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Activation Campaigns: Using Email Behavioral Data to Engage and Reactivate Your Customers


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Today, marketers have access to more customer data than ever before. At the same time, low active subscriber rates suggest that brands are missing out on the opportunity to consistently engage their customers. Savvy marketers are putting subscriber data to work and executing activation campaigns to boost engagement across the board.

Activation programs aim to engage new subscribers from the get-go and wake up inactive customers with tempting offers and personalized content.

In this whitepaper, you’ll learn:
-How to identify key subscriber segments
-The three different types of activation programs
-Where email activation campaigns fit in your marketing portfolio

Published in: Business, Technology
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Activation Campaigns: Using Email Behavioral Data to Engage and Reactivate Your Customers

  1. 1. What’s Inside? This paper addresses why activation programs are important and how a marketer should approach developing them. Specific topics include: • Industry trends that uncover an increasing need for activation programs • Goals and components of a successful email activation program • Types of activation campaigns top brands are creating to wake up their sleeping subscribers • Performance metrics for activation campaigns and how they stack up against base communications 1 Activate & Engage 2 Types of Campaigns Activation Programs: Using Email Behavioral Data to Engage and Reactivate your Customers Most marketers are well aware that using consumer behavioral data to create personalized marketing programs will net a significant increase in marketing ROI. But you may be surprised by just how much more effective these programs are - according to MarketingSherpa, targeted content is outperforming status quo messaging by 200% to 300% on both engagement and conversion metrics.1 In the field of email marketing, activation programs, in particular, have become a critical vehicle to drive engagement and revenue for top-performing marketing teams. The beauty of activation campaigns is that they empower marketers to be proactive, instead of sitting idly by as their customers drift away. Savvy marketers who implement activation programs can welcome recurring revenue and engagement from customers that might have otherwise become inactive (or from customers who are about to become inactive). Activation campaigns can also help identify the truly lapsed customers, so you can weed-out the ‘zombies’ that hurt your email deliverability. The less engaged subscribers are with your emails, the lower your sending reputation and the higher the likelihood of deliverability issues. This is why more and more brands are implementing activation campaigns as part of a profitable email marketing strategy. 3 Using the Data 1.877.937.6245 | | pg. 2
  2. 2. Industry Trends 90% of media interactions are screen-based It is a fascinating time to be an interactive marketer. Change continues to accelerate and consumers are adopting new technologies at a mind-blowing rate. A recent study from Google indicates that 90% of all media interactions today are screen-based.2 And because of the rapid adoption of smartphones and tablets, consumer attention is often split between multiple screens. Yesmail’s Email Marketing Compass report affirmed this finding by establishing that, on average, 30% of consumers view emails in a combination of mobile and desktop devices instead of exhibiting a consistent preference of one over the other.3 This trend has changed the way consumers interact with brands. It has changed their expectations about how they want to be reached, as well as how they research and buy products. For the interactive marketer, new channels and the variety of screens provide access to more information about customers than ever before. Consumer behavioral data is more readily available - marketers can access transactional and point-of-sale (POS) data, engagement behavior data like site visits and social activity, email behavior data like opens and clicks, as well as multiscreen behavioral data on the web, mobile, social, and email. Knowing your customers and how active they are, is a critical component of creating informed activation programs that cater to the composition of your unique database. 1.877.937.6245 | | pg. 3
  3. 3. Industry Trends 20% Engaged by marketers 40% 60% A recent report from Chief Marketer estimates that marketers engage with less than 20% of their overall database.4 Consequently, it comes as no surprise, that the average active subscriber rate across all industries is 7.4%, as per Yesmail’s Q2 Email Marketing Compass report.3 Marketers know they get the most value by identifying and targeting their highly engaged segments, but that doesn’t mean they can’t influence and “bring back” those customers who have become inactive (or the new subscribers who haven’t yet purchased). This is where activation campaigns can really impact a brand’s email programs and bottom line. Advances in technology are making it far easier for marketers to understand email behavioral data and build activation campaigns. Several of the top ESPs (email service providers) now have tools that help marketers continually analyze and segment subscribers, automate lifecycle marketing, and enable targeting based on activity level and customer tenure. As technology improvements continue to lessen the manpower needed to analyze email behavioral data and segment users, we’ll begin to see more brands harness the power of activation programs. 80% 100% 1.877.937.6245 | | pg. 4
