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How emails increase persistence
I worked with a large membership organization (numbers changed to preserve confidentiality) where I learned about an aspect of email marketing that I had not encountered before. This company has about one million members who pay an annual membership fee of about $500 per year. The members receive direct mail once a month, offering them many different products. In addition about one third of them also are signed up for emails – receiving about three emails per month.
I was trying to learn the lifetime value of the email subscribers. At first, I assumed that the LTV should be based only on the products sold – since the membership fee was common to all members. But, then, I thought, “I wonder if the emails also get members to keep from cancelling their membership?”
To answer this question, I had the company’s analytical department track all members over a two year period, comparing those who received direct mail only, as compared to those who received the direct mail plus the emails. The results were amazing.
It turned out that in both groups there were members who cancelled their membership for one reason or another. Those receiving emails were more loyal as a group than those who received only direct mail. In fact, the emails saved 5.75% of the members from cancelling their membership over the two years. This made a major difference in the LTV of email subscribers. Here is how the LTV of the email subscribers looked:
Previously, the company had been basing their email subscriber LTV only on the sales in the emails. With this data they saw that by far the most important aspect of the emails were the reduction in the membership cancellation rate.
Why do emails boost persistence? Because emails are a conversation with members. They are interactive. They encourage members to respond to surveys, to see videos, to ask questions and get answers. They feel closer to the company than those who receive direct mail alone. Persistence applies to many different companies.
Arthur Middleton Hughes, vice president of The Database Marketing Institute, has presented 28 seminars on database and email marketing. Arthur has also authored several books including Strategic Database Marketing 4th Edition (McGraw-Hill 2012). He and Andrew Kordek, chief strategist and co-founder of Trendline Interactive, are hosting a two-day Email Strategy Study Group in Fort Lauderdale March 26-27, 2013, featuring group competition for email marketers responsible for subscriber acquisition, lifetime value, ratings and reviews, boosting their email budget, and doubling their ROI. To learn how to attend the Study Group,click here
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