When less equals More

Jan 01, 2008 10:30 PM  By

At some point, every marketer has asked this question: “If I send more e-mail, can I expect a greater return?” Conceptually, more e-mail means more eyeballs, more customers clicking links, more hits on your Website and, hopefully, more sales. But in the case of e-mail, more can actually be less — much less — return on your investment.

The three deadly sins of e-mail marketing vs. traditional direct marketing should give a marketer pause when contemplating how much is too much mail. These are: 1) Spam complaints, 2) Mailing bad addresses, and 3) Unsubscribes. The first two can cripple ROI statistics by causing poor deliverability; the third reduces the number of potential customers that see your offers.

As a responsible marketer, you can take steps to avoid these deadly sins. Collectively, these measures are facets of e-mail best practices and can be thought of as an approach to knowing your customers better. Here are some measures you can take to avoid the sins, and some practical tips for learning just how much e-mail is really too much.

What are the origins and implications of the deadly sins? As you continue to happily e-mail your entire opt-in file, daily, weekly or monthly, consider the following sobering findings from Jupiter Research’s Consumer Insight Study 2006 and the ESPC’s 2007 consumer survey:

  • 56% will unsubscribe from e-mails based on non-compelling content
  • 40% will unsubscribe from e-mails if they feel you are mailing them too often
  • 20% will report e-mail as spam to their Internet service provider (ISP) instead of using the unsubscribe functionality you provide
  • 79% will report e-mail as spam to their ISP if they don’t recognize the sender

Spam complaints. Recipients often forget ever having signed up for your newsletters and promotional offers. Combine this with consumers’ mistrust of the unsubscribe options and use of the report-as-spam button instead, and you can quickly see how spam complaints can add up. Unfortunately, even tiny spam complaint rates can have a deadly impact on your deliverability.

AOL’s complaint threshold is 1%. This means that if you send 100,000 e-mails to AOL subscribers and as few as 1,000 click the ‘“report spam” button, AOL may block the remaining 99,000 e-mails — not to mention your future campaigns.

This can represent a substantial loss of brand visibility as well as a dire drop in sales. ISPs protect their subscriber base first and foremost; retaining good mailing habits that minimize spam complaints is a critical step in preserving a viable dialog with your — and the ISP’s — mutual customers.

Bad addresses (unknown users). This silent but deadly group can cause your reputation undue harm. With over 30% of consumers changing e-mail addresses each year, bad addresses will always be an issue. But sending e-mail to new, unconfirmed addresses, continuing to mail inactive users and failing to remove bad-address bounces will all compound the problem.

Most top-tier ISPs such as AOL, Comcast, and USA.net monitor the number of bad addresses mailed by a sending IP, and use this key metric in assessing your reputation. Their theory is that responsible mailers remove unknown users from the list and avoid mailing old and uncertain lists — while spammers do not. Bad list hygiene and poor mailing practices will increase unknown user rates as well as the probability that all your e-mails will be blocked by the ISPs.

Inactive subscribers. Every list has inactives — those who do not open, click, or transact. Continually mailing this population can seriously harm your IP reputation and be the difference between a successful campaign — or a blockage or the spam folder.

This group is the most likely to represent the triple whammy of deadly sins with higher unsubscribe rates, higher bad-address rates, and higher spam complaint rates. The repercussions of mailing inactive subscribers can far exceed the incremental income they can provide.

How can I determine how much is too much? Let’s take a closer look at each of the e-mail sins to determine if there are harbingers warning when the sin is truly deadly and, more important, how we can avoid them.

Trending the deadly sins and building your company’s risk profile. Data is the key to e-mailing smarter, not more. E-mail marketing metrics can be overwhelming — but clear trends appear with a simple but effective method for examining important data points.

Here’s one tracking method. From your last campaign, gather your unsubscribe rates, spam complaint rates (obtained via ISP feedback loops), and bad address rates (garnered from your deployment system), and break these out based the age of the customer (“age” being when you acquired or began e-mailing them).

Create a spreadsheet with the segment age going across the top. Break the age down into segments of zero to three months, four to six months, seven to nine months, 10 to 12 months, and more than 12 months.

Once you have completed the spreadsheet, graph this data as illustrated in the chart below. This will give you a visual representation of your risk profile and will clearly illustrate problem areas that require exploration and action.

