Saying Goodbye to Increase Your ROI

Posted by Capri Kera on

Adios! Ciao! Bon Voyage! Arrivederci! Goodbye!

No matter how you say it–saying goodbye is not an easy feat. Depending on the circumstance, many individuals and companies find it difficult to even think of ending a once meaningful or profitable relationship.

But what if it didn’t have to be that way? What if saying “goodbye” could bring your company fulfillment? What if it were possible to nix a dormant relationship in the bud while simultaneously increasing your ROI?

It is no secret that as email marketers we spend a lot of time and money perfecting the science of growing our email lists. We take great pride in pressing the “send” button after spending countless hours crafting content rich emails we are confident will resonate with our subscribers.

We must remember, for any relationship, there are fundamental items, such as communication and engagement, which are necessary for success. While there are obviously many aspects that go into successful relationships, let’s focus on these two for the purpose of understanding how they are each unique, yet nearly synonymous, in our understanding of company-to-client email analytics. 

Imagine This
Let’s introduce Rick, Lillian, and Tammy — Rick an e-mail marketing manager for ABC Diapers, Lillian, a once loyal customer, and Tammy, a new customer to ABC Diapers. The relationship between Rick and Lillian started nearly six years ago due to the birth of her last child, while Rick and Tammy’s relationship has just started.

Let’s assume Lillian’s child no longer wears diapers: How often do you think Lillian reads Rick’s new content rich emails? Let’s also assume that Lillian (with a family, house, job, and other responsibilities) doesn’t make time to open or unsubscribe to Rick’s emails.

With this in mind, let’s look at some statistics regarding email unsubscribe rates among customers in the US. According to a study by Leadpages, when a subscriber is no longer engaged with a company’s emails, it is not always the case that she unsubscribes: 

If only 39.7 percent of disengaged subscribers take the time to unsubscribe while three percent update their preferences to receive less email, then a staggering 59.3 percent of disengaged subscribers are behaving in a way which will impede deliverability to your engaged subscribers.

Knowing this, how do you think Rick in our example is impacting his deliverability by mailing to Lillian, a once loyal client? Despite Rick’s best intentions, keeping Lillian in his mailing list will prevent Rick from emailing Tammy. No matter how much time and effort Rick spends perfecting his email content, if he’s not able to deliver to his engaged customers then his efforts are for nil.

While hypothetical, this scenario provides an example of one of many products and services that may have limited phases with certain customers, as well as illustrate how inaction on either side of the relationship can compromise the success of the entire email program.

Hanging On Can Hurt
Due to the filtering methodologies of major mailbox providers such as Gmail and Microsoft, the more subscribers negatively engage or do not engage at all, the greater the emphasis is placed on the algorithms to send your mail to the spam folder, or if the behavior is egregious enough, to outright block your campaigns at the gateway—no matter if you are sending to an engaged subscriber or not.

Unfortunately, in our example, Rick is sending emails to both Lillian and Tammy, and while his intention is to attract both to his campaign, he will actually end up sacrificing deliverability to both Lillian and Tammy. Unless Tammy was to check her spam folder–she would have missed the content she wanted to see and Rick’s budget would have dwindled with no ROI.

If you’ve done everything you can by lessening the frequency of sends as well as deploying re-engagement campaigns to no avail, it may be time to say goodbye to increase your ROI.

Things To Consider
When reviewing actual vs potential revenue based on the value per subscriber of your campaign, consider these four items:

  1. Average Inbox Placement
  2. List Size
    • Active vs. Inactive File
  3. Engagement metric 1 (think click or open)
  4. Conversion (percentage of subscribers who converted from engagement metric 1)

The ROI model below serves as a template to understand our potential revenue based on folder placement, list size, and engagement metrics in comparison to actual revenue. From this template, we can derive the data needed to determine the ROI of keeping vs. saying goodbye to an inactive subscriber.

 

At Return Path, our email optimization suite and combined years of experience guide companies around the globe by mapping the success of email campaigns and developing strategies that answer tough questions. Don’t feel alone—many of the world’s best senders struggle with this exact thought.

One Final Thought
In a world ruled by time, we have to understand the value of relationships. Because time is a limited resource, many people find themselves pulled between a variety of different choices whether they be physical or, in our case, digital. We can easily think of a variety of competing digital interests that one may choose from day to day– Netflix, TV, cell phones, etc. The difference between a company who can overcome these competing interests and one who cannot, is a company who understands relationships—when they are healthy and when they are not. This type of company will prevail in the ability to create new, strong relationships by possessing the courage to say goodbye to old, dormant relationships.

Whatever you decide, don’t let saying goodbye scare you. Weigh the metrics and begin with a test. You might be surprised at the growth you find.


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About Capri Kera

Capri Kera stands as a Technical Account Manager in Return Path's Denver, Colorado office where she advises leaders in a variety of industries such as entertainment, travel, retail, automotive, insurance, and tech. Capri consults with brands regarding email optimization strategies to increase deliverability and revenue. With a degree in public relations, a background in growing tech startups and a passion for the IT industry, Capri brings her experience to Return Path to communicate the power of analytics by examining, inspecting and creating curriculum on the trends of email deliverability as it relates to trending best practices. Capri enjoys spending time with her two bulldogs, Franklin & Gus, traveling, and painting. Connect with her on LinkedIn.

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