  4. 4. ers rib 40 Inactive Up There is no benefit to wearing rose-colored glasses when it comes to understanding your database. You might find the number of inactive subscribers on your list to be frightening, but you are not alone. Depending on your industry, even an 80% inactive population is not unheard of. Before developing your activation strategy, you need to accept some of the bad news before developing a solution to the problem. % Active Su bs c The Inconvenient Truth about Your Audience to 7 • The average retailer has 40-70% inactive subscribers (not opened/clicked in over 6/8/12 months). Confirming this stat, Yesmail’s Q2 benchmark report determined that almost 90% of the retail industry’s mailable subscribers have not been active within 3 months.3 • The first 90 days after you get a new subscriber are absolutely critical. If they are new to your list and they aren’t responding you need to immediately react because response and activity will drop over time. • The number of inactive subscribers in your list will grow. As subscribers get used to hearing from you, their engagement will typically decrease over time. • 0% 1.877.937.6245 | When you consistently mail to an inactive population it brings down your overall performance, conversion, AND deliverability rates (for more information on deliverability, download Yesmail’s deliverability whitepaper, 10 Email Deliverability Myths Debunked).5 The good news is that activation campaigns can and do drive customers to the next level of engagement. | pg. 5
  5. 5. Reasons Subscribers Become Inactive Irrelevant content There are many reasons customers become inactive. As a marketer, you have control over some while others…not so much. Why do customers become inactive? 1. They don’t need or want the product/service at this time – Are they not buying because they are not interested in the product or because they are not ready to buy at this time (seasonal purchase behavior)? You can get a sense of their need by looking through behavioral and past purchase data. 2. Your content is irrelevant – Research shared by Social Barrel and Skadeedle indicates that 25% of recipients find content irrelevant.6 Too many messages Too busy 3. You send too many messages – At a certain point, the customer gets so used to getting stuff from you that they begin ignoring your messages. Anyone with an email account has opened it in the morning to find it overflowing with messages. Inboxes are flooded and sometimes subscribers just get overwhelmed and tune out. According to research shared by Social Barrel and Skadeedle, 47% of consumers say they receive too many emails.6 4. They are too busy – Whether it is because Bobby is home from school with the flu, they have a deadline at work, or they don’t want to miss the finale of Game of Thrones, sometimes consumers are too busy to bother with your emails. Once they get used to ignoring your emails, engagement can drop off. 5. They don’t see it – Your messages may be getting caught in the junk folder due to deliverability issues. Also, email providers like Gmail have instituted separate folders for promotions that might not be viewed as often as the main inbox. Multiple mailboxes 1.877.937.6245 | 6. They have multiple email accounts – Whether it is because the customer got a new account and didn’t close the old one, or because they have separate emails for work and personal, or they have a separate account for only marketing messages, most consumers have multiple accounts. In fact, 43% of voters in a Lifehacker poll said that they deal with 4-6 inboxes.7 | pg. 6
  6. 6. An Introduction to Activation Programs Goals and Strategies of Activation Programs Most marketers track opens and clicks, but too few of us are digging deep enough and using behavioral data to segment our customer base and create behavior-based email campaigns. According to the 2013 Marketing Sherpa email benchmark survey, only 37% of all surveyed marketers are segmenting email campaigns based on behavior to improve email relevance and engagement.8 And when you look at those marketers who ARE personalizing content, 55% are segmenting based on email engagement behavior and 53% do so based on purchase history. 1. Drive customers to the next level of engagement (for example, drive to first or repeat purchase) 2. Bring back customers who are inactive (it is much more expensive to gain new customers than it is to re-engage existing, right?) 3. Help with list management (track segments and develop optimal content and contact strategies; like knowing when to remove inactive subscribers to protect deliverability) Inactive Subscribers Active Openers & Clickers Activation campaigns are unique in that they are specifically tailored to where your subscribers are interacting with your email and whether they are converting (typically to purchase) or not. If you can track email behavioral data to understand subscribers – Are they opening? Clicking? Buying? What products are they buying? Which devices are they using? When did they become inactive and why? – you can create trigger messages to engage them and bring them closer to your ‘best customer’ segment. First Time Buyers Repeat Customers Best Customers Bring inactive customers back 1.877.937.6245 | | pg. 7