Investigating the root causes behind your risk profile. Why are they unsubscribing? People will unsubscribe no matter how good the offer or clever the creative. Names in the zero to three month range typically have a lower unsubscribe rate than names in the four to six or seven to nine month ranges. Based on the blue line in the chart, you can see that this middle age group is actively unsubscribing. This may be because they have acquired the product or service they need and may no longer be as engaged with your messages as they were in their information gathering stages.

As customers in the continuum age and transform from recent to older clients, it can be inferred that you’ve built a positive rapport, loyalty and a high lifetime value with those customers. But the difference in terms of unsubscribes/complaints/bad addresses between segments should prompt responsible marketers to ask pointed questions to shed light on why and how these differences occur:

  • Is it the way that names have been acquired?
  • Are communications being tailored to fit the age of the segment?
  • Am I reviewing unsubscribes/complaints/bad addresses by age of name in my database to isolate how I’m impacting segments through my messaging strategy?

Why are they complaining? Permission levels. The first and most obvious reason customers may report your e-mails as spam to their ISPs is that they didn’t actually give you explicit permission to e-mail — or forgot they did. At this point, it may be time to revisit your definition vs. your customers’ definition of explicit permission.

Questionable identity. A second important reason is that your customer may not recognize that the e-mail is from you. Vanity from-addresses, non-descriptive subject lines, and image-blocking all work to your disadvantage.

Today it’s just as important to sell the content of the e-mail as it is to ensure your company brand is clearly recognizable. Do so by ensuring your company is identifiable in either the from line or subject line of the e-mail, and that your content does not require images-on to convey your brand and key calls to action.

Report spam buttons. Unfortunately, regardless of how well crafted your message or universal your brand, someone will complain. To understand why complaints may occur even when you follow a clear opt-in acquisition strategy, it’s necessary to understand the report-as-spam button.

Abuses of non-functioning e-mail unsubscribe mechanisms prompted consumer distrust of mailers’ unsubscribe options. ISPs, forced to come up with a tool that would allow recipients to help them identify illegitimate mailers and prevent further messaging abuses, introduced the report-as-spam button. These are now a highly visible and easy-to-use feature in most major e-mail readers. Consumers use it not only to report real or suspected spam, but also as an alternative to the unsubscribe option provided by the mailer.

While it is impossible to avoid spam complaints alltogether, feedback loops offered by many ISPs give mailers the ability to quickly remove users from their active list and prevent subsequent complaints. But if an ISP or domain offers a feedback loop — and you haven’t signed up for it — then complaints will continue to mount and so, too, will the probability that the ISP will revoke your right to mail any customer at their domain

How old is too old? Some ISPs will say any address that hasn’t responded in six months should never be mailed again. The only way to answer this question is to grab hold of your monitor and peer deep into the soul of your database.

As complaints and unsubscribes taper off, the specter of bad addresses replaces them. In the oldest segments we see an increase in bad addresses as people change e-mail addresses/jobs/ISPs and so on.

Old segments pose the greatest threat of being blocked because they’re most likely to have the highest numbers of complaints and bad addresses; combined volumes of both are a clear and present danger to an ISP striving to protect its users (your customers) from phishers and spammers. Such as ISP is likely to block a mailer who is not proactive in removing complaints and bad addresses.

Once you have established which segments are generating more complaints and bounces than opens and clicks, you should ascertain where these e-mail addresses originated. Can you account for the source or method of acquisition? If not, you may consider putting them back where you found them.

How old is too old, you might ask again? Too old is anything that you can’t account for in terms of its provenance — and those generating higher numbers of bounces and complaints when compared to your most active and recent segments.

How can I send less e-mail and still meet my business goals? If the idea behind more equals less is rooted in the nature and mode of your communication with your clients, there are definite paths to achieving greater ROI. Here are three:

Change how you’re acquiring customers

The goals of those involved in acquisition are often at odds with today’s e-mail reality. When success is measured on the number of new registrants and cost per registrant, marketers often rely on tactics that pose substantial risks to the health and well being of core customer communications. This is because they are likely to be adding names that have no real interest in receiving your ongoing e-mails.

Again, more is not better! One such tactic is incentive-based — the heavy use of promotions and sweepstakes to quickly and inexpensively acquire new names for your database. Folks sign up for the sweepstakes and then immediately unsubscribe or, worse yet, complain tht you are spamming them. Remember, at ISPs such as AOL if a tiny fraction of your customers complain you are spamming them, you risk having all your mail blocked (yes — that means all mail — including the mail to your active and engaged customers!).

