Resources Hub » Blog » How and Why to Improve Email List Retention Rates

When it comes to marketing, we’re always looking for newer, better, faster, more creative and increasingly efficient. But when it comes to customers, maybe we shouldn’t play by the same rules. In fact, the key to increase in revenue and consumer engagement may not be found in the usual places you’ve been looking, but don’t worry, it’s closer than you think.

The key to business growth and achieving your company goals is investing in your existing customers.

Customer retention is any measure taken to encourage a customer to return to your business. In these days when every move is a make-it-or-break-it for brand loyalty, it’s important to not just think about customer retention, but to heavily incorporate every aspect of it—the who, what, when, where, and why—into your marketing strategy.

We’re going to cover all of this, but first, how do you calculate your email list retention rate?

Calculating your email list’s retention rate

Remember, we’re measuring the customers who are still subscribed after a specific amount of time. So to calculate this, we’ll take the total number of subscribers, subtract emails that bounced and people who unsubscribed, and divide it by the same total number of subscribers.

Retention rate = (Total subscribers – bounces – unsubscribes)
Total subscribers

There’s no perfect number to aim for, as this depends on your industry and specific business goals. Once you begin measuring this, you’re looking for benchmarks that indicate improvement over time as a response to your increased retention efforts.

Why you should care about customer retention

Maybe you’ve been hustling to expose new customers to your brand and hoping your cold calls will end in a business deal.

While these methods aren’t throwaways, forgetting about customer retention is one of the biggest mistakes any company can make. But, when executed in ways that communicate appreciation and value, customer retention tactics can increase revenue, brand awareness, and expand your reach.

This is because:

Why healthy lists matter

In email marketing, a “good reputation” is more than just a company you love and trust. It’s actually a score you can calculate based on the deliverability of your emails and whether or not your subscribers are opening them. The more of your messages that end up in spam or the trash, the lower your sending reputation will be.

Who your customers are, and why they’re leaving

Once you start keeping track of your customer retention rate, it’s tempting to overload your subscribers with perks and reasons to stay. However, this isn’t going to work unless you stop to consider the difference between the content they’re expecting and the content you’re sending. Why are people unsubscribing?

Before you can answer that question, you need to know who you’re sending to—is it an inbox or a person?

The need-to-know about your audience:

  • Who are they and where will they be when receiving your email?
  • What do they care about? What are their goals?
  • What problems are they facing? How can you help?

Knowing exactly who your customers are allows you to bridge the gap between why they subscribed to your emails and how you can better serve them through your content.

Many companies send what we like to call “batch-and-blast” emails, which means they send the same singular message to every subscriber on their list, regardless of demographic.

While this is a normal line of thinking, especially for email marketing beginners, the real magic of customer retention happens when you create content especially for a specific group to keep them coming back. Think about why they loved your brand in the first place and what it will take to encourage them to return.

How to connect with your people

Retention tactics are a lot easier to brainstorm when we think about them in terms of how you’d treat customers in your very own brick and mortar store. If a customer you recognize is coming through the door, you’d probably:

  • Greet them by name. “Hey, Emily! Welcome back.”
  • Recall their preferences. “Guess what? We have those shoes you wanted in your size!”
  • Remember personal details. “Don’t you have a birthday coming up?”

And when we take these very human interactions and responses and apply them to our email marketing strategies, we just need to think about:

What to send

The most important thing to consider when deciding what to send to your email subscribers is relevance. What are your customers thinking about today, and how can your messaging meet them in this line of thought?

Establishing relevance happens at the intersection of a customer’s needs and your business. It’s kind of like your business is the water station during a 5K race on a hot summer day. You want to position yourself in a way that they’ll be happy to see you, not wondering why you’re there. Alternatively, you wouldn’t want to be waiting for your 5K runner with hot chocolate on a hot summer day. While this example may seem extreme, that’s what an irrelevant email with bad timing can feel like. Postmates does a great job of a thank-you email with enticing imagery:

Where to send it

To avoid this, you first need to know where you’re sending an email, which group you’re sending it to. Segmentation, one of our top-rated features, allows businesses to divide their subscriber list into groups based on age, location, interest, or any other piece of information they’ve gathered through their opt-in form.

Once you’ve created segments and identified who you want to send to, it’s time to determine what content you’ll be sending. Because you’re only sending to part of your list, and to a segment you know a few things about, it’s the perfect opportunity to use personalization.

Described simply, personalization means to prove you’ve been paying attention to your customers by creating content specifically for them. 74% of marketers say targeted personalization increases customer engagement, and there’s a good chance these statistics are higher when we’re just considering existing customers.

Personalization is one of the strongest tools for customer retention because it’s the one that is closest to a human interaction. Who doesn’t love hearing their name or, if we’re being honest, talking about ourselves? This tactic taps into one of our most innate human desires—to be seen and understood—and being able to do that as a business is an invaluable retention strategy.

If you want to take personalization one step further, dynamic content is a feature that allows you to conditionally display visuals and text for each segment within the same email. For example, you could build out one general email for all of your subscribers, but include location or gender-specific ads for chosen segments within the original email copy.

When to send it

The next thing to consider when creating a strategy with the goals of retaining customers and remaining relevant is timing.

The question isn’t just “When should we be sending emails?” but also “At what points in the customer journey should we be reaching out?”. This means anticipating your customer’s needs, from what they need to make an initial purchase decision to what it takes to get them to come back and make another business decision.

By mapping your customer’s journey, you can determine the best times to communicate—maybe sending reminder, thank-you, or birthday messages, and then, you can automate them.

Automation is a great tool for keeping in touch with your contacts with little-to-no added effort. By initially mapping your customer’s journey and creating emails that will intersect them at each step, you can then scale your efforts, maximizing your ROI and efficiency.

Post-purchase follow-up

One of the best things you can do following a customer’s first purchase is to follow-up with them. Did they like the product? Do they have any feedback? Would they be willing to refer a friend? Netflix sends a survey to their customers:

And then down the road, you can check in periodically, letting them know about promotions, new products, and special insider information for existing customers. Basically, you want to continue to positively reinforce them as much as possible. Tictail gives an incentive for referring a friend:


Birthday emails

While it may seem like an afterthought at first, birthday emails are actually one of the strongest tools in email. In fact, they boast a 481% higher transaction rate than promotional emails, which is obviously something worth paying attention to. Birthday emails do a few things for your client relationships—they keep you human, provide a dose of positive reinforcement, and remind your customers that you have their best interest in mind. See how Nike does birthday emails:

Wrap up

There’s no perfect formula for maintaining a healthy email list retention rate, but it’s definitely a worthy endeavor. Incorporating these tactics into your email marketing strategy will not only encourage your customers to remain informed but also strengthen your relationships and prove you’re pretty fun to be around.

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This blog provides general information and discussion about email marketing and related subjects. The content provided in this blog ("Content”), should not be construed as and is not intended to constitute financial, legal or tax advice. You should seek the advice of professionals prior to acting upon any information contained in the Content. All Content is provided strictly “as is” and we make no warranty or representation of any kind regarding the Content.
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