by Kirill Popov and Stefan Pollard

Is more better? E-mailing your subscriber base more frequently can help boost sales, revenue, customer loyalty, and word-of-mouth exposure. Or, it could cost money and customers, as we outlined in part one, as well as damage e-mail deliverability. The outcome depends on how well you manage increased frequency and both its positive and negative consequences.

Four key drivers can turn your e-mail financials from black to red if you increase frequency without adequately planning for:

• Additional lost subscribers
• Cost to reacquire these customers
• Potential lost revenue
• Higher spam complaint rate that triggers ISP blocks

In this column, we’ll provide a basic formula for your own frequency calculations, delve deeper into the impact on deliverability, and explore alternatives to simply sending to your entire list more often.

Marketers, Start Your Calculators
If you’ve already accelerated your e-mail program’s sending frequency,
use this set of equations to determine whether the increase helps or
harms your bottom line:

1. Determine the "before" and "after" frequency (how many
   individual messages or campaigns you send per month to your entire
   list, excluding any targeted or transactional messages, and the number
   you increase to or plan to send on the new schedule).
2. Calculate the following costs and figures for a month of messages:
   • Lost subscribers (average, using results from a month of
     messages): Hard bounces + addresses associated with spam complaints +
     unsubscribes = lost subscribers
   • Message distribution costs: (CPM x number of subscribers x number
     of messages) + accreditation fees + deliverability monitoring +
     labor/agency/ESP fees = message distribution costs
   • reative costs: Labor/agency fees + image purchase = creative costs
   • Reacquisition costs: Your cost to acquire a prospective customer’s e-mail address
   • Potential lost revenue: Use average annual revenue per
     subscriber/customer. If you don’t know this figure, divide your e-mail
     program’s annualized revenues by the average number of subscribers for
     the year. Because the people who unsubscribe or file a spam complaint
     were likely your least valuable customers, you should probably reduce
     the annual revenue lost by some factor, such as 50 percent.

3. Plug those numbers into this equation: Annual distribution costs +
   annual creative costs + (annual lost subscribers x reacquisition costs)
   + (annual lost subscribers x potential lost revenue) = annual
   lost/gained revenues

Perhaps You Should Send More Often
So far, we’ve assumed increasing e-mail frequency could be a negative
if you send more often than subscribers expect or want. But if you mail
only a few times per month, you could be leaving money on the table. In
that case, sending a few more e-mail messages could actually do more
good than harm.

Use these factors to forecast the impact of sending more frequently:

• Bounces. Increased frequency should have only a modest impact
  on bounces. It’s driven most by timing: when e-mail is sent during the
  month. So assume an increase in monthly bounces of perhaps 10 to 20
  percent.
• Unsubscribes. Our analysis shows mailing more often doesn’t
  necessarily increase the percentage of unsubscribes resulting from each
  mailing. Instead, you’d see the impact in the cumulative effect over
  several mailings. For example, doubling mailings would double the
  number of unsubscribes per month.
• Spam complaints. Increased mailings drive a growth in spam
  complaints per message or campaign. We don’t have an exact ratio, but
  it’s reasonable to expect your spam complaint rate will double if you
  double frequency.

The Deliverability Effect
In addition to the obvious effect on the bottom line, overmailing can slap down an e-mail deliverability rate.

One of the biggest complaints e-mail recipients had during the
holiday 2005 shopping season was receiving much more e-mail than they
expected when they opted in.

What do people do with all that unwanted e-mail? They either deleted
it (68 percent) or unsubscribed (30 percent), according to a Return
Path survey. A full third of respondents said in addition to other
steps, they reported the excess as spam. This is where real
deliverability danger lies.

As noted above, you can expect more spam complaints when you
increase frequency. This higher volume could be the tipping point that
triggers ISP blocks on your sending IP and kicks you off ISP whitelists
or third-party accreditation or reputation lists.

Further, you’re more likely to be reported as a spammer on
collaborative peer-to-peer antispam lists, such as Cloudmark. That can
get you on blacklists, which further reduces deliverability.

Finally, unhappy respondents who don’t actually report you to their
ISPs will set blocks or filters within their own e-mail programs to
make you go away.

Relevance Is Key
The mistake most marketers make when they beef up their frequency is
they just mail more offers to all the same people on their list.

Instead, start at the beginning of the relationship with your
customer or subscriber and use a set of best practices, such as these:

• Optimize the opt-in page to collect relevant data in addition
  to name and address: product interests, gender, how often they want to
  receive e-mail, and so forth. To avoid overwhelming new customer with
  data demands right at opt-in, add an option to fill out a customer
  profile in an e-mailed confirmation message or in a follow-up to a
  product purchase.
• Segment mailing lists into relevant categories.
• Improve creative to make the content more attractive and visible,
  both in the preview pane and in the open view with images blocked.
• Combine lifecycle messaging, which triggers messages at appropriate
  points in the customer’s relationship with you, with dynamic content
  that reflects a recipient’s previous purchases, contents, or interests.
• Identify segments according to responsiveness. Your most responsive
  segment will probably respond favorably to increased frequency, while
  the fatigued segment will most likely generate more complaints.
• Step up monitoring of spam complaints, blocks, and blacklisting. Address any issues immediately.

These best practices can help you move your e-mail program to the
next level, making you more valuable to your subscribers and improving
your ROI without damaging your list integrity or customer
relationships.

Source: ClickZ