email engagement and deliverability study 2011

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Email Engagement & Deliverability Study Management, reengagement and re-permissioning of inactive subscribers by major retailers. By Chad White

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Learn everything you need to know about email marketing list management, including the reengagement and re-permissioning of inactive subscribers.

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Page 1: Email Engagement and Deliverability Study 2011

1Retail Email Guide / Holiday Guide 2011SWYN, FTAF and Community Links: November 2010 1

Email Engagement & Deliverability Study

Management, reengagement and re-permissioning of inactive subscribers by major retailers.

By Chad White

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Being an email subscriber is a temporary commitment. Interests and circumstances change; expectations may not be met over time; email addresses are changed; perhaps other channels become preferred. And while things change, subscribers often don’t bother to unsubscribe for various reasons, leaving marketers with inactive subscribers. What a marketer does next can have serious repercussions on their deliverability, in addition to depressing their email metrics.

To examine the state of inactivity management, we subscribed to the email programs of over 100 major retailers using fictional personas. We opened and clicked on the emails we received until one day we stopped—and let 40 months pass…

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At the end of that more than 3-year period, we found that the majority of retailers were still sending emails, many of them at exactly the same frequency that they mailed their active subscribers.

“ISPs are increasingly using engagement metrics to determine deliverability,” says Kevin Senne, Director of Deliverability & ISP Relations at Responsys. “This makes sense for the sender and the recipient. Senders should want to communicate with interested customers and vice versa.”

So continuing to email disinterested subscribers that don’t open or click puts brands’ sender reputations in serious jeopardy, as the mounting levels of inactivity lower engagement levels among subscribers, as well as increase the chances of an inactive address being converted into a spamtrap.

Continued mailing, no frequency reduction

Continued mailing at reduced frequency

Stopped mailing, no frequency reduction

Stopped mailing after reducing frequency

31%

23%14%

32%

Retailers react to inactives

How major retailers treat subscribers who have been inactive for 40+ months

“If over 50% of your distribution list has not clicked or opened a single email in one year, we’ve seen major ISPs filter all the incoming email, even that going to engaged subscribers,” says Heather Goff, Senior Deliverability Consultant at Responsys. “ISPs tolerate even less inactivity from high-volume senders with list sizes in excess of 1 million subscribers.”

According to Return Path research, only 81% of all permissioned email worldwide make it to the inbox, with the remainder either routed to junk or undelivered. Poor list hygiene and management of inactivity levels are big contributors to the reduced deliverability, which translates directly into lost revenue.

In order to consistently achieve high levels of inbox placement, marketers must develop a comprehensive plan to address inactives. This report will cover all the necessary steps to creating such a plan.

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Defining inactivityThe first step in developing a system for addressing inactives is to define what it is to be an “inactive subscriber.” It’s important to separate this definition from any existing definitions of inactive customers.

“Often clients have an internal definition of an ‘active customer’ and ‘inactive customer’ that have to do with website visits, purchase history, customer or account status,” says Goff. “While these definitions make perfect sense from a business standpoint, from a deliverability standpoint they have little bearing. ISPs need to see engagement with email specifically.”

Metrics

ISPs have gone on the record saying that they track user activity in two categories: positive engagement and negative engagement.

Recipient actions that contribute to the positive engagement quotient are:

— Clicking through links

— Adding to an address to their contacts or address book

— Enabling images

— Opening the message

— Scrolling through the message

Recipient actions that contribute to the negative engagement quotient are:

— Reporting as spam

— Deleting the message

— Moving the message to trash

— Marking messages as read

— Ignoring messages

While all of those are factors, the single best measurement of engagement for marketers to look at is clicks.

“From a deliverability perspective, clicks are the only fully accurate measure of activity for an email recipient because a click is a definitive action taken by the recipient,” says Goff. “Opens are secondarily helpful as an engagement metric, although there are potential inaccuracies with opens because of preview panes usage and image suppression.”

Duration of inactivity

ISPs each have their own tolerances for how long an address can go inactive, but in general any activity inside of 1.5 to 2 years is acceptable. This time frame allows for subscribers who are season shoppers—for instance, those that only purchase from a brand during the holiday season.

Of course, this recommendation should be tempered by the percentage of the marketer’s list that’s inactive and their sender reputation. If a large percentage of a list is inactive, the acceptable duration of inactivity decreases.

“I recommend breaking a distribution list into active and inactive segments and tracking conversion, revenue, complaints and spamtrap hits by segment,” says Goff. “That way marketers can learn what the risk segments are for their own mailable universe, as this varies.”

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Reengagement strategiesOnce a definition of inactivity is in place, the next step is to trigger changes in content or frequency—or both, as we would recommend—as part of a reengagement strategy. Ideally, changes should be initiated well before a subscriber meets the definition of inactive.

