Keith Reinhardt — February 26, 2020 As a marketer, you know customer retention is just as important as acquisition. What steps is your company taking to stay top of mind with customers and keep them coming back?
If it’s not already, email recovery should be a critical part of your customer retention strategy. Recovery is the process of getting back in touch with dormant customers. They might not have gone over to your competition or unsubscribed from your email program, but their email addresses are no longer valid or up to date.
Customer Retention Tip: Update Bouncing & Inactive Customer Email Addresses
Being out of touch with those customers is more serious than not being able to send them email promotions. You also can’t send messages subscribers really like, such as
- Birthday greetings
- Loyalty program rewards and updates
- Account reminders
- Customer-service notices
This makes customer acquisition an uphill battle.
“It’s really hard to think in terms of email recovery when you are putting together acquisition programs, but it’s really important,” Suzanne Shaughnessy of FreshAddress says on a recent webinar, Bounce Back From Email Bounces! How Smart Marketers Fight List Attrition (click to view the webinar recording).
“These are valued clients and customers,” she says. “An important question is what’s the value of your customers, and what value do you realize by being able to reach them by email?”
You could wait for them to update their email addresses or re subscribe, but too much money is at stake. Instead, take an active approach towards customer retention, and try to update as many customer addresses as you can using Email Change of Address (ECOA).
Why Email Recovery & ECOA Matter
To understand how ECOA can help you re-connect with customers who have gone missing on your list, you need to know how and why they disappear.
“List attrition” is the general term for subscriber loss, whether they:
- Choose to leave (unsubscribing)
- Get taken off your list (after they click “report spam” on your email)
- Close their email accounts without updating their addresses.
List attrition also covers subscribers who:
- Ghost your email (change addresses without closing accounts)
- Gave you deliverable but low-value addresses like role or disposable addresses
- Just don’t open your emails
List Attrition: A Customer Retention Epidemic
Unsubscribed or spam-complaint addresses are off the table, and some hard-bouncing addresses aren’t worth recovering. But you have a lot of money tied up in the rest of your lost addresses. This includes both the money you spent to acquire them with incentives or discounts and in the potential revenue they represent.
- Roughly 2.5% of the average retail email list is lost through bounces, unsubscribes and spam complaints each month.
- That adds up to an annual loss in the range of 25% to 30%. When you factor in in-actives, this number can run can much higher.
Don’t just lop off non-responding addresses, either. Mailchimp discovered that even non-responding subscribers buy more often and spend more than non-subscribers.
Image credit: Mailchimp
All of these reasons – your investment, the potential revenue and the sheer size of the problem – explain why you should try recovering as many bouncing and inactive addresses as possible by using ECOA.
How ECOA works
ECOA is like National Change of Address (NCOA) for postal mailing lists. With ECOA, an email address is compared against a specialized “change pair” database, in which each data set includes the old address and a potential matching new address.
For FreshAddress, once we identify a potential match, the client company can use it to send a permission request. If the recipient gives permission, that new address can replace the old one in the database.
In a nutshell, the process goes like this: “Hygiene – matching – messaging – hygiene.”
The FreshAddress email recovery process starts with extensive hygiene on the existing list to remove problem addresses. Any matching new addresses go through the same hygiene process to weed out undesirables.
“That final cleanse really makes sure that what you get as updates for your file are truly safe to send, that these are (consumers’) most valuable, updated and preferred email addresses,” Suzanne says.
2 Customer Retention & ECOA Success Stories
- $ 670,000 in new donations: FreshAddress worked with an international relief and development organization with a legacy database of largely unreachable addresses. Besides gaining six figures in new donations, the non-profit updated 135,000 hard-bouncing addresses.
- 25% increase in sales: That’s what happened when a U.S.-based national pet-foods supply retailer updated 30,000 bouncing, inactive and invalid addresses in its loyalty program membership.
Both success stories are good reminders that ECOA can more than pay for itself with one refresh. It doesn’t substitute for ongoing list hygiene, but a quarterly or twice-yearly application can keep unusable addresses from accumulating.
How to find an ECOA provider
As with any email database service, you need to investigate ECOA providers carefully. Here are some things to watch for:
- How does the service provider get its data? Does it offer a website where consumers can register their preferences and old and new addresses?
- Does the vendor work with only 100% opted-in email addresses? Can it verify its source data and legal status for each opt-in?
- What’s the vendor’s reputation? Is it trustworthy and knowledgeable about laws and data handling?
- Does the vendor investigate you, too? A reputable vendor wants to know how old your data is, how you obtained the addresses and whether you, too, conform to your country’s laws and best practices.
- How does the price for the service compare? Everybody’s shopping for the best value, but with ECOA and other list-hygiene practices, if the price sounds too good to be true, it probably is.
What to Do Post Email Recovery
Be kind to your recovered subscribers! Handle them gently. Reintroduce your brand and be sure you are clear on your value proposition. Then, deliver on it with every email you send.
It wouldn’t hurt to review your entire email program and look for ways to win your subscribers’ trust. Give them more control over what they receive from you. If subscribers can trust you, they’ll be more likely to give you their preferred email addresses.
Also, look at your acquisition sources. Do you validate email addresses right at opt-in for inaccurate or low-value addresses? You might lose a few questionable opt-ins, but your reward will be more valuable email addresses.
List attrition happens to everybody. But you can reduce it with ECOA and regular list hygiene, coupled with an email program that delivers on its value propositions and treats its subscribers with respect.
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