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Why Email Recapture Campaigns Are Worth the Effort

By May 29, 2011

iPost recently analyzed the email interaction and purchase behavior of 3.3 million subscribers in our database over an 18-month period, to determine whether recapture campaigns, designed to rekindle inactive subscribers’ interest, were worth a marketer’s effort. The answer was a resounding yes, with recapture campaigns driving customer conversion at more than twice the rate of normal campaigns.

Typically, only 55% of subscribers interact with a brand’s email in a 90-day period. The other 45% are inactive subscribers, who receive the brand’s email but rarely click.

When marketers blast a normal promotional marketing message to their entire list, the number of inactive subscribers responding is quite low, only about 0.2% of the list. Using integrated web analytics tracking, we determined that the average conversion rate of inactive subscribers is about 3%. That is, around 3% of the visits to a brand’s website made by previously inactive email subscribers resulted in a purchase. This is slightly higher than the 2.9% average conversion rate of engaged subscribers.

However, when marketers took the time to craft and send a special recapture message to the inactive segment, the conversion rate jumped to between 6% and 12%. There was still only about 0.2% of the list responding, but now they were two to three times more likely to buy than if they’d received a normal promotion.

This tells us that marketers can generate two to three times the ROI on their email outreach to their inactive subscribers if they make the extra effort to segment their list, and create a special recapture offer or message that targets the inactive segment directly. And customers that buy once are much more likely to buy again, so they stay engaged.

What types of recapture messages work?

1. A single deeply-discounted item with broad appeal. For example, a women’s activewear retailer promoted a popular consumable, socks, with the subject line “Your new favorite socks, 80% off!” The call to action? “For a limited time, get our best-selling workout socks for $1.99 a pair, or three pairs for $4.99.”

2. Large discounts (40% or more) on the order total, optionally with a dollar limit on the discount. A retailer for car restoration hobbyists used the subject line “Get your restoration project going with 40% off,” paired with the call to action “Get 40% off any order of $100 or more (sale items excluded)” in the body copy.

3. Free trial-size products. A cosmetics retailer appealed to high-value customers with the subject line” Try our latest rejuvenator, free!” The call to action was “Click to receive a trial size of our latest skin rejuvenator, absolutely free!”

Keep in mind that these recapture offers are only targeting the inactive part of your list, so net margin isn’t so much of a concern. The goal with recapture campaigns is to reactivate lapsed customers and raise their customer lifetime value, not generate a lot of up-front revenue.

Steve Webster is chief strategy officer and cofounder of ESP iPost.