  7. 7. Inactive Portion of Database Elements of an Email Activation Strategy Before developing your activation campaigns, you want to make sure you have defined objectives so you can create targeted campaigns by segment. Start with an analysis to understand how much of your database is active and how much is inactive. Your Email Service Provider should have technology solutions to help with this process, so don’t forget to reach out to them. 43% Reasons for Inactivity 6% 23% 14% Didn’t see it Too busy Not interested 1. Analyze your behavioral data to understand the different levels of inactivity and create segments based on these levels. How you define these segments will depend on your database and specific business model. 2. Once you have done some initial analysis to define segments and identify counts per segment, you will want to track the counts and movement by activation segment. This will help you assess how your database is changing and what the churn is. • Analyze who is active, who is inactive, and how inactive they are (duration). • How frequently do they interact with your email campaigns? Time of Inactivity • How recently have they done so? • Track how the counts of each segment change over time and understand where they are headed. Mar. Apr. May Jun. Jul. Aug. Sept. Oct. For insight on potential database segments, see the Key Segments section on the next page. Activation Campaigns Early 1.877.937.6245 | Mid Late | pg. 8
  8. 8. Segment Purchaser One-time Purchaser Inactive How you define your key activation segments will depend on your business and industry. For example, you may segment by buyers, repeat buyers, one-time purchasers (those who bought only once), and inactive segments by length of time since their last interaction. Find out as much as you can about these audiences and WHEN they become inactive so you can time your activation programs appropriately. The more you know about your customer, the more relevant your activation campaigns will be. You can further divide early, mid, and late segments based on product interest. For instance, if you know a customer hasn’t interacted in a long while but in the past they had purchased science fiction books, you could send them the top science fiction books of 2013 in your “We want you back” message. You have more to offer than just a discount. Talk about what they have missed that they might care about. Purchases Repeat Purchaser Key Segments Types of Activation Campaigns There are three different categories of activation campaigns: 1. Early activation programs – designed to engage subscribers who are NEW to your database (joined within 0-90 days). 2. Mid activation programs – designed to engage subscribers who have been inactive between 3 - 12 months. 3. Late activation programs – designed to engage subscribers who have been inactive for over 12 months. 1.877.937.6245 | | pg. 9
  9. 9. Early Mid Late Early Activation Programs (aimed at subscribers with database tenure of 0-90 days) This is typically your highest performing category as it consists of your newest subscribers. This is also the category that you want to keep the closest eye on. When you start to see an early drop-off in activity, you need to immediately react, which is why it is important to continually track email behavior and create appropriate triggers. Examples of early activation campaigns can include: • First purchase offers – Special offers to get subscribers to make that critical first buy. • Next purchase offers – These triggered campaigns allow you to thank customers for their order and provide a follow-up discount for their next purchase to encourage repeat buys. • “Get more from your emails” (Update preferences) – These campaigns ask the customer to tell you what they want and provides the added benefit of improving your knowledge of the customer so you can provide more relevant content. • Multi-message ‘best offer’ campaign – As the customer begins to approach 90 days of inactivity you can consider sending a multi-message best offer campaign with increasingly improved offers. If they don’t respond to ‘10% off’, send ‘15% off’ a couple of days later, etc. This gives you the opportunity to find the sweet spot or special incentive that gets them to act in the next message. • VIP/Loyalty recognition – Don’t forget to continue to reward your best customers and nudge them towards the next purchase. 1.877.937.6245 | | pg. 10
  10. 10. Early Mid Late Mid Activation Programs (aimed at subscribers who have been inactive for 3-12 months) These programs are designed to bring back subscribers who have been inactive for more than 3 months days, but less than a year. Some of the campaigns from above, like ‘update preferences’ and multi-message best offer emails, also work well for this category. Some additional campaign examples for this category: a. Survey – Surveys can provide a compelling reason for customers to engage and also provide you with valuable insight when you analyze their answers. b. ‘We miss you’ (come back offer) – This type of campaign is similar to a first purchase offer, but designed to bring customers back into the fold. 1.877.937.6245 | | pg. 11
  11. 11. Early Mid Late Late Activation Programs (Aimed at subscribers who have been inactive for over 12 months) This category serves two purposes: 1. You still want to get everything you can out of your subscribers even if they haven’t interacted in a long time. 2. Before retiring subscribers due to inactivity, you want to reel as many as possible back in. You might not get a big response out of this segment, but the value here is finding out which of these customers are actually inactive and determining whether to implement an activation program for them or remove them from your list since their disengagement with your emails negatively affects deliverability. You do not want to drop these subscribers into your base communication flow because that will cause deliverability issues due to lack of response and engagement with your messages. Keep this segment separate and consider it in Purgatory until you decide to ‘retire’ them from your database or attempt to re-engage them. You may ask, “How long should I wait until I finally let them go?” Like most things in email marketing, this will depend on your company, but if someone hasn’t opened in the past two to three years, it is safe to assume that bringing them back is not likely. Tips for developing activation campaigns for this segment: a. Proceed with caution. Start your campaigns using small segments of subscribers to gauge interest and avoid deliverability issues. b. Don’t be afraid to be personal and direct. Use first names: “Hey, Joe, we haven’t heard from you in a long time.” c. You have nothing to lose by sending the multi message best offer campaign to this segment. So don’t be afraid to send your very best offer to bring these ‘zombies’ back. 1.877.937.6245 | | pg. 12
