Turning Subscriber Acquisition Over to the Subscriber

  |  February 22, 2011   |  Comments

There is a change happening in the way consumers interact with friends, family, and brands online; and it's having a profound impact on how businesses acquire customers.

E-mail marketing has become a mature channel. Metrics and key performance indicators (KPIs) have been established, and formulas that define how to value an e-mail address or compute program-centric ROI are commonplace. As e-mail marketers, it becomes harder and harder to innovate.

Innovation introduces risk and few brands want to mess with the most profitable direct channel in digital marketing. That said, it's critical to stay focused on innovation and leverage new ideas and approaches as a means to elevate overall program effectiveness. So where to innovate? Why not in one of the oldest and most challenging areas e-mail marketers are faced with: subscriber acquisition and list growth.

Over the years, a plethora of strategies have been employed to grow e-mail files – from organic subscriptions (still arguably the most effective) to e-mail appending and co-registration. Entire industries have come and gone to assist the e-mail subscriber in growing reach through permission (in most cases) and outright unsolicited mailing in others. There is a change happening in the way consumers interact with friends, family, peers, and brands online, and this change is having a profound impact on how businesses acquire customers.

The social Web has introduced a level of transparency that puts consumers in charge of brand perception in the marketplace. Access to information (and in most cases the information itself) is now controlled by your subscribers, not the other way around. In his book "Flip the Funnel: How to Use Existing Customers to Gain New Ones," Joseph Jaffe explains that the customer acquisition funnel needs to start with your current customers, carrying their experience forward across digital media to drive new acquisition.

Similarly, e-mail programs should look to the community of subscribers to help identify potential subscribers, communicate the value of the e-mail relationship, and ultimately take part in the creation of content within e-mail programs.

Let's look at each of these steps and how flipping the e-mail acquisition funnel can drive material growth and engagement.

Identifying Potential Subscribers

Most sophisticated marketers do an excellent job of identifying consumer profiles and using those profiles to influence acquisition opportunities. In a co-registration environment, brands will place subscription opportunities on sites that fit the target profile and watch the new acquisitions flow in. The challenge is not acquiring new names; it's getting value and conversions from the names that are acquired. Consider flipping the acquisition funnel.

Many brands are making it easy for their own subscribers to recruit and sign friends up for programs. This is where innovation comes in. For years, e-mail marketers have attempted to leverage FTAF (forward to a friend) with little overall subscriber impact. More recently, they have also engaged SWYN (share with your network), which, despite being widely touted as an e-mail best practice, delivers similar results. Some brands have gone beyond this and truly innovated around subscriber acquisition by flipping the funnel.

Consider daily sales events sites like HauteLook, Rue La La, and Gilt Groupe. These sites have been able to rapidly grow large e-mail subscription files and have done so by: a) creating an excellent customer/subscriber experience, and b) embedding and rewarding referral marketing.

As you can see on the customized home page of a HauteLook subscriber, the "Invite a Friend" link benefits from some very valuable real estate. In addition, beyond being well-positioned, the friend invitation program is incentivized, rewarding advocacy from the current subscriber base.


Finally, once the subscriber is engaged, the brand allows the subscriber to extend reach via non-e-mail channels as seen below.


At the end of the day, the brand is putting subscribers in charge of acquisition and paying their customers for it (rather than publishers or co-registration partners) and having great success.

Communicate the Value of the E-mail Relationship

Trust between brands and consumers is constantly being challenged. As the control of information passes from Madison Avenue to Blogger, Twitter, and Facebook, it's critical that the value of an e-mail program is clear to the subscriber as well as to the communities and peer networks in which they participate. Your subscribers are unlikely to tout your program if they see little or no value in the content or are unengaged with the program in general. This problem has been compounded by the push by many brands to send more e-mail more frequently. As cadence in the e-mail program increases, it becomes more and more complicated to present new and unique content to the subscriber.

Subscribers are also unlikely to communicate the value of the e-mail relationship to their friends if the same content is available through other digital or traditional channels. With so many engagement options between brand and consumer, it's critical that each digital channel (e-mail, Facebook, YouTube, etc.) presents distinct content elements and value. This assures subscribers that they are not recruiting peers to engage with content that is easily attainable elsewhere. The development of exclusive channel content is critical to flipping the funnel and building a base of brand advocates that recruit subscribers on your behalf.

Subscribers Create Content

The ultimate example of flipping the funnel in the e-mail subscription process is allowing subscribers to contribute content and actually become publishers alongside the brand. Many companies have invested in listening technologies to get a better sense of what the customers are saying about their services and products and in general where passions and interests lie. However, few companies have leveraged this insight to drive content within their e-mail programs or corporate communications. Even fewer have asked their customers to become regular contributors within their communications. E-mail marketers should look to the trends we're seeing in customer service organizations. Communities are being created where participants can answer questions and address the needs of each other rather than having to speak to an expert from the brand. In many cases, the creation of support articles and customer FAQs are being outsourced to the customer base. The same should be considered for e-mail. Content created by the subscriber, for the subscriber, is very likely to increase the value of communication along with the level of advocacy within the subscriber base, resulting in more recruitment from current customers.

Innovation comes in many forms. As we look at advanced e-mail marketing strategies, some of the most effective may have little to do with technology advances and more to do with how we react to the fact that communication has changed and control has shifted from the marketer to the subscriber. Indeed, the funnel has already flipped!

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Ryan Deutsch

 Ryan Deutsch was vice president of strategic services, StrongMail,  up until July 2011. There, he worked closely with senior e-mail marketers at large brands to help them increase subscriber engagement and improve program effectiveness. Before that, Deutsch served as vice president of marketing automation at Premiere Global Services, where he was instrumental in managing customer relationships with numerous global brands. Previously, Deutsch held senior sales and marketing management roles at Twelve Horses and Springdot.

An online marketing veteran and industry thought leader, Deutsch has more than 14 years of direct marketing experience across the catalog, retail, and publishing industries. Deutsch is a regular contributor to marketing industry publications, including MediaPost, DM News, BtoB Magazine, and Chief Marketer, and is a frequent speaker at industry events, including the DMA Annual, eTail, Email Evolution Conference, ad:tech, and the MediaPost Email Insider Summit.

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