The Biggest Email Marketing Drag: Is Your Email Retention Rate Too Low?

How to improve email retention rates by lowering unsubscribe rates

No matter how well you’re doing, you can always do better. So is your retention rate too low? Yes! If it’s not 100% (it never is) then your email retention rate could improve.

To determine your email retention rate, use this formula:

(# of subscribers – bounces – unsubscribes)/# of subscribers

Let me tell you a little story about a former client.

This publisher of a small group of B2C print newsletters and other related information products decided to get serious about her email newsletter marketing efforts. She had a free, opt-in, monthly email newsletter on the same topic as her print newsletters, but had never put much effort into it.

She was serious about sending promotional email to the email newsletter list, and did so several times per month with some success. Her email newsletter annual retention rate was about 48 percent, with more than 90 percent of the unsubscribe requests coming from the promotional emails.

After we worked together to study a number of other publishers in her niche with successful free (or controlled circulation) email newsletter marketing programs, she came to a number of conclusions:

• First, she needed to dramatically improve the quality of the editorial in her email newsletter and give her audience a reason to read them. To this end, she hired a new email newsletter editor with news experience in her market.

• Next, she noted that successful email newsletters were weekly and often daily. She decided that daily was the best option, as she could offer breaking news to drive her email newsletter content.

• Finally she noted that most of the successful email newsletter marketing programs she studied limited the number of promotional emails to less than half the frequency of the editorially-driven email newsletters. She decided to limit the number of promotional emails to two per week, meaning that five out of seven emails sent would be primarily editorial in nature.

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The revenue she generates from emails is now 17 percent of her revenues—an increase of more than 900 percent year over year. She also maintained steady growth in her other direct marketing sources. Her email newsletter retention rate is now averaging 70 to 75 percent, and increasing slowly as she fine-tunes the email newsletter content based on reader feedback. Her email newsletter marketing database has tripled.

What you should take from this:

• Successful email marketing is about getting qualified, opt-in email addresses and then getting your email opened and read on an ongoing basis.

• An email newsletter relationship that’s only a steady stream of ads won’t work any better than a magazine with no editorial content and only ads.

Further, Mequoda research shows that readers will bond with the author of a daily email newsletter in much the same way that they will bond with the author of a daily newspaper column. This is a very powerful branded content relationship.

Lowering your unsubscribe rate to increase retention

The unsubscribe rate on email has been decreasing for the last few years, which is a positive sign to both B2B and B2C companies. Audiences are clearly accepting of the information they receive via email and wish to continue receiving it. They’re also more choosey with what they subscribe to because they know they can also receive it on Facebook or Twitter, although neither of those two mediums gets every article to the subscriber.

Initial emails have historically had higher unsubscribe rates than ongoing campaigns. This isn’t surprising to see, especially when it comes to content-based businesses operating a content marketing model. Often times, recipients will register for a free report or a coupon, and after they receive the content they want, they opt out of the email list.

Promotional emails have always had the highest unsubscribe rates.

Here are a few simple tips to fight back against unsubscribes:

• Segment your lists so that people can get less email if they want and opt-out of promotional mailings.
• Include a featured product in all of your emails so you can still drive revenue through editorial emails.
• Deliver excellent content, stuff you’d want and need to read.
• Clean your lists often of email addresses with consistently hard bounces.
• Test out different templates, and brighten and bold your headlines.
• Improve subject lines so that subscribers always feel like they need to open them.
• Always deliver one quick, great take-away so the subscriber feels you’re worth one more day in their inbox.
• Talk to them directly, ask them what they want from you (and look at your email stats too!)

Your turn – what have you done to decrease bounces and unsubscribes and increase email retention rates?

This article was originally published in 2012 and has been updated.