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Customer Retention. Automated

Why Your Open & Click Rates Are Misleading Metrics

Posted by Polly Flinch on Jul 16, 2015 8:44:57 AM
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In a recent retention marketing survey, we found that over 50% of retailers send the same email promotions to their entire customer base. As all good marketers do, these retailers look at open and click rates for each send, but there is just one glaring problem: these reported open and click rates don't show retailers how key customer segments are interacting with their emails. As we head into the holiday season, there is one simple and powerful change retailers can make to increase engagement and drive revenue.

Let's say a retailer sends an email to their entire list and reports that the open rate was 12.6% and the click rate was .5%


From these numbers, we know that there might have been an issue with the Call-to-action or offer, but that the subject line was at least garnering engagement. But what if this retailer was able to report back on each of their key segments? All of a sudden they are able to better understand their customers and interact in a more meaningful way, while working to increase email engagement. Let's pretend that the retailer in question segmented their list, here is what they would see: 


It's clear from this data that best customers and 2x purchasers open the emails at a higher rate; however, 1x purchasers actually click through from the email more consistently than 2x purchasers. So what does this data say when you compare the results for each segment? Here are a few quick observations: 

  1. The Call To Action (CTA) is not resonating with 2x purchasers
  2. The subject line needs to be stronger for 1x purchasers
  3. Both subject line and CTA need to be tweaked or changed for win-back and non-purchasers, as these two segments bring down the overal open and click rate that was first reported. 

By segmenting one promotional email, a retailer is able to get a better idea of what is and is not working for their key segments. But let's take this one step further, retailers should ideally work to create benchmark open and click rates for each of their key segments. Once the benchmarks are in place, retailers can use this data to understand how tweaking segmented promotional email copy, subject lines, calls to action, etc. changes engagement. 

Creating Your Benchmarks

Once you've identified your key customer segments, I've chosen best customers, 2x purchasers, 1x purchasers, non-purchasers, and churning customers for this example, you'll want to figure out what the average open and click rates for these particular segments are over a set period of time. Depending on how often you send out promotions, I would recommend spending 1-2 months collecting this data. 

Step 1: Create your promotional email 
Step 2: Clone the promotional email for each of your segments and send
Step 3: Record the average open rate and click rate for each segment 
Step 4: Repeat for 1-2 months
Step 5: Calculate the average open and click rates for each segment

Moving the Needle

Now that you know average open and click rates for your key segments, it's time to start testing different email elements for your individual segments. A/B testing is extremely valuable when trying to figure out what does and does not work. Low hanging fruit for A/B testing: 

  • Subject lines
  • Promotions ($20 off a purchase of $100 or more vs. 20% off your order of $100 or more)
  • Call To Actions (from wording to the color of the button)

One of our clients, TeeTutle, found that simply adding one word to their subject line from "A Thank You Gift From TeeTurtle" to "A Little Thank You Gift From TeeTurtle" increased engagement, astronomically. Learn more about A/B testing in this short video with TeeTurtle's CEO, Ramy Badie.  


Getting Ready For the Holidays

With the holidays approaching, it's more important than ever to make sure your cusotmers feel connected to your company in a meaningful way. Sending emails that resonate with the customer is key to staying at the top of the inbox. While all of the hubbub continues to get ready for the holiday season, it's important to take a couple extra minutes to dig through your engagement metrics and setup benchmarks to measure your success. 

Learn more about how our clients are implementing this benchmarking strategy by joining our Cables&Kits webinar on Thursday, July 23rd at 2pm EDT

Topics: Customer Retention, Best Practices

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