How an optimized email list leads to more efficient brand growth
Are you obsessed with your customer list? Most DTC brand owners we’ve talked to are.
Once your hard work has paid off and you’ve won a new customer or added a prospect to your list, keeping them is crucial. Converting the prospects and driving higher sales from the existing customers on this list can make the difference for your brand.
Which brings us back to the first point: obsessive list management. The first-party data that you’ve gathered (specifically, your customer list) enables the most effective and affordable communication pathway to your customers & prospects: email marketing. With a $45 return for every dollar spent, it’s a no-brainer.
But it’s easy to lose a contact from this list due to over-emailing. Because of the relatively low cost of the marketing channel, over-emailing can happen easily. Not only does this lead to unsubscribes, but also poor deliverability, ineffective targeting and missed opportunities.
The good news: avoiding this is almost totally within your control.
Improves deliverability
To state the obvious, your email marketing strategy isn’t worth much if your emails aren’t landing in the inbox. To navigate the complexities of this, we’ve all had to become experts in the ever-changing algorithms behind the mechanics of a successful email program.
All of the major email providers consider engagement metrics (click rate, click through rate) as a key factor in delivering emails to a user's primary inbox. According to Klaviyo, the number one key to getting in the inbox is to “identify your engaged customers and keep your list clean.” This is so your domain doesn’t get flagged as spam and also to grow a strong sender reputation by removing contacts that will lower your engagement metrics.
Having a clean email list - free not only of unengaged contacts , but also junk and spam accounts - can immediately increase click rate and click through rate, without any other changes to your program.
But weeding through contact lists to understand and then suppress inactive accounts isn’t the best use of your limited resources or talent, when you could be focusing on content and strategy. Outsourcing email/SMS list optimization requires next to no time, and can be the biggest single factor that impacts your retention strategy in 2023.
Data-driven frequency and timing
There are three main questions brands ask about timing:
How often should we send emails?
At what time during the purchase cycle is it most effective to send a marketing email?
After how long should we remove an unengaged contact from our list?
The two main approaches to answering these questions have been 1) to rely on industry-standard rules and 2) undertake A/B testing. Both approaches require a lot of manual work, can lead to subpar deliverability, and can lead to overspending…all while losing out on revenue.
Combine different purchase cycles and different shopping habits with different email marketing styles and strategies, and the possible answers to these three questions are infinite. Yes, there are certain obvious trends across categories. A mattress brand will want to keep customers on the list a lot longer than a beverage brand, for example. But how much longer? Even in the same category, every brand is different.
The only way to answer these questions is by looking at enough of the right kind of data for your individual brand. Then, putting it into practice effectively requires constant monitoring and updating. Since each customer will be ripe for an email at a different time, it would take nearly all of your time to suppress and re-activate each customer when the time is right.
So what’s the solution? With machine-learning technology, it’s possible to suppress/activate contacts when the time is right for them to receive an email. Dynamically rebalancing the pool of active contacts based on purchase cycle, seasonality and brand lifecycle is the best way to make sure timing is spot on. This means you’re not paying to email contacts when they’re not ready to buy, and you’re not missing anyone who may have been inactive for a long period of time but is just about to re-enter the market.
Getting this right not only increases the revenue driven by your email marketing, but it also reduces unsubscribes - keeping customers around for the long haul.
More effective marketing segments
Duplicate, spam and bot accounts might make up a relatively small number of contacts on your customer list (3-10% ish), but they can still create a lot of fuzziness when it comes to creating effective marketing segments. For example, collapsing purchase history for duplicate accounts under the same master profile might put hundreds or thousands of contacts into a completely different marketing segment.
Where you will see the most impact, though, is by removing inactive contacts when creating with your targeting strategy. Anywhere from 30-80% of your contacts are unlikely to engage with your marketing emails, and considering their purchase history in your segments can lead your team in the wrong direction. Including these contacts in your A/B testing also leads to an inaccurate picture of how creative & copy are performing and can result in doubling down on the wrong decision. When you know a customer is close to reaching the churn threshold, it might make sense to start a winback flow… but if they’ve already crossed that threshold, it would simply be a waste of budget.
Short and long term growth
An optimized email list has many short term benefits: reduced costs, improved deliverability, better segmentation. It also can have a significant impact on your brands’ long-term growth. Nurturing those customer relationships leads to increased lifetime value and customer retention, two of the keys to a sustainable future. While optimizing your email marketing list may seem like a simple task, getting it right can have a major impact on your brands’ growth.
