Retailers shift their ad spending from TV, radio and print ads to digital ads.
That’s because retailers fail to learn how to change that behavior.
Many e-retailers have fallen into the habit of sending a high volume of e-mails to inactive subscribers and few develop strategies to win back dormant consumers, according to a new study of 40 e-retailers.
The study, conducted by e-mail service provider Return Path Inc., found that 29 of the 40 retailers continued to send a high frequency of e-mail throughout a 19-month period to inactive subscribers who were not opening messages.
To conduct the research, Return Path staffers made a single purchase from the online retailers in September of 2008 and also signed up for each retailer’s e-mail program. Researchers returned all the items to the retailers but kept active the e-mail account used for signing up and did not unsubscribe.
Researchers did not open any of the messages that followed. Over the 19-month period, retailers sent an average of 10 e-mails per month to the inactive consumers.
While most companies continued to send e-mail throughout the study, 11 companies did eventually stop, Return Path says.
Best Buy Co., No. 10 in the Internet Retailer Top 500 Guide, and Borders Group Inc., No. 194, both stopped sending messages after one month. However, Return Path says the cessation could have stemmed from a delivery problem, such as e-mails being routed to the junk or spam folder or being blocked by an Internet service provider.
Four companies stopped sending e-mail after receiving no response within 14 to 19 months, while the others stopped between five and 10 months after the purchase.
More commonly, retailers ignored clues that shoppers were not interested. For example, high-end apparel and home goods retailer Neiman Marcus, No. 41 in the Top 500 Guide, sent nearly eight e-mails per week for the first three months, five to six per week for six months, and then increased to one per day again.
Return Path says companies could do a better job of attempting to win back inactive e-mail subscribers. For instance, 12.5% sent one or more e-mails with incentives, such as a discounts or promotions aimed at winning back the e-mail subscriber. One of those five companies ceased to send e-mail messages within the study period, while the other four continued to e-mail despite getting no response.
A total of 14 messages aimed at winning back a shopper were sent by the five companies. Only one of the five companies sent an e-mail asking for permission to continue sending messages and none of the five asked the consumer his e-mail preferences, such as how often he would like to receive an e-mail or the types of messages he would like to receive.
One company sent seven win-back messages over 18 months, each with the same offer. None of the messages designed to win-back shoppers were customized based on the subscriber’s previous purchase, Return Path says.
Of all the companies sending e-mails attempting to win a customer back, Return Path says Bed, Bath & Beyond Inc., No. 154 in the Top 500 Guide, had the most complete strategy. The retailer identified inactive subscribers and decreased the frequency of e-mails to those subscribers over time—from seven e-mails per month and then eventually to less than one per month.
After one year of inactivity, the retailer sent a clear win-back message with a discount offer for an item of the subscriber’s choosing. A week after that message the retailer sent an e-mail specifying a date when it would stop sending e-mail unless it received subscriber permission. When Bed, Bath & Beyond still did not receive a response, it stopped sending e-mails.
Return Path says keeping uninterested consumers on an e-mail list can interfere with a retailer’s ability to optimize e-mail design and content because uninterested recipients dilute e-mail response patterns, skewing metrics and making optimization more difficult.
The vendor says Internet service providers have started to track whether users respond to commercial mail. If a marketer is mailing at a high frequency and receives a disproportionately low response or no response at all over a long period of time, that could harm the marketer’s sender reputation. That, Return Path says, could lead to the company’s mail winding up in the spam folder or having it blocked outright.
Return Path recommends e-mail marketers ask subscribers how often they’d like e-mails, send incentives to shoppers who do not respond, and then develop strategies for what to do when consumers are not responding. This could include sending fewer messages or asking for permission to continue sending messages.