7 tips to identify and improve email churn in your marketing campaign
What is churn? Types of churn and churners The client’s perspective on leaving Why is understanding churn important? Customer retention and customer churn are not the same thing 7 ways to keep customers from leaving To conclude
Let’s talk about churn. And no, we don’t mean butter 😄
Email marketing is all about attracting new leads and encouraging them to become customers and, eventually, brand advocates. Throughout the customer lifetime, client retention is critical, and this concerns all of you. There are numerous forms of client retention emails that might aid your email marketing efforts in reducing churn.
The percentage of subscribers that quit reading your emails is referred to as the email churn rate. This rejection rate is responsible for the loss of 25% to 30% of your list members every year, thus it is critical to understand how to calculate it.
What is churn?
A churn rate is the percentage of people who have left a group in a given period of time, so an email churn rate is the number of clients who have left an email list during the observed period, be that a month, a quarter, or a year.
It costs significantly more resources (time, energy, money) to seek out new clients than it does to retain existing ones. That’s why identifying your churn rate and roots is so important to the success of your marketing campaign.
You can calculate your churn rate simply by selecting a time period (we will use one year as an example) and using the formula:
(Subscribers at beginning of the year – subscribers at end of year) / (total number of subscribers at beginning of the year) X 100 = Churn rate
Let’s use an example. Anne is running a dietary blog and she starts the year with 500 subscribers. She ends the year with 478 subscribers. Her churn rate is then:
(500 – 478) / 500 X 100 = 4.4%
You can also dig a little more in depth into your churn rate in order to help yourself identify areas where churn can be avoided in the future by calculating:
([unsubscribes + soft bounces + hard bounces + spam] + [complaints + inactive subscribers])) / (total subscribers at beginning of the year) X 100 = Churn rate
Let’s take the same example but break down Anne’s client loss. She had 10 unsubscribe, 1 soft bounce, 2 hard bounces, no spam, no complaints, and 9 inactive subscribers. Her formula would now look like:
([10+1+2] + ) / 500 X 100 = 4.4%
The two categories in brackets within this formula represent two different types of churn.
Types of churn and churners
There are two main types of churn:
Transparent churn is also called voluntary churn and as such is fairly easy to recognize. This type of churn comes from clients who decide they no longer want to receive your emails and voluntarily click the unsubscribe button or intentionally send your emails to spam.
It also includes invalid and nonexistent email addresses that cause your email to bounce. This is the churn represented in the first bracket of the second formula. Due to its nature, this type of churn is next to impossible to fix without herculean efforts 💪 and may not be worth the energy.
This type of churn is also called involuntary churn and takes a little more finesse to understand. It stems from clients not opening emails because they aren’t interested, it comes at the wrong time of day and gets buried, they prefer a different email address, it goes directly to their spam folder, and so on. This churn is represented in the second bracket of the second formula.
Opaque churn, despite its gloomy name, can in fact be fixed by re-evaluating and re-engaging with your clients, redirecting your energies, and renewing your sender reputation.
The client’s perspective on leaving
Looking at this from the client perspective, there are many reasons they might unsubscribe from your email list (or churn out). The possibilities include:
Their interest changed
Client interests change due to a variety of reasons, some are within your control but many are not. This shift may be due to a change in the client’s circumstances, priorities, tastes, or even financial status. It may also stem from unmet needs with regards to your engagement with them.
They are suffering list fatigue
List fatigue happens when subscribers have simply lost interest. Though the reasons for this lost interest may not be so simple for you to uncover. They may have lost interest because:
- your content doesn’t appeal to them,
- you aren’t sending them the right type of content,
- you’re sending them too much and they’ve become annoyed or you’re sending them too little and they’ve forgotten about you,
- You’re sending emails at the wrong time of the day/week/season,
- You’re putting too much emphasis on selling and not enough on relating.
This may require some trial and error to remedy and the subscribers with list fatigue will need to be sorted into their proper solutions once you find them, as not all subscribers will have the same issues.
They’ve been lured away by another company
You’ll need to pay close attention to the competition to avoid this problem. If this happens, the other company accurately targets the client’s problem with a solution. You may be able to learn from their success and woo the client back.
