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Email is a bit of a special medium. Most people have got an email address that is unique to them, which makes it more in common with a mobile phone number than a postal address.

An email address is individual (most of the time) and it can be linked closely to the customer lifecycle using response data alongside RFM data.

This lifecycle can be tracked, measured, anticipated and managed. Here are some ideas on how you can use the stages of the lifecycle to develop strategies that prolong the relationship with your customer and increase LTV.

What are the stages?

As you may have noticed, this knowledge of the customer is going to require customer data, allied to the email address. This might be a tough one, but the bottom line is you need this information to know what to send to the customer and when to send it.

Generating sustainable revenue from an email list is going to require information about the customer, and in this piece, we will consider the objective for each of the stages of the lifecycle.

1. Prospect

This is a tough one for email, as the channel was often abused by mass mailing of cold lists in an effort to generate revenue. Although this did work for a while, changes in the email environment led to severe deliverability problems for some mailers and the decline in the use of cold email lists in the B2C markets.

Irrespective of the methods used to drive traffic to the site, the first key element is data capture.

Objectives for data capture

Obtain a clear and valid email address

Many mistakes are made in the data capture process and no matter how many field rules are put in place, a spelling mistake will create an invalid email address. One of the best ways to reduce the mistakes is to require that the email address is entered twice.

Obtain permission

There are a number of rules that surround gaining permission, which depend on the situation. You will need to ensure that your permission process is legal as well as making sure you make the most of the data capture process. The conversion rate between email address capture and permission is an important one. It’s no good having lots of emails on your base without the permission to market to them.

Get the email address early in any process

Gaining email permission early is very important. Without someone’s email address and their permission, you can’t market to them. Gaining the email permission early will allow you to follow up with an email if the customer fails to complete the process. 

This effectively gives you more chances to build a relationship and make sales. Without permission, you can’t do that. 

Obtain as much relevant and useful data as possible

This can be a fine balancing act in a transactional process, where simplicity of process can have a measurable impact on the conversion rate. One way to achieve better data capture is on the confirmation page of the sale when the transaction has been completed.  A few simple questions, allowing actionable segmentation in the future, will add immediate value to the data.

Break up the data capture stages

The first stage of any sign up or transactional process will generally be First Name, Surname, Email address, permission statement. (This could be dependent on the data capture process. Further details available from the DMA and ICO).

Once they submit this information, you have the means to communicate in the future even if they don’t go on to complete the registration or sales process any further. This allows the use of basket abandonment emails, which are important to ensure your basket conversion is optimised.

2. Welcome

Registration

Once the data has been captured and the recipient is now on the database, the next thing to do is to welcome them on board! It might seem obvious, but it is surprising how many programmes just add you to the email pot. One point to consider is that they are obviously interested in your product or service.

Therefore, if they have registered and not purchased, the objective for this segment should be conversion.

Offers based on pages visited or products viewed can be powerful at this point. Remember, as they are in the market at the moment you must use every opportunity to convert them. This is a key segment of people, time and effort spent crafting a welcome programme focusing on getting the first sale will quickly pay dividends.

First sale

They’ve made the leap of faith that has led to them to becoming a fully fledged first time customer. Now it’s time to treat them as such, thank them for the sale, welcome them as a customer, and tell them you’ll be in touch to let them know of other great things they might want.

It’s also a great time for those savvy marketers armed with information on next nearest products for cross sell.   

It is surprising that often, the welcome email sent after a purchase is made, can in itself generate immediate extra revenue.  

3. Single buyer

These people already have a relationship with you. Email communication should always acknowledge this previous purchase and encourage the second purchase. Although this seems to make sense, how many email programmes use this information?

This is one of the most difficult stages to properly manage. At this stage you don’t yet know how good a customer they might be or how often they will be repurchasing.

You don’t want to send them an email every week, if they only make one purchase a year. It might seem like you are doing a branding exercise, but using email to do this is like using a Hot branding Iron (and likely to be just as popular)!

This is where you need to start looking at the response data (opens, clicks and site visits) to give you a clue as to how active they are likely to be. Look at how recently they have opened and clicked an email. If they have stopped engaging with your communications, frequency could be the problem.

Reduce the frequency of email communications for those who are not showing any intent to purchase. Your customers are going to be happier seeing you in the inbox, if your frequency of sending them email, more closely matches their level of interest.   

4. Multi Buyer

These are the multi purchasers, buying from you several times, and recently! They can be the most recent and frequent buyers of your product, and they will expect you to know and acknowledge that fact.