  12. 12. Lifecycle Campaigns Connect and Engage Purchase Cycle Campaigns On-going Communications Where Activation Campaigns Fit in your Portfolio Welcome Transactional (order/ship/ confirmation) Early Activation 0 to 30 days Promotions Welcome Series Bond Get started with your product/tips First Purchase Offer Cross-sell Up- sell 30 to 90 days Events Activation campaigns are triggered off of email inactivity and purchase activity. This means you can email first purchase offers, as part of your lifecycle campaigns, to subscribers who have been in your database for some time, but have not yet purchased. Similarly, to drive customers to the next level of engagement, you can trigger a next purchase offer within your purchase cycle campaigns. Your base communications (on-going promos, newsletters) will run in parallel with activation campaigns and can also be targeted by activity segments as appropriate. Some marketers will send base communications less frequently to their less active segments. Survey Review Products Loyalty/ VIP Recognition Newsletters Shareable Offer On-going Relationship 90+ days Birthday Anniversary Re-purchase Offer Updates Best Customer Campaigns/ Loyalty 1.877.937.6245 | | pg. 13
  13. 13. ROI and Value of Activation Campaigns Early Activation Middle Activation Late Activation Average open rate Average open rate Average open rate 1.877.937.6245 | 91% Increase NO Increase 21% We recently ran a small performance analysis of five leading e-commerce brands with activation campaigns and compared their performance against Yesmail’s portfolio of over 200 email marketers (that may or may not have activation programs). We found that brands that run activation campaigns had a lower percentage of inactive customers. There are many types of campaigns that can be sent to activate customers and prospects under the early, mid, and late activation categories. For our analysis, we selected one example campaign per category to showcase the value of each category. As expected, early activation campaigns typically achieve an open rate that’s 91% above the average open rate of 15.7% for base communications. Mid activation campaigns performed in-line with base communications, while late activation campaigns yielded a 21% open rate decrease in comparison to base communications. In addition, we discovered that clients that deploy activation campaigns have a 13% higher active subscriber rate (opened/clicked in last 90 days) than typical senders. These stats should convince you to reactivate early and catch your customers before they drop off and become inactive. Keep in mind these numbers may not reflect some of the other benefits of the later activation campaigns, like list hygiene. Take the time to fully develop campaign strategies and define success metrics. You need to have realistic expectations about the type of response you will get from early vs. late activation and understand that sometimes the value of the campaign lies in gaining knowledge about your database not achieving high response rates. Decrease | pg. 14
  14. 14. Conclusion Activation programs have become a not-so-secret weapon for achieving optimal consumer engagement. A fully developed activation strategy that uses email behavioral data can prevent customers from becoming disengaged, re-engage those who have become inactive, increase revenue from key segments, and provide valuable information about the interests and preferences of your subscribers. Normal Database Wr on g O Activ e r ffe Segmented Database Too Busy Don’t See It ted Not Interes 19% 14% 22% 13% 1 year 2 years 3 years 4 years As you develop activation campaigns, remember to begin by defining and tracking key segments over time. Find out as much as you can about your audience and when they become inactive. Create various campaign strategies and test them to learn which ones produce the best results. For many marketers, one of the most difficult parts of developing activation campaigns is having the time or analytical prowess to crunch behavioral data and create segments, but that hurdle is becoming less troublesome with technological improvements that make analysis easier. Tools that help you consistently measure and automatically segment based on email behavior, and automate early engagement campaigns, cascading promotions, best subscriber offers and late activation campaigns can be an important asset, so don’t forget to reach out to your ESP to understand how they can help. Successful activation programs should be a key part of your ongoing email portfolio - and if they aren’t, what are you waiting for? The quicker you can reach the customers who have pulled away, the higher your chances of bringing them back. Don’t forget! measure segments over time 1.877.937.6245 | | pg. 15
  15. 15. RESOURCES 1. 2. 3. yesmails-email-marketing-compass-mobile-effect 4. com/files/uploads/2013/03/email-tech-roundup.pdf We power intelligent customer interactions. We give you the insights to recognize and understand your customer to deliver contextually relevant digital communications – while respecting their preferences and privacy. We help marketers evolve their customer relationships through intelligent interactions via technology, insights, and services in a near real-time multichannel environment. We help you compete in the age of the customer. For more information, visit 5. 6. 7. 8. benchmark-report/2013-email-marketing/overview 1.877.937.6245 | | pg. 16