There weren’t enough attractive promotions
This is rather self-explanatory. If it’s possible, you may increase the frequency of your promotional offers or you could try to make your existing offers more attractive but be careful not to stray into spam territory with subjects like “Free!”.
They changed preferred channels
The subscriber may have changed their preferred interaction channel from email to something like social media. Instagram, YouTube, and TikTok all command strong followings and are excellent tools for marketing.
Why is understanding churn important?
Why is understanding the types and reasons for churn important? Isn’t knowing your churn rate enough? Well, no. Simply knowing that the problem exists and how big it is won’t help you fix it. Customer retention is an ever-evolving problem that may require not only multiple solutions but also different solutions for different customers.
Customer retention and customer churn are not the same thing
Marketers in the trenches already know that these terms refer to different things, but those just starting out can sometimes confuse them because they both fall under the umbrella term “customer retention.”
In email marketing, when we say customer retention, we mean the part of email marketing campaigns that re-introduces your brand to previous customers or re-engages with inactive subscribers. When we say customer churn, we are referring to the percentage of subscribers that leave your email list, as calculated above.
Here, we can say that effectively using customer retention campaigns can prevent or at least reduce your customer churn.
7 ways to keep customers from leaving
If customer retention is the goal, then what are the steps? There are a myriad of great ways to re-engage with customers and keep them engaging with you. We’ve put together 7 of our favorite methods to prevent churn and encourage customer retention.
1. Initial preference settings
Having your customers set their communication preferences during their first interaction (list opt-in, first purchase, etc.) is an excellent way to preempt churn later down the line. You can let customers choose the type of content they prefer to receive (promotional, informational, educational, etc.) and the frequency with which they would like to receive these offers (daily, weekly, monthly, special occasions only). You can also offer periodic preference update emails to stay on top of clients’ ever-changing needs. This provides you with direct market research and the customer with the content most suited to their needs. Win-win!
2. Welcome email
Just like the initial preference settings, a welcome email is a preemptive strike against churn by starting your relationship with the customer off on the right foot. This email doesn’t have to be heavy content, brevity is in fact a benefit. External links can tell the customer more about your brand without pushing too hard. A sign-on promotion may also inspire just that little bit of extra loyalty!
3. Thank you and Feedback emails
We are taught from a young age to say please and thank you. We’ve said please when we asked our customers to opt-in to our email list or purchase our product. Now it’s time to say thank you! Customers appreciate it when you appreciate them. When we show our customers that we value them, they value us more in return.
You can also use these thank you emails to get feedback about the customer’s experience and use that to improve your offer and improve customer retention.
4. Personalized emails
Personalized emails let the client know you are paying attention to them and you know what they want. You can have certain emails triggered after a customer completes certain actions. Welcome and thank you emails could fall under this category but so can certain promotional emails. You can also trigger emails when clients don’t take action. Say if a customer leaves your site with items still unpurchased in their cart. You can trigger an email to remind them after a certain amount of time to hopefully bring them back to your site.
5. Congratulatory and Feel-good emails
If your customers have taken the time to give you information about themselves, like their birthday or other demographics, you can build your relationship by sending them happy birthday, happy opt-in anniversary, happy holidays, or congratulatory emails. These emails build brand recognition and brand loyalty and make churn less likely down the line.
6. Monitor and curate cross-channel activity
There are multiple platforms that customers engage on today and many have strong preferences for one medium over the other. If people in the younger generation barely check their emails outside of working hours, the risk of churn is increased and customer retention becomes that much more difficult. If you generate content that can be cross posted with minimal effort, you cast a wider net and retain more customers.
7. Segment your customers
Taking the time to segment your customers based on buying habits, engagement, and loyalty can help you identify and remedy churn patterns. For example, new customers will need more interaction than long-term, engaged customers but you can also reward the long-term customers for their loyalty. Customers who have recently reduced their buying habits or engagement are your first targets. You can reach out to them with any of the above email types to boost engagement and monitor their responses. Having these client segments lets you know where exactly to direct your energy to have the best result.
Churn may happen at several times of the customer lifecycle, such as after the initial series of welcome emails, after the first transaction, and cart abandonment. Client retention rates are increased when existing customer ties are nurtured through well-designed email marketing. Reduced list churn aids in the retention of your top clients and increases their lifetime value.