Increase Profitability and

Deliverability Within Your

Inactive Customers

Eric Kirby CEO ekirby@connectionengine.com Twitter: @ConnectionEng

Hayley Osher Director, Member Engagement hayley@hautelook.com

Inactive Subscribers – Why care?

• Often 50%+ of a subscriber file

• Not mailing causes issues

– Potential revenue impact

– Lost future contact opportunity

• Mailing causes issues. Pressure to suppress:

– Deliverability concerns

– Customer satisfaction

– Desire to reduce marketing waste

Why Inactive?

Not “in market”

Passive unsub

Delivery issues

Seldom used account

What are your options?

• Attempt to reactivate (Messaging, Offers)

• Reduce mail cadence

• Suppress

• How will you decide who to suppress?

– Who has the potential to become a valuable customer?

– Who is likely to be worth little no matter how many times mail?

What if you knew the future value

potential among the inactives?

How?

• Determine “Value Potential” for each subscriber by

leveraging external data and analytics.

• Process:

– Quantify attributes of Best Customers.

– Develop a mathematical model to predict customer value.

• Based on how much subscriber “looks like” a Best Customer.

– Use model to segment subscribers by Value Potential.

• Fast and cost effective through SaaS application

Case Study

• Leading flash sales site. Acquired by Nordstrom.

• Sale events each day featuring best names in fashion,

beauty, kids, and home.

• Large and rapidly growing member base.

Segmentation Strategy

• Sophisticated approach to segment users by observed

purchase behavior and email engagement.

– 38 defined member lifecycle segments defined by time on file,

engagement, and purchase activity.

• Aggressively suppress inactives to minimize

deliverability issues.

• How to differentiate among inactives?

– By definition, little available data to segment

Step 1: Profile High Value Customers

• High Value Members have distinctive attributes

compared to Members who have never purchased.

• Examples:

Connection Engine Attribute

High Value vs.

Non Buyer

Home Value 2.0 x

Online Purchase Activity 2.8 x

High Fashion Apparel Buyer 3.5 x

"Young & Hip" Lifestyle 2.6 x

Amex Cardholder 3.3 x

Step 2: Segment by ―Value Potential‖

• Using external data attributes, mathematical models are

used to predict individual member “Value Potential”.

Value Potential

Segment % of Members Relative Value

1 - Highest 10% 16 x

2 20% 8 x

3 20% 4 x

4 20% 2 x

5 - Lowest 30% 1 x

Step 3: Programs by Segment

• New members segmented daily.

• Can identify new subscribers who have the potential to

be high value from the moment they subscribe.

– Enables tailored communication / offer strategy

• Inactive members: reactivation campaign implemented

and measured by Value Potential segment.

Source 1 2 3 4 5

A 12% 16% 35% 31% 7%

B 6% 27% 29% 26% 12%

C 3% 13% 17% 33% 35%

Value Potential Segment

Reactivation by Value Segment

Relative Performance by Segment

1 1 1 1

1.82.2

3.1

4.4

Open Rate Login Rate AOV Order Rate

Low Segment High Segment

One Month after Reactivation Message

Revenue per Member 14x for High Segment

• Revenue per Member

14x higher in High

segment vs. Low.

• High Segment members

were 60% less likely to

redeem coupon when

purchasing vs. Low!

• High Segment inactives

represent ideal long term

customers to re-engage.

1

14

Revenue per Member

Low Segment High Segment

Conclusions

• High Value Potential segment members represent best

of the inactive universe.

– Investments to reengage this segment

– Worth keeping on file even after long periods of engagement

• Low Potential inactives represent lowest value members.

– Unlikely to ever become valuable customers

– Safest universe to suppress

• Value Potential segmentation provides a powerful tool to

determine who to keep on file, and who to suppress.

Eric Kirby CEO ekirby@connectionengine.com Twitter: @ConnectionEng

Hayley Osher Director, Member Engagement hayley@hautelook.com

Questions?

Spencer Kollas Director, Delivery Services, StrongMail Systems http://www.strongmail.com http://www.strongmail.com/resources/blogs/maximizing-deliverability/ http://www.deliverability.com Twitter: @spencerkollas

Travis Wingate Email Marketing Analyst, Workopolis http://www.workopolis.com

SQUEEZING BLOOD FROM A

STONE?

According to lead judge (for MarketingSherpa Email Awards 2012) Adam T. Sutton, Senior Reporter, MECLABS Primary Research, "Email marketers are constantly challenged to extract more value from their lists. Many turn to inactive or non-purchasing subscribers to boost conversions – but this can feel like squeezing blood from a stone.”*

*http://www.strongmail.com/resources/blogs/email-marketing-insights/2011/11/travelocity-win-back-campaign-wins-marketingsherpa-email-awards-2012

Case Study—Workopolis

• Background—Workopolis is the leading site in Canada who’s goal is to connect Seekers and Employers – We connect the right Seekers with the right Employers, across the country,

across a multitude of job categories

• Have two types of lists, B2C and B2B • B2B is where money is made by charging for job postings • B2C has no money associated with it but they need to keep users engaged

– Currently developing full life-cycle programs for both sides of business

– Don’t worry much about invalid account, focus on engagement with ISP’s

• Look at recent activity

Job Seeker (B2C) Model

• 4 key job seeker behaviors

– Visitor Career Alert Creation – Register – Upload a Resume – Apply

• Certain key behaviors leads to an email communicating the importance of “taking the next step” – Time relevancy = increased conversion

Visitor Career Alert

Join Now

Upload a

Resume

Apply Now

Modify Your

Resume

Lapsed Users

Win back Acquisition Growth

Convert Convert Convert

Targeting Workopolis’ Lapsed Users

• What is a lapsed user to Workopolis?

– A user who was actively using Workopolis • Have a resume uploaded to the site

– Based on last login date

• When do we plan to speak to these lapsed users?

– Secondary research suggests that job seeker start looking for a new job after approximately one year in their current role*

– Site behavior of the average job seeker

• What do we plan on saying to them?

– “Thinking of finding a new job?” – We want to “Warm them up” for a return to

Workopolis.com

Lapsed Users

Win back

*Source: Job Seeker Study, 2010

First Steps to Building a Re-

Engagement Program • Why is it important? • Setting proper expectations

– Make sure to communicate throughout your organization of your goals and success measurements

• Determine What an Inactive Customer Means to You – Leveraging the data you already have – Don’t try to go back too far

• Examine the Content You Are Sending Them • Don’t Send Win-Back Emails from the Same System as Your

“Master” List – Start slow – Monitor complaints and permanent bounces

24

Recommendations for Maximizing CTR from Openers

• Treat non-clicking openers as a separate segment – Use clicks among all openers to identify members – Include non-clickers and infrequent clickers (clicked on <25% of

all opened emails) as segments

• Test different approaches to both segments – Calls to action – Copy & Images

• Test resends on a limited basis to prevent burnout

Things to Remember

• Monitor your mailings closely

• Don’t try to do to much at first, start slowly and build

• Don’t try to over communicate

• It is ok to say Good-Bye