and the digital revolution becomes the standard, publishers must endeavor to evolve their products and their marketing simultaneously. However, understanding customers and their lifecycle can help marketers craft effective and powerful outbound marketing programs at the fraction of the cost of traditional channels, such as direct mail.
  • 3. As of April 25, 2010, Bronto (2009) reported that the publishing industry had the best average deliverable rate for emails, 99.3%, yet maintained an average 23.9% (23.5% average across all industries) open rate and a mediocre average 4.2% (5.8% across all industries) click-through rate. The best spent money in B2B email is in data quality, as segmentation offers unlimited opportunities for personalization--which is only effective if data is clean. Nothing ruins a personalization and customization program faster than dirty data. However, this data suggests that many publishers have managed to keep data clean, but have not yet managed to determine how to engage recipients enough in email to get them clicking. Implementing Lifecycle Programs Segmentation is the key to effective email marketing. To take advantage of the personalization that is possible within email, marketers must segment lists into demographic or behavioral segments that respond differently to various message approaches. Lifecycle marketing is a key opportunity within the publishing industry. Jeff Pedone of Incisive Media describes this approach as, “targeting individual customers based upon their previous relationships with us and anticipating the future needs. Messaging is then crafted for a specific purpose (i.e., moving registrants from trial to paid subscribers) and triggered at specific intervals, based upon specific actions taken by the recipient” (Johnson-Greene, 2008, p. 8). There is no single answer as to what works best in behavioral or demographic targeting. Frequency and format of emails depends on several factors, starting with the lifecycle stage of the customer or potential customer. An initial period of testing, reporting and analyzing data to generalize for an entire email program creates a foundation that allows for future creativity and innovation. BUILDING A STRONG EMAIL PROGRAM TAKES CREATIVITY AND PLANNING BEHAVIORAL SEGMENTS Inactives (has not opened an email in the last 6 months) Actives (opened an email in the last 6 months) Opens (opened an email in the last month) Clicks (clicked an email in the last month) DEMOGRAPHIC SEGMENTS Area of Interest Geography Function /Title Level Organization Size Industry {The two most common segmentation opportunities in B2B Marketing: Demographic- Based and Behavioral-Based
  • 4. Prospects tend to be the largest group of possible email addresses, and will have the lowest conversion rate overall. Gathered from conferences, free white papers, other marketing channels such as telemarketing, and other lead generation techniques, prospects are a core part of an email marketing plan. Renting email lists, utilizing search engine marketing or placing online display ads that focus on generating leads can grow qualified prospect lists. They are also one of the most time-sensitive audiences, with some sources suggesting those who don’t buy within 30 days are unlikely to buy at all (Magill, 2009, p. 20). Converting prospects into first-time buyers means trying lower- cost items or more substantial discounts towards the end of the 30-day term. FreeeNewsletterSubscribersrepresentanunparalleled up-sell opportunity. Although technically prospects, Lifecycle Segments PROSPECT FREE ENEWSLETTER SUBSCRIBER TRIAL ACTIVE CUSTOMER ACTIVE/NEAR RENEWAL CUSTOMER CANCELLEDCUSTOMER RENEWAL CUSTOMER EXPIRED CUSTOMER
  • 5. their familiarity and frequent interaction with the brand gives them a more valuable categorization. While free eNewsletters have opportunities for advertising, using these emails to engage customers in both the email content, and the landing pages where the stories continue, gives marketers multiple options to convert free subscribers into paid. Trial customers, or those in a limited time subscription to an online or print product, demand a multi-channel reminder as to why they should convert to full subscribers of a product. The attention paid to a trial subscriber is a preview of the attention paid to a customer, so it must be personalized, consistent and valuable. Publishers that use email, direct mail and phone touches to their customer base can remind potential customers of the value of the product, and features of the product that may not be obvious. Once a customer has decided to try one product, marketers should take care not to bombard that user with other offers for other products. During an active trial, the focus must be on closing a sale, not presenting other offers. Active customers are the most valuable of any other email subscribers, and marketers must take care to offer products to this group based on what is already known about their buying habits. If a customer subscribes to a newsletter about the Family and Medical Leave Act, for example, it follows that they might also be interested in forms that ease compliance or a training on updates to the regulation. Rather than offer a plethora of options, many that may not reflect what is already known about the customer, target the majority of communications to core areas of interest. Somewhere between an Active and a Renewal Customer, those within one-three months of renewal should receive only reminders to renew their subscription--ultimately where they are of the most value to the organization. While email renewals may not transcend the effectiveness of mailed renewal notices, there are cost-savings associated with starting with email renewal notices. Consumer Reports sees a 10-49 percent response rate for their renewal emails (Cooper and Joukhadar, 2006, p. 18). Rather than using a discount offer or free product to entice renewal, driving customer loyalty by offering a thank you gift after renewal strengthens a brand’s service reputation. Email Formats In email, as in most advertising, using creativity to drive attention is a key to success. The first step is to weigh three elements of an email equally: THE FROM LINE THE SUBJECT LINE THE BODY Often marketers spend hours choosing colors and images for an email and forget that the recipient may never see that work if the From Line and Subject Line of an email are not captivating. Varying the From Line, also alias, to include a person’s name, such as an editor or sales person, can increase opens. However, building loyalty also means utilizing your brand name. Testing between these options for prospects (as anyone else in your lifecycle stages should want to hear from your brand name), can affect open rates and give you a better chance to convert. SubjectLines,eveninpersonalcommunication, can make or break an open. Short, but informative; direct, but enticing--the options abound. Personalization in a subject line can also create an intrigue in the recipient. For those with fewer resources to test email creative, the subject line is the easiest and fastest way to affect response rates through careful list splits and tests. The Body of an email drives the user to click, sometimes direct to purchase, for your products. Emails made entirely of graphics, for example, can make it impossible to find links to purchase. While graphics can grab attention, business email accounts may block images or treat images with high-proportions of images as spam and send them to junk mail boxes. A mix of attention-grabbing and enough information to entice the recipient for more details can be difficult to master, but testing for your customers can produce the best mix.
