February 19, 2008
Marketers like to focus on statistics that show how many respondents opted into a campaign or how many consumers clicked through an email. But don’t overlook those who opt out.
Analyzing the behavior of customers who opt out can add much-needed information and, perhaps, re-engage them, too. Includes seven steps to lift customer retention rates and three measurements to determine if you really want them to stay.
Even though the average opt-out rate for email and mobile is below 1%, marketers still need to look at why customers opt out of marketing campaigns and communications just as much as why they opt in.
Any opt-out analysis must begin by understanding customer behavior: Why did they choose to go away? Knowing that answer is critical to crafting a retention strategy that might persuade them to stick around. This means you must initiate a two-way dialogue -- customers won’t always tell you what they need unless you ask them.
“Most companies don’t think about whether the channel is the issue or whatever prompted the unsubscribe request in the first place,” says Rosemary Smith, a data protection expert who heads the UK’s Direct Marketing Association. “I think it is vital to have [an opt-out strategy], and it is getting more important all of the time.”
Strategies to Retain More Customers
Here are seven steps to turn opt outs into an opportunity to retain them as customers.
-> Step #1. Encourage feedback
First, talk to your customers. Allow them to ask questions and provide appropriate and timely responses. They’ll be less likely to opt out if you show genuine interest in what they have to say.
Most email opt-outs require customers to go to a website. This provides an opportunity to ask them why they wish to opt out. Make sure you put together:
o Short online poll or questionnaire
o Feedback form
Unlike email, the universal opt-out created by mobile network operators won’t give you a chance to ask a mobile customer why they’ve opted out. Once the ‘STOP’ text message is sent, all communications stop.
Some companies use WAP-Push to uncover the reasons why. But use caution here because you can further upset customers who might already be upset by receiving an unwanted SMS message.
-> Step #2. Respect the permission you’ve been given
You’re better off growing your customer data list organically. As a data controller, you will then be able to better manage and control its quality, thereby reducing opt-out rates.
Customers who have given their direct consent to your company are more likely to feel a connection with your brand than those that are opted in by using purchased lists.
- Include reminders in each email of the given permission.
- Keep your promises: Don’t pass customer data onto third parties unless the customer said you could. Respect their consent and don’t do anything to abuse it.
With email communications, you can use an authentication partner to maintain the reputation of your mail server. It’s also a good idea to use a separate domain for your mailings, just in case you face any troublesome or damaging issues. Work with an email marketing partner, too. This will improve your deliverability rates and brand integrity.
-> Step #3. Give customers control
Allow your customers to select different communication preferences by providing a clickthrough to a profile or preference panel page, allowing customers to choose how they would like you to communicate with them.
It might not be a case that they don’t want you to talk with them or receive your offers; they might prefer to use a different channel or frequency of communication, or they might only need access to a mobile travel information service at one particular point in time. So make it easy to opt in, to opt out, change preferences and opt back in, too.
With Finextra.com, you can choose when you want to receive its email communications, whether it’s daily, weekly or monthly. Timeliness is as crucial as the frequency of communication and its relevance. Sporadically blasting out emails will increase opt-out rates.
-> Step #4. Monitor and adopt best practices
Customer retention generally requires constant monitoring, analysis and research of customer behavior and their interactions with you. Other parts of your organization might be sending out emails to the same customer database, for instance, and their opt-out rates might be lower. You could adopt similar practices.
Or you might discover that separate departments are sending out email communications to the same customers simultaneously, thereby increasing opt-out rates and reducing open rates because of the increased noise. Sending out these email messages at different times could lead to improved results. Ask yourself how and when you will gain the best results.
-> Step #5. Be transparent
There should be nothing to hide. Having a transparent data policy can make friends out of potential enemies.
Customers who complain and threaten to report you to a respective data-protection authority can sometimes be converted into loyal customers. Transparency with regard to the permissions you’ve been given and the customer information you have collated could forestall this potential threat.
Having a good data policy includes making it available to customers at every point of contact and quickly responding to any opt-out requests in an appropriate manner. This should fulfill, for example, the obligations of the CAN-SPAM Act in the US or the Data Protection Act in the UK. Go further than any national or local data-protection law requires.
Don’t’ ignore opt-out requests and maintain a traceable list of those who have actually opted out.
-> Step #6. Make sure your content is relevant
Offering relevant content involves data segmentation, insight and matching the right products and services to the right customers at the right time. Someone who bought a laptop might need security software or other applications for it. There may also be related offerings that could maintain a customer’s interest.
Customers will opt out in droves if you send email that contains irrelevant content. They might not actually opt out but decide instead to report your communications as spam. This can damage your brand and lead to you being blacklisted, which makes it harder to legitimately communicate with your customers.
-> Step #7. Keep it simple
Make sure that the entire opt-out, re-engagement and communication process is kept simple.
- Don’t hide the opt-out link or button in really tiny type in the email or on your website.
- Use good copywriting to make the unsubscribe message very clear: “Are you sure you want to leave us? Here are some reasons to stay.”
Measures to Determine if You Want Them to Stay
Of course, there is a point beyond which you might not want to retain a customer. Three typical measures to assess:
#1. Opt-out rates. As this article says, they are the obvious ones to look at.
#2. Conversion rates. The success of an opting-out customer retention strategy should not be based simply on whether the customers decided to stay. Did the retention culminate in an increase in sales, viral marketing activity or an overall improvement in the profitability of the relationship over time?
#3. ROI. How much was spent on the customer? How much would have been spent as a result of the customer being retained versus them going elsewhere?
2 Best Practice Examples
The UK’s Institute of Civil Engineers began sending out emails more than four years ago. As email volumes increased, the opt-out noise got louder. After conducting an audit of everyone who communicated within the organization, they cut the opt-out rate in half.
Awareness was created of when communications were going to be received. They’ve since increased the viewing rate of their emails. The results were attained by acting quickly rather than leaving it until it was too late. The organization began a dialogue with its members, which led to the improvements.
Packard Bell believes it is important not to pollute customer service notifications with too many offers. It’s important to balance out the priorities, such as style, volume, frequency, content and language. The company coordinated and automated all of its marketing processes, and its strategy focused on building long-term and meaningful customer relationships.
The firm integrated an email marketing platform with its CRM system. Together with its loyalty program, the initiative was able to increase customer value 50% because of the personalization of the campaigns, rather than presenting customers with a dizzying menu of options and offers.
Opt-outs are minimized by keeping in step with the customer’s needs, and by mapping out their lifecycle and journey. Their customers expect Packard Bell to know them, to talk with them and be able to adapt to their needs as a result of this ongoing but changing conversation.
Useful links related to this article
Creative samples on getting back opt-outs:
Past Sherpa articles on growing lists –
Study Data: Easiest Way to Build Your Opt-in List With Targeted Business Prospects
Grow Your Opt-In List More Quickly & Easily http://www.marketingsherpa.com/article.php?ident=29836
How to Grow Your List to 2 Million Opt-Ins -- and Which Tactics Give You Higher Quality Names http://www.marketingsherpa.com/article.php?ident=24182
How to Collect More Email Opt-Ins from Your Contact Us Form -- Seven
Email marketing specialists –
Mobile marketing specialist –
Nick Fuller, Chair of the DMA’s Mobile Marketing Council:
Professional bodies –
Direct Marketing Association (US):
Mobile Marketing Association:
Direct Marketing Association (UK) – Email and mobile marketing benchmarks:
Data protection legislation:
Federal Trade Commission:
Information Commissioner (UK):