What's Not Working?

  |  September 21, 2006   |  Comments

Have you fallen into the what-I-don't-know-won't-hurt-me syndrome?

When I was growing up in New York City in the early '60s, there was never any shortage of colorful characters on the political scene. None was more engaging than Mayor Ed Koch. Koch presided over a city in transition, with factions representing every niche in this very diverse city demanding his attention and support. No elected official had more on his or her plate (with the possible exception of Rudy Giuliani) to deal with.

A key part of the love affair the city had for this mayor was his unflappable demeanor and candor in dealing with the myriad crises that came his way. Never shy about being among his constituents, he had a signature way of greeting everyone. It was always the same. "How'm I doing?" he'd blurt out, as his way of saying hello and connecting with the people he served.

With Koch, the question was much more than a greeting. He wanted everyone to know he was truly interested and concerned with their judgment. He had the confidence to know there were many good things his administration had done, many successful programs to improve life. But he was more interested in work yet to be done. What was on the minds of his "customers"? How could he improve his service to them? He was always probing, always listening to those who may have been overlooked or taken advantage of.

Much has been written here and elsewhere about the incredible power of e-mail as a communications channel. There are numerous examples of strategies that leverage e-mail's power to acquire new customers; build stronger, more profitable relationships with existing customers; win back those who may have drifted away due to a lack of attention; or any number of problems. We cite chapter and verse case studies about open and click-through rates, sales conversions, and ROI (define) analysis. Many of us use advanced analytic packages to map individuals' progress from e-mail to Web site to understand where folks travel on the route to a transaction. And we pour thousands of dollars into reshaping our Web sites, call centers, and point-of-sale materials based on this data. A great deal of attention is paid to active customers in the database. Meetings are held to craft strategies that will drive even more incremental dollars from this active, loyal base of customers.

Take this simple test. Think of the size of your customer database; folks for whom you currently have e-mail addresses. Got the number? Great. Now, from that base of e-mail customers, think about what percentage of them could be deemed active.

Each company has its own parameters to determine customer activity: number of transactions; visits over the last 30, 60, 90 days, and so forth. We're almost done. If you're honest in these calculations, you'll probably come to an understanding relative to the number and percentage of overall customers in your database who are active versus those who are either significantly less active or, in many cases, not active at all.

Do you know what percentage and how many of the customers in your database have at least opened an e-mail message from you in the last six months?

Have you fallen into the what-I-don't-know-won't-hurt-me syndrome? Are you one of those folks who continue to avoid the Koch Question: how'm I doing? Are you satisfied with the fact that potentially 50 to 75 percent of your customer file isn't taking the actions that would make them better customers? One of those people who keeps telling the higher ups, "Things are great! E-commerce continues to grow exponentially each year."

The numbers are great and sales keep improving. Why rock the boat? Instead of dealing with the issue around the inactivity in the bulk of your customer file, you'd much rather spend boatloads of cash on acquisition strategies to regain customer transactions from folks who are already in your file. It's like turning up the car radio so you can't hear the problem with the muffler.

It's time to stop deluding yourself, and your company, that all is right with the world. Focus on addressing the problem. Those who directly address this challenge find the inactive customer problem can be hard work, but the dividends are huge. Five steps to address the problem:

  1. Understand the source of your customer data and adopt a clear set of metrics to determine customer activity. It's important to map customers with your data to build profiles for the future.

  2. Look at each campaign run in the last 30 days to assess the creative's and offer's performance. Which segments and individuals opened your message and took the desired action to consummate a transaction?

  3. Take an even closer look at customer segments, starting with your most active segment, and map whether there were openers and converters in this campaign. If a traditionally best-performing segment isn't responsive to current campaigns, you have a larger problem than you might think.

  4. Analyze your customer database for the most non-responsive members. Right now, they're taking up space in your database. It's time to develop a strategy to reengage these customers in some sort of dialogue if you want any chance of reviving this relationship.

  5. E-mail technology allows you to run real-time tests with subject lines and dynamic content to reengage inactive customers. If you don't take advantage of this capability, you'll doom these folks to the lost customer trash bin. And you'll throw away any opportunity of generating incremental revenue from this segment, which once either purchased or expressed interest in purchasing from your company.

E-mail communication provides direct marketers an incredible insight not available in other media, with the possible exception of face-to-face selling. Print and direct mail can provide marketers with useful information about audience segments that take action when materials are received. But, it can provide very little insight into those who receive and don't respond.

As a marketer, you can continue to view e-mail in the same fashion as direct mail or any other broadcast medium and in doing so minimize the channel's value. Or you can focus on the data's incredible insight into customers who aren't responding to your campaigns and your ability to chart strategies to reengage them. You can work to keep engagement at the highest levels.

Failure to address the inactive or non-optimal performing segment of your customer database signals to your competitors that your one-time customers are ripe for the picking.

Protect yourself and your revenue.

Al D.

Join us for E-Mail Marketing, the first in the new ClickZ Specifics conference series, October 24-25 in New York City.

Want more e-mail marketing information? ClickZ E-Mail Reference is an archive of all our e-mail columns, organized by topic.


Al DiGuido

Long recognized as one of the direct response industry's premier innovators and a pioneer in e-mail communications, Al DiGuido brings over 20 years of marketing, sales, management, and operations expertise to his role as CEO of full-service digital marketing company Zeta Interactive. Formerly Epsilon Interactive's CEO, DiGuido also served as CEO of Bigfoot Interactive, CEO of Expression Engines, EVP at Ziff Davis, and publisher of Computer Shopper, where he launched ComputerShopper.com, a groundbreaking direct-to-consumer e-commerce engine. Prior to Ziff Davis, he was VP/advertising director for Sports Inc. DiGuido also serves on the Direct Marketing Association's Ethics Policy Committee.

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