Simply giving them a status that reflects this is a good starting point. Your loyal customers could be known as your VIP club or something similar to reflect their status.

Loyal

These customers love you. They like you products and services, they even like your emails! Using Engagement RFM models demonstrates there is a strong correlation between online engagement (visits, opens, clicks) and the revenue this group of people generate.

If you are going to invest any money in clever segmentation and tailored content, this is the group that will show you the highest return.  It’s far easier to keep a customer than trying to drag them back once they have gone to the competition.

5. Dormant  

These guys have gone in some way. Maybe they don’t open emails anymore, or they don’t visit your website anymore, or maybe they don’t buy your product anymore.

It doesn’t look good; but it is important to look at all the data before retiring the email address to the dead pot.

Ignoring emails, but still a live customer

Watch this one, they could simply be suffering from too much marketing attention, and have relegated the emails to the junk folder or a special folder that they will ignore anyway. Don’t say goodbye to a customer who is still buying from you.

They may have started to use another email address, so allowing them to lie fallow for a month or two, then sending them an email with quality content or a strong offer might reactivate them.

For some businesses, it is financially viable to use another media such as Direct Mail or a call centre to contact high value customers to update the email address and reaffirm email permission. 

Open and click emails, but are dormant customers

There are lots of reasons why someone might have stopped buying from you for now, but it should certainly not stop you from sending them emails, especially if they are activity opening and clicking them!

Look on each bit of email activity from a customer, as a positive vote, even if they are currently not buying from you. If they are still engaged with your communications, they are more likely to become a live customer again if they are ever in the market.

They have ignored emails for a long time, they are a lapsed customer

They’ve gone. You need to accept it and take it on the chin. Despite all the best intentions of your marketing efforts, they are just not interested in you anymore. It’s easy to spend time and effort for little or no return just to keep them on the data base.

Email database size is a meaningless KPI. The key KPI is the size of your database engaged with you via email, quality not quantity. So, let them go, don’t become the email equivalent of a stalker!

Tim Roe

Published 5 April, 2011 by Tim Roe

Tim Roe is Director of Data and Deliverability at Redeye International and a contributor to Econsultancy. Follow him on Twitter, Google+ or connect via LinkedIn

22 more posts from this author

Comments (9)

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Andrew Steel

Andrew Steel, Business Development Manager at Objective Associates Limited

Great article Tim - it's surprising how many email campaigns from big etailers fail to make the most of a lot of strong conversion opportunities in emails.

over 5 years ago

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tracey branson

Interesting article. I was just questioning the Welcome phase and whether you think it's necessary/feasible to send a personal welcome email to all those who sign up for emails, or infact an automated email suffices after registration?
Thanks
Tracey

over 5 years ago

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Gareth Fryer

It's a good article, the obvious must dos for email. But it does over look a huge shift in consumer behaviour with regard to email communication.

Consumers attitude to email has changed dramatically. People are used to receiving emails, they happily let them pile up in their inbox, from many, many different sources, the days of worrying about storage, saving to spam are gone/going. They might see your email, but completely ignore it - I know I do.

So what's my point? With stage 5, you make the assumption that because a user has ignored emails for a long time, they are a lapsed customer and 'have gone'. It doesn't mean anything else other than they haven't opened your email for a while! And it certainly doesn't mean they haven't seen it.

In my experience with big retail clients, we're seeing more and more that consumers may not open an email for months on end, but then one day out of the blue, they will open, click through and purchase. In one particular case I know, a consumer didn't open an email for over a year, but then one day opened, clicked and spent over £400 in one go. That benefit far outweighs the cost of keeping that consumer on the database and emailing them for a year.

The conclusion to this - don't make the assumption that because consumers aren't opening your emails that 'they've gone' or aren't engaged.

Every time that email pops into their inbox, there's a chance they'll see it and for a split second they remember your brand, who you are and what you offer. That's no bad thing. Keep them on the database, consider disruption messages every so often to target lapsed customers, but don't stop communicating with them, it's just another way to make your brand 'front of mind' for a split second.

Put the consumer first, they don't go to their email to look at an email from your brand, they don't care - it's just a reminder that you exist. Consumers don't want to 'engage' with your email, they allowed you to contact them, that doesn't mean they're going to open your emails. Consumers don't differentiate between channels, marketing people do... They just see a brand they like, or a brand they don't.

It's an unfortunate symptom of the belief that everything in digital is 'directly measurable' and must deliver 'measurable ROI' that we strive to focus on engagement measures based on user action within email.

