Using E-mail to Drive Renewals

The Direct Marketing Association’s annual ROI (define) figures are in and the winner is … (drumroll, please)

E-mail!

Yes, once again e-mail leads all other direct response channels in ROI. The DMA estimates that companies using e-mail marketing in 2008 generated an average $45.06 in revenue for each dollar they spent.

E-mail is a relationship medium, meaning it helps develop, build, and strengthen connections with customers and potential customers. It’s especially effective at eliciting response from current customers, which is where renewals come in.

Many companies rely on renewals or other ongoing revenue to be profitable. Working in the publishing world, I quickly learned it was OK to break even or even lose money on efforts to bring in new subscribers, because the revenue generated from subsequent renewals would, in most cases, more than make up the loss.

E-mail renewals are a form of transactional message; they relate to a previously agreed on business deal. As a result, they benefit from the halo effect we see around transactional messages. A 2007 survey done by MarketingSherpa, StrongMail, and Survey Sampling International found that 75 percent of respondents said they “very often/always” or “frequently” read transactional e-mail messages. Only 55 percent of the same group said they “very often/always” or “frequently” read other types of opt-in e-mail messages.

Renewal messages’ transactional nature generates more interest and engagement than a promotional e-mail sent to non-customers. This supports the idea that it’s less expensive to keep a current customer than it is to find a new one.

So how do you make the most of your e-mail renewal efforts? Here are a few tips.

Sender Address

The sender address is critical to getting your e-mail opened. Fifty-six percent of those surveyed cited “knowing and trusting the sender” as a reason to open an e-mail, according to a 2007 Return Path research project. On the flip side, a 2007 survey by The Email Sender and Provider Coalition found that 73 percent of respondents said they clicked the “report spam” button based on the sender address.

What makes a good sender address? It needs to be an accurate representation of your company and instantly recognizable to recipients. Since they’ve done business with you in the past, these standards should be easy to reach. If you send a lot of e-mail, you might also add “renewals” or another term after your brand, to differentiate this renewal e-mail from other e-mails you send.

Mergers, acquisitions, and other corporate activities that facilitate name and brand changes can make this guideline hard to follow. Still, you want to include the brand name that recipients know you by in the sender address. If you must include both the old and new brands, so be it. Assuming that people will recognize your new name is a risk, no matter how much money was spent on PR to “get the word out.”

Subject Line

The second most important factor in getting an open is the subject line. In 2006, 35 percent of those surveyed by JupiterResearch said they rely on the subject line to determine whether to open the e-mail. In the Email Sender and Provider Coalition’s 2007 from 2007, 69 percent said they clicked “report spam” based on the subject line.

Especially when it comes to renewal efforts, subject lines are both an art and a science. Mentioning the promotional offer without referencing the renewal fails to leverage the power of the existing relationship. But general subject lines like “Notification” or “Important Account Status” seem like junk mail, thanks to their lack of specific detail.

There seem to be two types of subject lines working for renewals today. The first includes three key elements:

• The brand name
• The term “expire,” “renew,” or some variation (“expiration,” “renewal,” etc.)
• A promotional offer (“save 50%”) or urgency (“expires in 1 week”)

The second type is a bit more abstract. The subject lines that have none of the previously listed elements. They rely on intrigue and, to a certain extent, emotion to generate an open and a response. “We want you back” is the most commonly used copy, although other variations exist. Why does this copy work rather than get mistaken for junk mail? I have no idea. But it’s worth testing; if it lifts response, it doesn’t matter why it works — you go with it.

Snippet/AutoPreview

I’ve written before about snippets and AutoPreview, but companies still aren’t optimizing it, especially in renewal e-mail. Check out the AutoPreview copy below. Do the extra lines help make the case for opening the e-mail?

Not really. Even when marketers seem to be paying attention to the copy that appears in the snippet or AutoPreview, they aren’t taking full advantage, as you can see in the next example.

Here the AutoPreview copy includes more than just a whitelist request or view-online message and link, which is good. But even here marketers aren’t using this prime real estate to make the case for opening the e-mail and taking action.

The McAfee folks, in particular, are missing a great opportunity — just look at the first screen of its e-mail:

Why doesn’t McAfee mention the offer, “Only $19.99, save $20 off the regular $39.99 subscription price,” along with a call to action (“Renew Now”) in the AutoPreview copy? It’s a compelling deal that might draw in people who would otherwise scroll right by.

Full disclosure: I haven’t read any studies quantifying the percentage of people who use the AutoPreview feature in Outlook or who actively read the snippets that appear after the subject line in Gmail. But I’ve seen dramatic increases in both open and response rates when I’ve optimized AutoPreview and snippet copy for clients. It’s an inexpensive thing to test or just to implement — and it has a huge potential upside.

Next time we’ll talk about other things you can do to increase your e-mail renewal efforts’ return on investment. Until then, see if you can get a boost in response from one or more of the ideas above — and let me know how it goes.

Until next time,

Jeanne

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