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Apr 03, 2012
Case Study

Email Marketing: Delivery rate increases from 60% to 99% by separating inactive subscribers

SUMMARY: Email marketers are masters of improving response and adding subscribers. But, problems with deliverability can be more difficult to handle. How can you improve your reputation and get more emails into the inbox?

In this case study, a marketing team changed how it handled inactive subscribers and pushed delivery rates above 90%. The team even re-engaged a few dormant contacts along the way. Find out how the team split its sender reputation and lifted results across the board.
by Adam T. Sutton, Senior Reporter

CHALLENGE

Marketing teams with good email strategies are not immune to problems with deliverability. One person who can stand witness is John Kavaliauskas, Manager, Email Marketing, TBC Corporation.

TBC sends email from a dedicated IP address, which gives the company more control over its sender reputation and deliverability. Despite the team's commitment to segmentation and personalization, its average delivery rates struggled to break the 50%-60% range.

Kavaliauskas manages email marketing across Tire Kingdom, Merchant's Tires, Big O Tires and other TBC brands. He thought the problem stemmed from the inactive subscribers in the company's list.

"We were sending to our entire list from one IP address, regardless of whether [subscribers] were engaged or unengaged," he says.

Kavaliauskas did not want to lose these subscribers, but he also did not want their poor engagement rates to tarnish TBC's reputation and pull down delivery rates. He needed to isolate this group to stop it from hurting the entire program.

CAMPAIGN

TBC ran a test in late 2011 to see if separating the inactive subscribers would improve deliverability and inbox placement across the program. Kavaliauskas hoped it would also provide an opportunity to reactivate a portion of the dormant list.

Almost all the work for this campaign was done in-house. The team took these four steps:

Step #1. Have control of your reputation

Email services provided by companies such as AOL and Google monitor your reputation as an email sender. They use it to decide whether to deliver your emails, block them, or toss them into the junk box. They track reputation by IP address.

There are two types of IP addresses for sending emails:
  • A Shared IP Address is used by two or more companies to send emails. They are often established by Email Service Providers (ESPs) and used by their customers.

Since ISPs and webmail providers track reputation by IP address, the companies that share IPs also share sender reputations. If you're on a shared IP, then part of your reputation is in the hands of other companies. This gives you less control over your reputation, but it also spreads the risk that you'll harm your deliverability through mistakes if you're inexperienced.
  • A Dedicated IP Address is used by a single company. It is "dedicated" to that company, which means the company has full control over the email sent from that IP and its reputation as a sender.

The reputation of a dedicated IP is only as strong as the email program it serves. They are recommended for experienced email marketers who have large programs.

A word of caution

If you want to set up a dedicated IP, make sure you have a firm grasp on the best practices. Otherwise you could accidentally drive your reputation into the ground and bury your delivery rates with it. For marketers with only a few thousand subscribers, a dedicated IP is often unnecessary.

Step #2. Separate the inactive subscribers

TBC had a single dedicated IP address for its email marketing. Kavaliauskas' theory was that using this IP to send emails to inactive subscribers was harming the program's reputation. To stop this, the team wanted to establish a second IP for inactive subscribers.

The team split TBC's list into two groups:
  1. Inactive subscribers - people who had not opened or clicked an email in six months or longer.

  2. Active subscribers - people who had opened or clicked an email with the last six months.

The team reached out to its ESP to set up a second dedicated IP address to be used solely for emailing the inactive subscribers. The original IP would only be used to reach the active list.

Having two IPs split TBC's sender reputation. Kavaliauskas hoped this would prevent the poor engagement rates of the inactive subscribers from harming the reputation of the larger program.

Talk to your ESP

Many ESPs offer dedicated IP addresses. To establish one (or a second one), reach out and ask about the required steps. Do not be surprised if you're asked to prove that you can maintain a good reputation. A good ESP will want to make sure you have the ability to succeed.

"Each ESP does it a little differently, but I think most that I have dealt with are able to handle breaking it out," Kavaliauskas says.

Step #3. Respect the good list, improve the bad

Since the inactive list no longer weighed down the reputation of TBC's main program, the team only had to stay the course to improve its reputation and deliverability. Over time, the stronger engagement rates among these subscribers lifted the reputation of the IP address and improved deliverability metrics (results are below).