The truth is, that's only the tip of the iceberg.

There's no surprise that studies have shown consumers who are subscribed to email and follow a brand on Facebook have more value to a brand. Of course they're more 'engaged' because they've opted to hear from you in more than one way. But really, is it just that you have more opportunities to remind them that you exist?

http://thesocialpenguinblog.com/2010/06/30/gianfranco-cuzziol-integrating-email-social-media/

over 5 years ago

Tim Roe

Tim Roe, Deliverability and Compliance Director at RedEyeEnterprise

Hi Tracey, I’m glad you found the piece interesting. We have found that in some circumstances, a welcome email after registration, can improve the conversion rate of registrations to sales. Ideally this type of email would be best sent automatically, using merge fields and dynamic content to personalise the message. With some of the programs I have been involved in, the registration triggers a series of emails focused on conversion before they move into a more campaign based data pot. The important element is to test various creative and programs until you find the combination that best meets your objective (generally a transaction of some sort). Thanks

over 5 years ago

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Kevin Pond

"They’ve gone. You need to accept it and take it on the chin. Despite all the best intentions of your marketing efforts, they are just not interested in you anymore. It’s easy to spend time and effort for little or no return just to keep them on the data base."

Hmm... I disagree with this. From personal experience I can happily ignore and delete for month after month after month. And then I can react to an email because I have a NEED at a specific TIME and the brand/product/service is what I need right then.

over 5 years ago

Tim Roe

Tim Roe, Deliverability and Compliance Director at RedEyeEnterprise

Hi Gareth, thanks for your comments.
Stage 5 is a bit controversial, and I agree with the points that you make. My point is that before you choose the point of no return for the email address, you look at the transactional data as well to decide just how inactive someone is. This is the reason why I broke the dormant segment into the different subsets. The rules for these subsets will vary from business to business and also by different product lifecycles, so it is important to do some data analysis and testing to determine what those rules might be. We have seen evidence to suggest that by treating email customers differently based on their engagement with the media as well as their status as a customer, you can increase ROI over a mass market approach.
Email can certainly be a powerful tool for branding, but it is important for the exercise to be a positive one for the consumer and not a negative one.
Here is a case study that demonstrates email engagement segmentation in action:
http://www.redeye.com/clients/case-studies/getting-personal/
Thanks

over 5 years ago

Tim Roe

Tim Roe, Deliverability and Compliance Director at RedEyeEnterprise

Hi Kevin, thanks for your comment.
Adding to what I have replied to Gareth, I agree with what you are saying, what I am trying to do here is suggest some ways that you can identify when someone has that NEED and the TIME that they are likely to have it. It’s not perfect, and the time frames for some of the segments will be measured in months and not days, but it is better than sending everyone, everything, all the time. Modern email clients filter incoming mail based on user response, if you are sending emails to people who don’t respond to them, you could end up junked or blocked by the ISP’s.
Cheers

over 5 years ago

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Gareth Fryer

Hi Tim

Thanks for your reply.

I think it's interesting and you make some good points. However, I'd like to suggest a couple of things:

a) I understand what you're saying about customer value - 'transactional data'. However, that makes the assumption that a customer will click on the email, go through to the site and purchase. Or, be directly attributable back to that specific email address. In the retail sector, what's to say the email didn't trigger a customer to go in store and buy? Even if they didn't open it, they've still seen it.

Or, if you're promoting a product, what's to say that email popping into my inbox didn't prompt me to search on Google, having a search and buying? It's an overused industry 'buzz phrase' but the user journey isn't linear. And the end user action isn't always a digital one.

b) In my view, you should never stop emailing a customer, provided that email address is valid or they actively say they don't want to hear from you. The cost of emailing those people, is marginal at best once employing economies of scale.

And, as per my earlier comment, just because people don't open, doesn't mean they haven't seen. In the same way consumers don't stop and gaze in 'engagement awe' at a brand's new 48 sheet - but it doesn't mean they haven't seen it, and that you haven't made an impression that could influence purchase.

Not all digital outcomes are measurable, you can't claim an X% increase or decrease in our beloved ROI. Let's be honest, they're often indicative at best. To cut off another communication channel (another connection with your customers) just feels wrong. Especially after you've come in under your target CPA to acquire that contact. If you've got an excuse to communicate with someone, someone who's said 'YES!' then you should use it... That is, until they actively say 'NO!'

over 5 years ago

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i love it

love it

over 5 years ago

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