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Inactive Email Addresses: To Mail, Not to Mail…or Something Else?

  |  July 21, 2014   |  Comments

If handled correctly, "inactives" still have the potential to convert and produce revenue. How can marketers best reconnect with these inactive email addresses?

Inactive email addresses are people on your email list who haven't opened, clicked, or shown any sign of life in a while. Depending on your send frequency, "a while" could be a few months or a few weeks. It's basically the point where you go, "Oh my, why aren't they interested in my email anymore?"

What to do about it? Reactivation campaigns are a good idea. I wrote about reactivation campaigns in 2011 and I did a part one and part two on them back in 2008 (Note: Yes, even though the columns are old, the information is still accurate and useful).

But today I'm here to talk about the post-reactivation campaign issue: what to do with inactives that remain staunchly inactive. They didn't respond to your reactivation campaign and you have to decide what to do with them.

Do you take the advice of so many email marketing experts (many of them friends of mine, but we do sometimes disagree) and stop mailing them? Or do you throw caution to the wind and continue to mail to them, understanding that this increases your risk of deliverability issues?

Or you take a "via media" approach - the middle road; something between standard operation procedure on sends and never mailing to them again.

That's always been my preference. And if you take a few precautions it can be the best way to get protection from deliverability issues AND still benefit from any actions (revenue-generating or whatever your bottom line goal is) the inactives might take in the future. Here's what I've done with my clients, along with a brief case study from the Alchemy Worx archive which supports this approach.

First and foremost: you need to move your inactive sends to a separate IP address from the rest of your email program. Your inactive sends are "high-risk" sends - they have a higher likelihood of generating spam complaints, hitting spam traps, and generally not engaging your audience (which could damage your email reputation). So these sends should not share an IP address with your regular marketing program, your internal email accounts, your transactional email messages - you get the idea.

The next question is one of frequency. There are varying views on this point. Since these folks are inactive, my recommendation is to send to them less frequently than you send to your active list. Seems like a good way to hedge your bets, since you aren't necessarily expecting any sales from this group (more on that later).

For many of my clients we look at their peak sales seasons (for a toy company client these were pre-Easter, pre-summer, and pre-Christmas) and mail the inactive names only within these windows. You could also decide to just deliver every other email you send to your active list to this list. Or you could use a different formula. It's up to you.

OK, back to that point above. You're probably asking yourself, "Why is she talking to me about sending to inactives - if they are truly inactive, they won't open, click, or generate any revenue for me. So why would I send to them?" Great question. Here's where the case study comes in.

An Alchemy Worx client did a test. They resurrected their inactive file and sent to it.

They sent 19 emails over the course of six weeks. Sound like a lot? Not in the retail industry (which they are in) - an informal study of my inbox showed an average of 5.2 emails a week in June 2014 from retail email marketers - so the client is below that. During a slightly longer period (seven weeks) the client sent 27 messages to their active list.

inactive-with-revenue-and-sends

Did the inactive subscribers respond at the same rate as the active subscribers? No. The open and click reach (unique subscribers who opened or clicked on at least one email during the period), as well as the conversion rate, was much, much lower.

But did the inactive subscribers generate revenue? Yes. While their conversion rate was lower, the ones that put things in their carts didn't behave all that differently from active subscribers. The cart conversion rates were almost the same; the average order value was about 15 percent lower, but there was still revenue here - revenue that would have been lost if the client didn't send to this inactive list.

Of course, once you begin this process, the inactive email addresses that opened, clicked, and/or purchased should be moved back to your active file after each send for future mailings.

One word of caution in all this: you have to do the math to determine whether or not mailing to your inactives over the longer term makes sense.

What is the incremental cost of continuing to mail to inactives? At a minimum you need to include the costs of:

  • a dedicated IP address
  • if you're using an ESP, the cost of this send (usually calculated on a cost-per-thousand basis)
  • the time and resources required to set up and handle tracking and reporting on the send to this segment
  • any other costs this send to inactives will incur

Different organizations calculate costs different ways. In the publishing world (where I spent much of my career) we had (a) renewal revenue and (b) small incremental costs of adding a new subscriber. So if we could bring in someone at the cost of a single year's subscription we knew we could make money in the longer term. One-time purchases, without renewal options, are very different. You need to factor in the cost of the products or services sold and make a profit on each and every sale if there's not a renewal option.

If you can generate an additional $1 in revenue for $1 or less, it's likely worth it. If the cost of getting that $1 in revenue is $1.01 or more, it may not be worth it. It all depends on your model. Sometimes you can actually adjust your send frequency to the inactives to make it worth your while. You have to test it, see what revenue is generated, and then make some informed decisions about moving forward.

Is it easy? It's not difficult, but it takes some attention and thought. But if you are looking to boost your revenue from email, look at how you are treating your inactive subscribers. There may be money you are leaving on the table there if you aren't mailing them - and if you are still mailing them, you may be able to make them more profitable if you cut back on your mailing frequency.

Until next time,
Jeanne

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ABOUT THE AUTHOR

Jeanne Jennings

Jeanne Jennings is a 20 year veteran of the online/email marketing industry, having started her career with CompuServe in the late 1980s. As Vice President of Global Strategic Services for Alchemy Worx, Jennings helps organizations become more effective and more profitable online. Previously Jennings ran her own email marketing consultancy with a focus on strategy; clients included AARP, Hasbro, Scholastic, Verizon and Weight Watchers International. Want to learn more? Check out her blog.

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