For the other list, Kavaliauskas worried that the concentration of poor engagement rates on a single IP could spell disaster for this portion of the company's email program. Without any good subscribers receiving emails from the new IP, would its reputation plummet?

Instead of letting the list go into a tailspin, his team took the following steps:
  • Cut the frequency - subscribers on this list received one email every four to six weeks. Normal subscribers receive an email every two to four weeks.

  • Remove bounced addresses - servers will "bounce" an incoming email when it is sent to an invalid or unavailable address, and alert the sender of a failed delivery. There are "hard bounces," which indicate the email address is invalid, and "soft bounces," which indicate the address has a full inbox or is unavailable for another reason.
    It is common to stop emailing "hard bounces" after a single occurrence and to stop emailing "soft bounces" after three to five consecutive occurrences.

  • Update addresses - the team worked to correct typos in the addresses in its list, and also ran an Email Change of Address (ECOA) campaign which encouraged inactive subscribers to provide a current address.

Step #4. Send re-engagement campaigns

Kavaliauskas' team wanted to turn dormant subscribers into high performers again. To re-engage them, his team took random samples of the inactive list (about 5,000 subscribers for each treatment) and tested different subject lines to see which earned the highest open rates.

"We're continuously doing this on a monthly basis," he says. Kavaliauskas has a background in statistics and ensures the tests are valid.

The team usually tests four or five subject lines per campaign. The subject line shown to have the highest open rate is used in a final email to the remainder of the list. Any subscribers who open or click an email are moved from the "inactive" list and onto the "active" list on the other IP.

Strong offers and good content

The team sometimes tests more than 10 subject lines for a campaign. For a recent promotional email sent to this group, the team tested 12 subject lines. Here's the winner:

"One Weekend Only: ♥ For Friends & Family"

Although this email focused on discount offers, the team normally avoids sending re-engagement emails that focus solely on promotions unless they offer a strong discount.

"We have found [promotional emails] really drive the complaint rates up and the frustration up. So what we are trying to do is send either our newsletter or a sample of the newsletter with promotions built in, but really trying to give them a reason to stick around in our list and become engaged," Kavaliauskas says.



RESULTS

Kavaliauskas hoped this strategy would improve deliverability rates for TBC's most active subscribers. He was surprised when he noticed improvements in both groups.

"They both improved significantly, especially the engaged [list]. I'm glad the unengaged IP improved as much as it did, but it did not improve as much as the engaged one," he says.

Results among the most active subscribers:
  • Sender score now ranges in the high 90s* (a greater than 40% improvement)

  • Greater than 50% improvement in average inbox placement rate

  • Greater than 99% average delivery rate

* - SenderScore.org is a free service run by Return Path that scores sender reputation of an email server from 0 to 100. See the "useful links" section below for more information.

“We have seen a great increase in response rates from all of our recipients," says Kayleigh Walsh, Email Marketing Analyst, TBC Corporation. "We have seen increases in deliverability, clickthrough rates and open rates."

Results among the inactive subscribers:
  • 30% improvement in sender score*

  • About 90% average delivery rate

On average, the team's re-engagement emails convince 3% to 5% of the inactive subscribers to click or open an email, which shifts those subscribers to the active list. (The team measures opens and clicks since subscribers view and click an email without images enabled, which would not register an 'open' in tracking software.)

"It doesn't seem like much, but when we're mailing millions, it adds up," Kavaliauskas says.

Third time's a charm

Going forward, the team wants to establish another IP address and segment subscribers into three groups: engaged, semi-engaged and unengaged.

"That is our long-term goal," Kavaliauskas says. "With ISPs looking at engagement as a big factor, the theory is that on the very-engaged IP we are going to have the best placement and the best deliverability."

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Related Resources:

CREATIVE SAMPLE:
  1. Promotional email

B2B Email Deliverability: 11% of B2B email is classified as spam, these 6 tactics will help

Email Deliverability: 6 tactics achieve near-perfect delivery rate for local deals site

Email Deliverability: Global stats show North America leads — but we have work to do

Webinar Replay -- Improve Email Deliverability: Tactics for Handling Complaints and Boosting Reputation

Third-party Links and Email Deliverability: 4 Tips to Protect Your Reputation

SenderScore.org

TBC Corporation

See Also:

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