“Instead of waiting for recipients to become inactive,” says Goff, “it’s best to observe their lack of engagement as it develops and send them your best offer or highest performing campaigns and potentially at a lower frequency.”

It’s also wise not to wait too long before making these efforts, as the longer subscribers are inactive the more difficult it is to reengage them.

“In tests that we’ve done with clients, the vast majority of reactivated subscribers were inactive for less than 18 months,” says Jon Stanesby, Responsys’ Associate Director of Strategic Services, EMEA. “We’ve seen very few coming back after being inactive for more than 18 months.”

Reducing frequency

Decreasing the frequency at which inactive subscribers are mailed is a defensive tactic used to boost the level engagement seen by ISPs while continuing to give these subscribers opportunities to engage.

“This approach reduces the chances for inactive recipients to complain and improves the sender’s reputation at the ISPs,” says Goff, “because they’ll be sending to a more engaged audience most of the time while still keeping their less engaged audience warm.”

Case Study

Locating the Line on Engagement

After sustained filtering and sometimes blocking at some of the major ISPs, a large retailer set out to establish what level of engagement was required among their audience to maintain revenue goals and also avoid costly deliverability issues.

SolutionWe worked with the client to establish a “safe” mailable universe by using a testing methodology that allowed certain engagement types to be mailed on certain days as separate campaigns, allowing us to track and monitor engagement, conversion or revenue generation, bounces, complaints and spamtrap hits by segment type. Once we determined the more risky and less risky segments, the data guided us to the tipping point of deliverability issues vs. the “safe” mailable universe. It was imperative to apply this criteria to all email programs and not just the full file mailings as spamtraps and inactive email addresses can be mailed from triggered programs as well.

ResultThis retailer established that recipients that had opened or clicked in at least one email within the last 9 months could be safely emailed routinely. The more engaged then recipient the more frequently emails could be sent. The inbox deliverability rate went from low 80% to high 90% based on establishing a global business rule policy to the universe selection process.

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We found that the majority of retailers in our study reduced the frequency at which they mailed inactives at some point before the 40-month mark. On average, retailers reduced how often they mailed inactives by more than two-thirds compared to how often they mailed active subscribers.

69% Amount that email frequency is reduced among major retailers that reduce the frequency of mailings to inactives

16% Percentage of major retailers that send reengagement emails to inactives

55% Percentage of major retailers that eventually reduce the frequency of mailings to inactives

Content tactics

One of the reasons that subscribers become inactive is because what is being sent to them isn’t resonating, so changing up the content can be an effective component of a reengagement strategy. However, we found that only 16% of retailers tried to reengage inactive subscribers with different content.

Here are some content tactics that marketers can try to catch an inactive subscriber’s attention:

Most compelling emailsWhen marketers reduce the frequency of emails that they send to inactives, it gives them the opportunity to only send their top performing emails to that segment.

For instance, OfficeMax only sent their “Weekly Ad” emails to inactives, deciding that their best shot at re-engaging subscribers was to get them back into their stores. Costco Wholesale took the exact opposite approach, sending inactives just their online coupon offers. Buy.com reduced their frequency dramatically sending emails every month or two, allowing them to give inactives only their best deals such as their Cyber Monday offers.

Exclusive offerSending the richest, best performing offer is a tried-and-true reengagement tactic. For example, Nascar.com Superstore, Road Runner Sports and RedEnvelope.com sent 25% off offers, but they were sent at most a few times over several months and were interspersed with broadcast promotional offers.

While those retailers used a reengagement email only very occasionally, others like SmartBargains.com and Drugstore.com made them central to their appeal to inactives. For instance, SmartBargains sent nearly 40 reengagement emails over a 3-year period; and after about a year of inactivity, Drugstore.com subscribers only received a “20% off everything” reengagement offer repeatedly.

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Make sure that the offer used in a reengagement email is truly exceptional. If a brand offers 20%-off coupons all the time, that offer isn’t likely to be effective at reengaging inactives.

Different subject linesJust like apology emails have their set of subject line key words, the subject lines of reengagement emails often include key word phrases like “we miss you,” “come back” and “it’s been too long.”

Macy’s took a unique approach of sending the same email content to both active and inactive subscribers but using those key word phrases to create an alternative subject line for their inactive segment. Here are some sets of Macy’s subject lines sent to each segment:

In this reengagement

email, Spiegel positions

their generous 30% off

offer prominently along

with messaging that the

subscriber has been missed.

Subject line sent to active subscribers

Email exclusive: $25 off our favorite trend + Free Shipping!

Subject line sent to inactive subscribers

Come back and enjoy an extra 15% off + Free Shipping at our Home Sale!

Subject line sent to active subscribers

Women’s Fashion Clearance: Save 50-75% + Free Shipping!

Subject line sent to inactive subscribers

Shop with us again & save 50-75% + Ship for Free!

