Recently, a reader tweeted a link to "
Have You Tackled Your List Churn?" -- an
Email Insider column I wrote in 2008. It was a pleasant surprise, but also a reminder that the general causes and cures for database churn have remained consistent the last six years.
However, the
inbox environment has changed in many ways since I wrote that column:
The rise of smartphones and tablets – Mobile readership is typically above 50% for brands, causing email
design and content challenges. But even more important is mobile context -- how and where consumers interact with your emails and Web sites.
Channel competition – Social, SMS,
mobile apps and push notifications are becoming growing alternatives or competition for attention, especially among younger consumers.
Increased sending frequency from most brands,
especially retailers – The average retailer sends four broadcast emails a week (many are sending five or six), up from about two per week in 2008.
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The Gmail Factor –
Today, Gmail addresses are often the largest percentage of a B2C marketer's database, up from probably second or third six years ago.
Growth of affordable marketing
automation/personalization technologies – The ability to deliver on the "1 to 1 marketing" dream is now within reach for nearly all marketers.
All of these factors affect list churn
in one way or another, either to aggravate it (increased frequency without relevance) or to ameliorate it (more relevant emails reducing inactivity or spam complaints).
Types of
Churn
Churn comes in two types:
Transparent churn: Unsubscribes, hard bounces and spam complaints. You can no longer email these people because of a subscriber's direct
or indirect action.
Opaque churn: Subscribers who have completely disengaged with your email program, including inactive readers who ignore your emails, leave them in a spam folder
or let your messages pile up at email accounts they rarely or no longer use.
While transparent churn rates can vary widely, typical annual rates are between 25% and 50%. Opaque churn
rates are probably between 10% and 25% annually for most brands, although I'm not aware of any solid industrywide research on this.
Causes of Email Churn
Email address
churn is a fact of life for marketers. Some address churn is primarily driven by the quality and effectiveness of your marketing program (controllable) and some by changes in a subscriber's life and
interests (uncontrollable):
Marketer-/Brand-Driven:
- Lack of relevance – Your content and offers have little to no interest or value for a subscriber.
- Purchase cycle/offerings – Your primary offerings are purchased infrequently.
- Poor acquisition efforts – Your customer acquisition efforts are working, but you
are bringing on many of the wrong type of prospects.
- Over-emailing – You aren't managing cadence expectations, and most of your messages lack relevance at an individual
level.
- Switching to a competitor – While it is clearly a subscriber's choice to prefer a competitor's email program, it's your job to wow and retain them.
- Usability – You make it difficult or impossible to change an email address or update preferences.
Subscriber-Driven:
- Interest and life
changes – When a subscriber's kids become teenagers, they no longer need the diapers, baby clothes or "Goodnight Moon" books that you sell.
- No longer a customer – Your
airline, mobile or cable customer switches to a competitor.
- Channel preference changes – Some customers prefer to hear about your promotions via Facebook or your mobile
app.
- Too much email overall – Nothing personal, but some consumers simply decide to pull back on their email subscriptions across the board.
- Death –
Nothing you can do about this one.
In a future column, I'll look at suggestions for managing and reducing churn. Until then, let me know what you're seeing in your own database and
whether you've taken steps to get churn under control.
Until next time, take it up a notch!