How to Engage New Email Subscribers for Higher Lifetime Value

How do you establish a rapport with somebody you don’t know? This is the challenge marketers face when onboarding new subscribers. Below, we examine a few common issues and approaches. We also identify the limitations of these approaches and offer alternative methods for engaging new subscribers in such a way that you build lifetime value.

How Frequently Should You Send Emails?

Should you send more or fewer emails to new subscribers? A higher volume means a higher potential for engagement and revenue, but also risks irritating and losing subscribers. While they weren’t looking at new subscribers specifically, Mailchimp has a bit of insight into this issue.

After using some clever math to analyze their data, Mailchimp came to the conclusion that more is not better. In fact, “frequency and engagement are negatively correlated”. Moreover, there is an optimal frequency that will maximize engagement before you drop off into the realm of unsubscribes and lost customers. Still, the same frequency may not be optimal for all subscribers.

Many marketers advocate using methods like RFM (recency-frequency-monetary) to determine frequency. By breaking down customers into groups based on their recency, frequency and monetary value, you can get a better idea of the appropriate frequency for each: customers who are more engaged will tolerate more emails in a shorter time period than those who are less engaged. However, while RFM may be helpful to determine frequency, it doesn’t work very well for new subscribers for whom you have little data, nor does it help you figure out which products you should put in front of those subscribers.

What Should You Highlight or Promote?

Retailers often begin onboarding new subscribers with a welcome email of some sort that emphasizes the value of the email program. After this initial welcome email is where things get trickier. Which products should you promote to new subscribers in such a way that you align your offers with their preferences in order to maximize value for both parties?

Often, the answer to this question is informed by techniques like gender-based targeting or seasonal promotions. For instance, male subscribers might receive an email promoting men’s t-shirts for 20% off during the summer months. However, there are limits and assumptions to these methods:

  1. They use broad categories that overlook a lot of variance within those categories–men overall will buy men’s wear but certain men will like certain items while others won’t.
  2. Your competitors are likely using these methods as well; therefore, your emails aren’t going to be very distinct from all the others in the subscriber’s inbox.
  3. Its goals are short-sighted and may not further your long term objectives.

Points one and two are pretty straightforward. But the third point could use some explaining: if you’re simply sending emails based on what you think is your best bet to get the conversion, you may indeed get more engagement and conversions in the short term than you would otherwise. However, you may be doing so at the expense of nurturing higher value, more loyal customers since those uninterested in the offers are likely to disengage.

Building Rapport Through Customer Journey Optimization

A customer journey can be thought of as a person’s trajectory through a transactional space. The ability to plot that trajectory allows you to identify which products intersect with it at various points in time. In other words, you can determine which products a customer will like and when.

Understanding the customer journey in this way enables you to put the right products in front of the customer at the right time, and in the right sequence so as to engender loyalty and build lifetime value while driving near term engagement and revenue. For example, by guiding customers along a sequence of products that will resonate, you can introduce them to products they like but didn’t know that you carried.

By doing so, you will unlock revenue that would otherwise have likely remained dormant. Moreover, customers will come to have a deeper appreciation for your brand since they will think of you as not only selling and an widget X, but widgets Y and Z as well.

At Coherent Path, we use our clients’ data — including transactional, web, social and email data — to build a map of the transactional space and plot customer journeys through these spaces in order to affect the aforementioned outcomes. At this point, you may be asking how we are able to predict the customer journeys of new subscribers or customers for whom there is little data.

One way to get around this challenge is to compare new subscribers to older customers (for whom you have data) that are similar to the new subscribers in some way–they bought or clicked on the same products, for instance–and use the latter group’s journeys as a model for the former. These models can then be used to inform the next few steps of interaction with the new subscribers. As data on the new subscribers accrues, their actual customer journeys can be then be predicted and optimized.

The Takeaway

New subscribers represent lucrative opportunities given their potential lifetime value. While conventional approaches to onboarding are useful, they have their limitations:

  • They overlook variation at the level of the individual
  • They don’t do well to distinguish your emails from those of your competitors
  • They focus on short-term engagement rather than lifetime value

In contrast, optimizing the customer journey allows you to treat new subscribers as individuals and engage them in a meaningful way. In turn, this helps not only improve near term engagement and revenue but inspire loyalty and build lifetime value.

Download: A Closer Look at the Science Behind Coherent Path