Focus Earlier In Subscriber Lifecycle To Drive Higher Lifetime Value

One of the great benefits of having access to a large consumer panel is that you get to test a large number of hypotheses about what makes an effective email marketing program. Over the last few years, analysis of this data has shown that there are a variety of available and effective marketing techniques not frequently used by email marketers. I like to call these “missing levers.”

New research has highlighted another set of missing levers. We recently completed a  study of the email subscriber lifecycle, which offers insights on new subscriber engagement during the first year after signing up for a brand’s email program.

(Note, a lot of the ideas below are borrowed from a recent blog post by writer Guy Hanson,  as well as the work of Return Path’s Lifecycle Insight research team).

Our analysis includes some very interesting findings:

  • Less than half of new subscribers provide an email address that they actively engage with.
  • First message received (generally the welcome email) generates an average 4% complaint rate.
  • One third of new subscribers churn within the first 30 days.

This feels like a lot of lost opportunity. With a little bit of math, it’s pretty easy to show that improving the client lifecycle has a huge value. According to the DMA UK, the average lifetime value of an email address is ±$32 (£28). With a simple calculation, you can show that if a sender with 1M subscribers can extend average time on list by a single month, they will create the best part of an additional $1 million in program value.

However, marketers don’t seem to focus on the “leverage” created by improved retention. According to Litmus, only one quarter of email programs measure customer lifetime value. (However, 40 percent are planning to start tracking it this year.)

To improve subscriber value, obvious areas of focus should include:

  1. Focus on acquiring active addresses. Take a look at activity metrics by days-on-list for different sources of acquisition and focus more on those that have higher activity. Experiment with changes to address capture forms to determine what value propositions and calls to action acquire more active subscribers.
  2. Consider starting re-engagement/win-back initiatives sooner. Sending a win-back campaign at 180 days is far too late for many subscribers.
  3. Introduce a broader messaging mix. This could include more personalization, triggered messaging, or new types of newsletters.
  4. Establish trust. State the value to the subscriber upfront and deliver consistently on that value.  If it’s achieved, you should see an improvement in the initial 30-day churn rate.

What about you? Are you thinking about improving your customer lifetime value in 2019?

This post originally appeared on Media Post.

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