Email Marketing and the 70-30 Rule of Business

Posted by Scott Cohen On July 12, 2010 in story time I 0 Comments

For many businesses the 70-30 rule is a reality, 70 percent of revenue is generated by 30 percent of their clients.  Most businesses have an active on-going relationship and regular communications with these customers.  They are the customers that appreciate the personal service, close relationship, fast response and/or value that the business has to offer.

The other 70 percent of customers that generate the other 30 percent of revenue are simply less engaged.  Maybe they only make a purchase once or twice a year.  They might be price shoppers, or only think they need your services under certain circumstances.  They might not even know all the services you offer, or they simply do not understand the value your company brings to the table.

Email marketing to your customer list can reflect these same percentages.  Let’s say you have a list of customer emails you send to monthly, and your open rate is 30 percent (a B2B average when no targeting is involved), and this happens month after month.  You might say, 30 percent is not very good, maybe not, but sometimes it is the reality.  Chances are the 30 percent that opens your emails each month are also the 30 percent that are your most engaged customers that drive 70 percent of your revenue.  They value your products or services and when they see an email from you, they open it.  They understand the value.

On the other side you have the 70 percent that don’t open because they are who they are, unengaged, occasional customers who for whatever reason, just don’t see the value.

Okay now some of you are saying do I just forget the 70 percent?

No!

You need to get them engaged, through testing…

A good test is to take everyone who has opened your newsletter in the last 90 days and move them to a separate list.  Now you have two lists, Active and Inactive.  You will mail your active list as usual, but when you send to the inactive, test some different subject lines, something attention grabbing, great offers, maybe personalize the subject line with their name or company name.  “Free or Special Offer for [company Name]” might work. (Make sure to only make a single change in your test or you won’t know what worked)

Crazy you say, the word free in the subject line will surely get us blocked by spam-filters.  Maybe, maybe not.  You need to test and if from your testing you find opens in this inactive group, you might just find a way to get your message in front of their eyes instead of straight to the trash folder.  If special offers and discounts are the only time they open your email, then at least you know who they are and how to market them.

Consider asking for more information about a client by setting up a preferences page that allows them to choose the type of content they will receive.  If you give them what they want they will be much happier and more likely to open future email.

And if a few emails get blocked because of the ambitious subject line, so what, chances are they weren’t going to open the “Our Company News” subject line anyway.

The From Name/Email address and the Subject Line are what your customers see first. The “From Name” and “From Email Address” can be key to getting to the inbox and your message being opened.  Don’t use newsletter@ or sales@, use someone’s real name and email address if possible.  Someone they should recognize if possible. So test, test and test again.  Converting some of the 70 percent unengaged to active regular readers will increase revenues and be well worth your time testing.

Also consider sending on a different day for your inactive group.  Even B2B emails can be very effective being sent on a weekend.  You check your business mail on the weekend, don’t you?  Chances are your business customers do as well.

And remember content and value are important; the content of your email should be valuable to recipient. By segmenting your list, you can send different content to each list.

Make testing an important part of your email marketing plan; you’ll be surprised at the results.

After testing you’ll want to eventually purge the non-responsive email subscribers in your list.  Keeping them there only drives down your analytics and there’s really no reason to keep them at that point.  If someone hasn’t open an email in six months purge them from your list.

Cheers, Chris

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