Subject line sent to active subscribers

Super Saturday: Limited-time deals for her + Free Shipping!

Subject line sent to inactive subscribers

It’s been too long! Get great weekend deals + Free Shipping.

Subject line sent to active subscribers

One Day Sale: Incredible deals, web busters & Free Shipping!

Subject line sent to inactive subscribers

We miss you! Save big at our One Day Sale + Ship for Free.

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Victoria’s Secret also used different subject lines for their inactive segment, but they also sent completely different content and actually sent their inactives more email than their active subscribers.

Email formatMany ISPs block images by default, diminishing the effectiveness of image-heavy emails, especially among inactives. Marketers can try to get their message across more clearly by using HTML text for the primary messaging of a reengagement email.

“Design the email with consideration for images being off by default,” suggests Goff. “The email should be highly valuable but also very simple and clear. Including more text that will show even if images are off by default is key.”

Preference updateIn addition to trying to get inactives to click on an offer, consider presenting them with an opportunity to update their preferences, either by including an “update your preferences” request in the preheader at the top of emails or as the primary call-to-action in a reengagement email.

Elevate the unsubscribe linkInactives are a danger to deliverability because of their low engagement as well as their higher propensity to hit the “report spam” button. Including a second “unsubscribe” link in the preheader at the top of emails to inactives reduces that danger by providing a more obvious way to opt out.

“ISPs do not penalize marketers for unsubscribes, but they do heavily penalize marketers for too many complaints,” says Goff. “So if there are recipients on your list that simply do not want to get promotional emails from you anymore, it’s best to allow them to easily unsubscribe vs. complain. We’ve conducted tests with several clients and the trending of unsubscribe rates slightly upward and complaint rates downward is stark and consistent after adding an additional unsubscribe option at the top of emails.”

But don’t let subscribers go inactive for too long before using this tactic, warns Senne. “The unsubscribe link is all about the trust you have built with the recipient,” he says. “Pushing up the unsubscribe link may be a benefit early in the messaging plan, but after months and months of inactivity, the user is more likely to report the message as spam. The passing of time with no interaction breaks down the trust of the recipient.”

Reengagement success

The goal of reengagement programs is to get inactive subscribers to open or click. It doesn’t matter if that click is on a link to buy a product or on a link to update their preferences, visit a Facebook page, or participate in a poll, so don’t shy away from using a variety of tactics to secure that click.

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Case Study

Deploying a Spectrum of Reengagement Tactics

This large retailer had nearly 2 million subscribers who had not opened or clicked in over a year and wanted to reactivate at least 10% of them.

SolutionWe worked with the client to develop a battery of 10 tests in three general areas:

1 / Subject lines (length, tone, branding, personalization, etc.)

2 / Timing (time of day, day of week, website peaks, etc.)

3 / Content (product vs. editorial, length, etc.)

Over four weeks, the tests were randomly run against a portion of the inactive list.

ResultThe approach successfully reactivated 16% of those included in the test. Those contacts that didn’t bounce, unsubscribe or complain would be put through the same process again to boost the reactivation rate even higher before finally being re-permissioned through a separate program. The findings also allowed the retailer to modify their regular campaign content strategy to attempt to address disengagement before it happens.

28 Average number months of inactivity before major retailers stop mailing subscribers

46% Percentage of major retailers that eventually stopped mailing inactive subscribers

Among those retailers that did stop mailing their chronically inactive subscribers, on average they ceased mailing them after 28 months of inactivity. That’s a bit outside of our recommended ceiling of 24 months of inactivity.

Re-permissioning

As a last-ditch attempt to save inactives from being removed, some marketers may find some peace of mind and nominal success by taking the intermediate step of sending a re-permission campaign. These emails ask a subscriber to confirm their continued interest in receiving emails by a certain date or else be removed from future mailings. Some marketers may also undertake these campaigns in order to remove blocks at an ISP.

Removing inactivesIf inactives don’t respond to reengagement efforts, eventually they should be removed from mailing lists because of the deliverability dangers. However, we found that fewer than half of major retailers stop mailing subscribers who have been inactive for 40 months—which is well into the danger zone.

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16% Percentage of major retailers that send re-permission emails to inactives before ceasing mailing them

“From a deliverability perspective, re-permission campaigns are needed when a sender is being heavily junk foldered (80%-90% or more) at any given ISP for an extended period of time (more than 1-2 weeks) and inactivity or spamtraps are the root cause of the junk foldering,” says Goff. “In order to identify the audience that should be sent a re-permission a full inventory of actives vs. inactives and business terms and time tables for each must be established.”

Among the retailers that we looked at, 16% sent re-permission emails before stopping mailing inactives. However, because re-permission campaigns are often only used in response to a block and therefore aren’t always a permanent triggered campaign, this figure may not be indicative of current usage.

