Increase Profitability and Deliverability Within Your Inactive Customers
Increase Profitability andDeliverability Within Your Inactive Customers
Eric Kirby Hayley OsherCEO Director, Member Engagementekirby@connectionengine.com firstname.lastname@example.orgTwitter: @ConnectionEng
Inactive Subscribers – Why care?• Often 50%+ of a subscriber file Why Inactive? Not “in market”• Not mailing causes issues Passive unsub – Potential revenue impact Delivery issues – Lost future contact opportunity Seldom used account• Mailing causes issues. Pressure to suppress: – Deliverability concerns – Customer satisfaction – Desire to reduce marketing waste
What are your options?• Attempt to reactivate (Messaging, Offers)• Reduce mail cadence• Suppress• How will you decide who to suppress? – Who has the potential to become a valuable customer? – Who is likely to be worth little no matter how many times mail? What if you knew the future value potential among the inactives?
How?• Determine “Value Potential” for each subscriber by leveraging external data and analytics.• Process: – Quantify attributes of Best Customers. – Develop a mathematical model to predict customer value. • Based on how much subscriber “looks like” a Best Customer. – Use model to segment subscribers by Value Potential.• Fast and cost effective through SaaS application
Case Study• Leading flash sales site. Acquired by Nordstrom.• Sale events each day featuring best names in fashion, beauty, kids, and home.• Large and rapidly growing member base.
Segmentation Strategy• Sophisticated approach to segment users by observed purchase behavior and email engagement. – 38 defined member lifecycle segments defined by time on file, engagement, and purchase activity.• Aggressively suppress inactives to minimize deliverability issues.• How to differentiate among inactives? – By definition, little available data to segment
Step 1: Profile High Value Customers• High Value Members have distinctive attributes compared to Members who have never purchased.• Examples: High Value vs. Connection Engine Attribute Non Buyer Home Value 2.0 x Online Purchase Activity 2.8 x High Fashion Apparel Buyer 3.5 x "Young & Hip" Lifestyle 2.6 x Amex Cardholder 3.3 x
Step 2: Segment by ―Value Potential‖• Using external data attributes, mathematical models are used to predict individual member “Value Potential”. Value Potential Segment % of Members Relative Value 1 - Highest 10% 16 x 2 20% 8x 3 20% 4x 4 20% 2x 5 - Lowest 30% 1x
Step 3: Programs by Segment• New members segmented daily. Value Potential Segment Source 1 2 3 4 5 A 12% 16% 35% 31% 7% B 6% 27% 29% 26% 12% C 3% 13% 17% 33% 35%• Can identify new subscribers who have the potential to be high value from the moment they subscribe. – Enables tailored communication / offer strategy• Inactive members: reactivation campaign implemented and measured by Value Potential segment.
Relative Performance by Segment One Month after Reactivation Message Low Segment High Segment 4.4 3.1 2.2 1.8 1 1 1 1 Open Rate Login Rate AOV Order Rate
Revenue per Member 14x for High Segment• Revenue per Member Low Segment High Segment 14x higher in High segment vs. Low. 14• High Segment members were 60% less likely to redeem coupon when purchasing vs. Low!• High Segment inactives 1 represent ideal long term customers to re-engage. Revenue per Member
Conclusions• High Value Potential segment members represent best of the inactive universe. – Investments to reengage this segment – Worth keeping on file even after long periods of engagement• Low Potential inactives represent lowest value members. – Unlikely to ever become valuable customers – Safest universe to suppress• Value Potential segmentation provides a powerful tool to determine who to keep on file, and who to suppress.
Questions?Eric Kirby Hayley OsherCEO Director, Member Engagementekirby@connectionengine.com email@example.comTwitter: @ConnectionEng
SQUEEZING BLOOD FROM A STONE?According to lead judge (for MarketingSherpa Email Awards 2012) Adam T.Sutton, Senior Reporter, MECLABS Primary Research, "Email marketers areconstantly challenged to extract more value from their lists. Many turn toinactive or non-purchasing subscribers to boost conversions – but this canfeel like squeezing blood from a stone.”* *http://www.strongmail.com/resources/blogs/email-marketing-insights/2011/11/travelocity-win-back-campaign-wins-marketingsherpa-email-awards-2012
Case Study—Workopolis• Background—Workopolis is the leading site in Canada who’s goal is to connect Seekers and Employers – We connect the right Seekers with the right Employers, across the country, across a multitude of job categories• Have two types of lists, B2C and B2B • B2B is where money is made by charging for job postings • B2C has no money associated with it but they need to keep users engaged – Currently developing full life-cycle programs for both sides of business – Don’t worry much about invalid account, focus on engagement with ISP’s • Look at recent activity
Job Seeker (B2C) Model• 4 key job seeker behaviors – Visitor Career Alert Creation – Register – Upload a Resume – Apply• Certain key behaviors leads to an email communicating the importance of “taking the next step” – Time relevancy = increased conversion Acquisition Growth Win back Visitor Upload Modify Join Apply Lapsed Career a Your Now Now Users Alert Resume Resume Convert Convert Convert
Targeting Workopolis’ Lapsed Users • What is a lapsed user to Workopolis? Win back – A user who was actively using Workopolis • Have a resume uploaded to the site – Based on last login date • When do we plan to speak to these Lapsed Users lapsed users? – Secondary research suggests that job seeker start looking for a new job after approximately one year in their current role* – Site behavior of the average job seeker • What do we plan on saying to them? – “Thinking of finding a new job?” – We want to “Warm them up” for a return to Workopolis.com *Source: Job Seeker Study, 2010
First Steps to Building a Re- Engagement Program• Why is it important?• Setting proper expectations – Make sure to communicate throughout your organization of your goals and success measurements• Determine What an Inactive Customer Means to You – Leveraging the data you already have – Don’t try to go back too far• Examine the Content You Are Sending Them• Don’t Send Win-Back Emails from the Same System as Your “Master” List – Start slow – Monitor complaints and permanent bounces
Recommendations for Maximizing CTR from Openers• Treat non-clicking openers as a separate segment – Use clicks among all openers to identify members – Include non-clickers and infrequent clickers (clicked on <25% of all opened emails) as segments• Test different approaches to both segments – Calls to action – Copy & Images• Test resends on a limited basis to prevent burnout 24
Things to Remember• Monitor your mailings closely• Don’t try to do to much at first, start slowly and build• Don’t try to over communicate• It is ok to say Good-Bye