Another tactic is what we call the “hidden-agenda method.” You may make a compelling benefit such as access to key information on your Website contingent, upon the person providing you their e-mail address.

In many cases, the customer may want access to your site, but has no interest in ongoing e-mails — so to accomplish this, he or she provides a fake address. As a result, your bad-address rate spikes for newly acquired names, and you once again risk having all mail blocked.

E-mail appends, unqualified co-registration programs, the list goes on — but the risks to your good mailing reputation cannot be ignored and should be measured. Only then can the potential impact be quantified and fully understood. Today, clarity is king. More names is definitively not better, and you should always provide a clear, unencumbered, and conspicuous opt-in to your ongoing e-mail communications.

  • Change what you’re sending your customers

    Not every customer should get the exact same thing. This becomes even more true over the course of their relationship with you. Your customers are unique individuals; providing relevant and personalized content will inspire and motivate them to visit your site and hopefully purchase your products and services.

    Leverage the power of e-mail! Affordable e-mail technology allows you to provide a truly one-to-one message based on three main data sources: who they are (age, gender, geographic location, job type etc.), what they want (stated preferences at e-mail capture) and what they do (interests you ascertain by tracking what they click on — including e-mail and Web).

    But too little consideration is given to the fact that your customers’ interests evolve over time. The end result is that your customers, bored with your content and annoyed by the frequency of your mailings, will unsubscribe or report your e-mail as spam. Therefore, it is critical that you do not forget to revisit your segmentation strategy continuously over the course of the customer lifecycle.

  • Fine tune the frequency of your communications

    Not every customer needs — or wants — to get an e-mail every single time you send one out. Mail smarter and to the right people. As we’ve discussed, there’s an inherent danger in sending too much mail. Do not overestimate your customers’ appetite for your e-mails — you don’t want to burn out the new subscribers and you don’t want to anger older ones who may have forgotten how or why they wound up on your list.

  • Sending friendly and gentle reminders requesting profile updates, and those such as “We haven’t heard from you in a while, would you like to remain on our list?” are excellent tactics and provide a personal touch.

    Another practical approach: Do not mail everyone at the same time. Send your most active names first and allow those to deliver. Then create a separate and relevant e-mail to your least active names and send that at least a full day after you’ve delivered your bread and butter. This may also have an added benefit of smoothing Web traffic and fulfillment.

    And last but not least, remember: Although every name on your list represents incremental revenue, those names just as easily represent exponentially greater amounts of lost revenue because they can impact the delivery of your entire campaign. This is why less is truly more when it comes to e-mail marketing.

    Michelle Eichner is chief operating officer/vice president of client development and Len Shneyder is director of partner relations and industry communications for Pivotal Veracity, an e-mail deliverability service provider.

    Between a rock and a hard place

    A client e-mails all opt-in names weekly (excluding those who have unsubscribed, bounced, or generated a spam complaint). In late 2006, Comcast blocked its IPs, preventing the client from being able to deliver any e-mail to Comcast. We contacted Comcast to ask why the client’s e-mails were being blocked, and learned Comcast’s filter (Brightmail) reported X% of this client’s mail as spam. Based on a request from us, Comcast removed the block and the client continued mailing without changing its practices.

    Business continued as usual, but so did the specter of less equals more. The client mailed its entire house file again and triggered Comcast’s filters again. We again had the block lifted. But this quickly became less than ideal for the mailer, Pivotal Veracity, and Comcast; something had to be done.

    The mailer’s first tactic was to e-mail only subscribers with any post-signup activity, such as clicks or purchases, regardless of how long ago. Unfortunately, this also resulted in Comcast blocking the mail as in previous campaigns. The implication: Just because someone was engaged at one time does not mean they are still engaged and, as many folks do, they used the report-as-spam button to get off the list.

    Rather desperate now, the mailer decided to test e-mailing only to Comcast addresses that had made a purchase; a dramatic measure but one with dramatic results. Since employing a Comcast mail strategy that includes buyers only, this client has received consistent 100% inbox delivery.

    Older, inactive users were complaining, which caused the entire e-mail to be blocked by Comcast. Although the inactive names as a segment were producing incremental revenue as a small fraction purchased, the effect of sending e-mails to these users actually resulted in a net loss of revenue because it affected the ability to mail any e-mails to Comcast.

    By taking proactive measures, the client has been able to successfully deliver to the inbox across all subsequent campaigns.