“Ideally, marketers should have a triggered program in place that re-permissions recipients that have been inactive for a long time instead of waiting for a large accumulation of inactives,” says Goff. “The damage that a large segment of inactives can cause you from a filtering or blocking perspective is much greater than business opportunity these inactive recipients provide. We’ve seen that up to 90% of revenue is obtained from email recipients that have clicked and opened one of your emails within the last 4 months. The percentage of revenue contribution in the more inactive segments becomes progressively less significantly, eventually becoming negligible. Accepting this helps executives understand the long-term value of an automated re-permission program.”

Re-permission emails tend to contain a lot of HTML text to ensure that the message renders when images are blocked and generally have straightforward subject lines. For instance, the subject line of Home Depot’s re-permission email was “Please Confirm Your Subscription + $5 Off Your Next Order”; Spiegel’s “Is This Goodbye? Your Subscription is About to Expire”; and Office Depot’s “Important Information From Office Depot: Please Reconfirm Your Email Account Subscription.”

Even with images blocked, this

Office Depot re-permission

clearly delivers the the call-to-action.

Also, Office Depot keeps the

focus on that one call-to-action

by jettisoning their navigation bar,

sharing links, and administrative

links which might distract the

subscriber and muddle the response.

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Home Depot’s re-permission

email also renders well when

images are blocked and gives

subscribers both a positive and

negative response to choose from.

A series of emails tends to be most effective. Each email in the series should increase the sense of urgency and clearly articulate that the recipient will no longer receive promotional emails if no response is received.

“Whether a re-permission campaign is a single ‘sudden death’ email or a series of multiple emails, success is measured by any response—good and bad,” says Goff. “Keeping in mind that the subscribers targeted have already gone to sleep on your emails, getting 1 out of every 12 recipients to respond is a solid re-permission effort.”

Case Study

Re-permissioning to Remove Black Listing

This large retailer offered a rich incentive in exchange for email sign-ups, however there was no verification process to validate that the email addresses were accurate, current or even real. As a result, the first few emails sent to any new subscriber bounced at a rate of 40% to 60%. ISPs penalize marketers for sending to bad email addresses that bounce at a rate of 5% or more and so this was causing blocks by ISPs as well as the collection of inaccurate email addresses that could be spamtraps. The accumulation of spamtraps caused a black listing at a widely referenced black list and heavily impacted the reputation of not only the marketer but also the ESP and bandwidth provider sending emails on behalf of the retailer.

SolutionWe worked with the client to do an inventory of the database of responders vs. non-responders and quarantined the non-responder segment inside a designated time frame. A re-permission email was created to conduct a mass cleaning out of all bad email addresses and non-responders. Spamtraps do not click so any non-responders from the campaign should be removed and effectively cleaned off the list.

ResultThe bounce issue was brought back under control and the black listing was removed. Quickly the reputation of the mailer was re-established at the ISPs and inbox placement was once again in the high 90% range on a regular basis.

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Conclusion

Developing a programmatic approach to addressing inactives is critical to maintaining good list hygiene, preserving a solid sender reputation and ensuring high deliverability of emails. Start by coming up with a definition of an “inactive subscriber” that’s separate from any definitions of an “inactive customer.” Then create a reengagement strategy that uses changes in email frequency and content to keep subscribers from becoming inactive. And finally, establish rules for removing inactives from mailing lists and consider creating a triggered re-permission campaign to give wayward subscribers one last chance.

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About the author

Chad White is the Research Director at Responsys, a leading provider of email and cross-channel marketing solutions. The author of the Retail Email Blog and dozens of research reports, Chad is an authority on email marketing strategies and trends in the retail industry. In addition to working with Responsys clients, he is an Email Insider columnist for MediaPost and has been interviewed by the New York Times, USA Today and others.

About Responsys

Responsys is the leading provider of email and cross-channel marketing solutions that enable companies to engage in relationship marketing across the interactive channels customers are embracing today—email, mobile, social, display and the web. With Responsys solutions, marketers can create, execute, and automate highly dynamic campaigns and lifecycle marketing programs that are designed to grow revenue, increase marketing efficiency, and strengthen customer loyalty.

Responsys’ New School Marketing vision, flexible on-demand application suite, and customer success-focused services aim to deliver high ROI, increased levels of automation and fast time-to-value. Founded in 1998, Responsys is headquartered in San Bruno, California and has offices throughout the world. Responsys serves world-class brands such as: American Family Mutual Insurance Company, Avis Europe, Brooks Brothers, Continental Airlines, Deutsche Lufthansa, Dollar Thrifty, Lands’ End, LEGO, LinkedIn, Newegg, Orbitz, Qantas, Southwest Airlines, and UnitedHealthcare. For more information about Responsys, visit responsys.com.