Guest Post by Kath Pay, Marketing Director, cloud.IQ
Many email marketers tell me that growing their list isn’t within their remit and as such they don’t pay any attention to it as they’re not rewarded on list growth but on opens and clicks or on sales and revenue. Regardless of whether you’re rewarded directly for list growth or not, it benefits you to grow your list and I’m going to show you why.
So for starters, let’s look at why it’s important to focus on list growth if you’re rewarded on opens and clicks.
The majority of us have all heard about the phenomenon known as the Honeymoon Period. Simply put it means the newer the subscriber, the more likely they are to open and click.
The below chart shows that new subscribers are actively opening this brand’s emails and that over time this engagement reduces.
Figure 1: Graph depicting the effect of subscription length on open rate [Alchemy Worx audit for an online publishing company, March 2014]
Not only are they actively opening the emails but they’re also actively clicking and engaging as well. This is why implementing a 1st Purchase / Welcome Subscriber Programme is essential to success – as it’s important to engage them early on in order to convert these engaged subscribers in the Honeymoon Period via a well-strategised programme to ensure the first purchase.
Figure 2: Graph depicting the effect of subscription length on click rate [Alchemy Worx audit for an online publishing company, March 2014]
We spend huge amounts on driving traffic but are we doing everything we can to capture permission to market to customers? Or are we letting them leave and then paying again for them to come back to the site? More often than not, we tend to go for the harder ask – to buy – rather than the easier win and smaller ask of gaining permission to market to them. Create a business caseMost email marketers I teach/consult with have to fight for real estate on the homepage. I believe that it’s a fight worth taking up. To do so you need to mine your data and make a business case for prioritising the position of the subscription point on your homepage.
To be successful at this you ideally need to speak to what matters to your business i.e. how can growing your database help your business to achieve their objective of gaining more customers, sales and revenue?
An easy remedy or test could be to move your subscribe above the fold rather than below the fold, as this Alchemy Worx customer did.
Figure 3: Diagram depicting position of Email Sign-Up Call to Action on a website homepage
By simply moving the email signup CTA from below the fold to above the fold, the customer gained an uplift of 30% in their conversion rate. Many argue against doing this under the misbelief that using this valuable real estate to gain subscribers instead of selling product will lose you revenue. This customer found this hypothesis not to be true as you can see below. Not only did they gain more subscribers but they gained more revenue. It’s a win/win.
Figure 4: Table depicting increase in Conversion Rate and Revenue Generated [Alchemy Worx report for a small online store selling niche products]
One of the common issues I see is that the very valuable real estate on your website, such as the top right hand corner, is given over to promoting Social Media Channels, while the email signup is at the very bottom of the page.
A report just released from Forrester states that, “Email should be a focal point. …your emails get delivered more than 90% of the time, while your Facebook posts get delivered 2% of the time—and no one’s looking over your shoulder telling you what you can and can’t say in your emails. If you have to choose between adding a subscriber to your email list or gaining a new Facebook fan, go for email every time.” How can we increase our revenue by growing our list?Ok, so far we’ve just addressed the engagement impact of growing your subscribers, so let’s look now at how growing your subscribers impacts your revenue.
Looking at the below chart we can see the potential impact of subscriber growth on revenue of a small online store that sells niche products. Currently they gain on average 554 new subscribers per month. Of those subscribers, an average 34% go on to make a purchase. Based on an average order value (AOV) of £15, we can start to forecast the incremental revenue that a growing list can deliver.
Assuming that you have a successful 1st purchase programme in place to convert your subscribers into customers, then not only is the online store potentially looking at gaining 400% more subscribers that you can now market to but you have also increased your revenue per month by 400%!
Figure 5: Table depicting relationship between Opt-In Rate and Revenue Increase [Alchemy Worx report for a small online store selling niche products]
Also, it’s important to keep in mind these figures are just looking at the short-term impact – they’re not taking into consideration further purchases down the track by these customers, which can be enhanced by implementing a Welcome Customer/2nd Purchase Programme.
Back to the chart – you may ask why did we choose to go up to 400% increase? The answer is because this was a business case we created for a client to encourage them to grow their list using popovers, otherwise known as lightboxes, which is simple conversion technology that can plug directly into any website. These figures aren’t pulled out of thin air. At cloud.IQ we’ve had an uplift of 300% of whitepaper downloads and there are many retailers and publishers who have increased their subscribers by up to 400% using these popovers.
I’ll leave you with one last thought. In this brand’s case, as a result of data mining we found that customers who are less than 11 months old currently make up 46% of their database and account for 60% of the revenue directly attributed to email. So considering the value these newer customers contribute to the total earned revenue, the question is – what impact will growing your list, taking into consideration the natural engagement of new subscribers, have on your bottom line?