  • 6. Customers with only recently expired subscriptions, considered almost a subset of renewals, are clear targets for renewal to the publications they once subscribed to, but may have let subscriptions lapse because of cost, content or delivery method. Giving these subscribers moderate discounts to re-subscribe, or offering comparable products as an online version, can increase conversion. Customers with accounts more than six months lapsed have resisted many attempts to gain their business back. For these renewal customers, the key is an offer they cannot refuse. Rather than a moderate discount, these customers warrant more extreme multi-year discounted offers or deep product discounts. Because the conversion rate will be low, these discounts, given infrequently, can give publishers another chance to regain the loyalty of a customer. Cancelled customers have two distinct values to a publishing marketer. They represent both an opportunity to listen to customer complaints and feedback to produce better products with better marketing, and they give marketers an opportunity to try again to present a valuable product. In asking for customer feedback in an online survey, key trends can be revealed in why customers may not be interested in a product. In completing the survey, offering the customer a discount for a future purchase may be enough to reengage them in your brand. Metrics 101 Whilecreativitymaybeessentialtothesuccess of an email program, analytics provide the foundation for sustainable email programs. Any email program must be tested, managed, measuredandreportedonwithafewindustry- standard performance measures. Deliverable Rate: The percentage of emails that are delivered to the intended recipient’s mailbox. Deliverable rate is the best measure of your list quality. Bounce Rate: Bounces can be divided into two categories: hard and soft. Hard bounces should be purged from your database, as those email addresses no longer exist in the receiving domain’s system. Soft bounces, however, can be due to full mailboxes or server downtime— but these may still be good email addresses. Purge soft bounces after they have bounced more than three times. Opt-In/Out Rate: A monthly measure of the numberofpeoplesubscribingandunsubscribing to your lists. With a healthy organic list growth plan, your opt-in rate for prospects should exceed your opt-out rate. Open Rate: The open rate measures the audience that views your email. Although an open rate is only an intermediate measure of success, open rates are the best indicators for subject line and from line success. Click-through Rate: Measured against opens, theclickthroughratemeasurestheeffectiveness of your email format, and the audience interest in your product. This expression of interest can be followed up with other channels—phone, for example, to move an interest to a sale. Conversion Rate: Measured against clicks, the conversion rate is the outcome measure for any email—revenue.
  • 7. email is only one small piece of what can be a successful overall, multi-channel marketing program. However, unlike some media, it can be a low-cost way to see big return in revenue and customer satisfaction. Email pro- viders range from free to expansive enterprise-wide solutions, each offering a range of features for segmenta- tion and analytics. However, to truly recognize the power of email, a one-size-fits-all approach will not work. In fact, emailing without personalization to your customers or regard for their experience will only damage your email list size and your brand reputation. Remember, References Bronto (2010, April 25). Delivery Statistics. Retrieved April 28, 2010, from http://www.bronto.com/knowledge/statistics ExactTarget (n.d.). Marketing Budgets 2010: Effectiveness, Measurement &Allocation Report. Retrieved April 28, 2010, from http:// www.slideshare.net/econsultancy/marketing-budgets-2010-report-slideshare Johnson-Greene, C. (2008). How to deal with email list fatigue. Circulation Management, 23(9), 8. Joukhadar, K. & Cooper, J. (2006). E-Marketing in an Integrated World. Circulation Management, 21(5), 18-20. Maddox, K. (2009, November 16). 2010 Outlook Survey shows marketing budgets to grow. B2B Magazine. Retrieved April 19, 2010, from http://www.btobonline.com/apps/pbcs.dll/article?AID=/20091116/FREE/311169985/1444/FREE

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