Email List Churn:

1 of the 7 C's of Effective Email Marketing!

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List Churn, 1 of the 7 C's of Effective Email List Management

For an email campaign to be truly effective, it will require the application of what I call "The Seven C's": Customer Knowledge, Consistency in the Marketing Theme and Message, Content that is Unique, Careful Campaign Execution, Communication with Customers on a Scheduled Regular Basis, Conversion with Tracking Tool and Churn Considerations. Of the seven it is List Churn that generally needs greater explanation.

List Churn is the amount of email addresses that will be obsolete within a year. According to McDonald (2008), the rule of thumb is 30%. Add to the List Churn another 1% per month of people that become inactive and the List Churn total for the year is 42%. Therefore, if the Internet marketing department set a goal of 30% for new list members, then to negate List Churn, the goal would need to be at least 72%.

To accomplish such a goal will require short and long-term planning. Ultimately, the best strategy would be adding viral marketing to the online marketing plan. Viral marketing is the online version of network marketing (Multi-Level Marketing). As with network marketing, it costs less to retain an existing customer than to acquire a new customer.

Some marketing firms believe that you spend six to seven times more to add a new customer than to keep one. This being the case, a customer has a lifeline and that lifeline has value.

To measure the value of a customer, many companies use a calculator like the Harvard Business School Toolkit – Lifetime Customer Value (LCV) Calculator. The purpose of the calculator is to estimate the cost of acquiring a customer and the Net Present Value (NPV) of that customer's business during his economic lifeline.

Knowing the value of existing customers is the foundation necessary to analyze strategies for acquiring new email addresses versus marketing to existing customers.

To retain existing customers, McDonald (2008) recommends adding company specific churn reduction strategies at all four stages of the email relationship. In the dating stage as an example, make the opt-in process easy. In the engagement stage, develop a multistage process as part of the welcome program. In the marriage stage, continuing to add value for the subscriber is the key.

In the final stage, which is called the divorce stage; strategies for retention such as changing their profile or reclassifying their interest can be effective. If this fails, then by law, they need an easy opt-out option button to escape from receiving further email. While you're at it, add a friend link as well.

 

SEO Article Reference

McDonald, L. (2008). Have You Tackled Your List Churn?

 

An Original SEO Article by Colter Brinkley, MS.

 

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Email List Management: List Churn!

Making an Email Campaign truly effective with List Churn.

December 11, 2010

The objective of Email Marketing is to drive people to the website. A visitor to the website does not know how big or small the company is. Thus, it is important that the website look very professional and have e-mail accounts with the website name. Unfortunately, this is just the beginning of truly effective Email List Management.