What Happens When You Neglect Your Communication Funnel

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The Illogical World Of Retail Email Communications: What Happens When You Neglect Your Communication Funnel

By Ed Higdon. Posted in Action

November 24, 2015

Imagine, for a moment, that your retail organization gets an eight-cent return on every email you send. If you want to make more money on those emails, what do you do? If you’re like most people you’d probably say, “Send more emails!” On the surface this is a logical sentiment, but in order for emails to lift sales, messages must be approached strategically, through the apex of your communication funnel. When you take an approach that ignores your strategic funnel, you run the risk of alienating, and ultimately losing, your best customers.

The Illogical Spray-And Pray Approach

Segmentation matters when it comes to email marketing. When you send well-targeted, highly relevant content to different groups of customers, your open rates will increase. In most cases, the most engaged customers are those enrolled in a loyalty rewards program. Experian reports that those customers have a 40 percent higher email open rate than customers who are not enrolled.

Most marketers know that engaged customers like these are more likely to open an email, so they fall into the trap of sending those customers even more emails. Over-engaging with customers who are already fans and aren’t likely to leave you for another store makes little sense. Even so, 80 percent of email marketers said they send the same content to every subscriber on their email list. That means that rewards program members who know your store inside and out receive the same communications as someone who just opted into your list.

Conventional reasoning would tell us that there is no harm in sending everyone the same email. After all, it costs nothing to send out one blast and you know that engaged customers can just delete irrelevant messages. However, ineffective emails do virtually nothing to expand your customer base, reach new people, or lift sales.

Please “Unsubscribe” to Over-Communication

Your engaged customers want targeted messaging. If you annoy them with too many irrelevant emails they will unsubscribe. Nearly 70 percent of email users in the U.S. have reported unsubscribing from an email list they opted into because the company sent too many emails, and that does not account for unengaged subscribers who don’t remove themselves from the list. Some people simply mark emails as spam (which impacts your ability to get through to other inboxes), and some people use a secondary email account to filter out “junk.” They don’t give their primary email address to marketers in order to keep their inbox clean.

The Negative Frequency Correlation

So what does all of this mean? MailChimp conducted a study on the correlation between customer engagement and communication frequency and discovered as communication frequency increased customer engagement decreased.

The study determined that click rates, which is a metric of long-term conversion, vary significantly based upon the customer. Rather than blasting emails at everyone, the key to making emails impactful is to understand user behavior and tailor communications to specific audiences.

Therefore, you must communicate with a strategy, rather than just blanketing your email list every time an item goes on sale. A traditional communication funnel moves customers through a process of:

  • Attraction
  • Engagement
  • Nurturing
  • Invitation
  • Conversion
Then you lather, rinse and repeat. In order to work the funnel properly, you have to know where customers are in their buying journey, and you’ve got to know just where your relationship stands with them. Ignoring this process can lead to sending irrelevant—and therefore unread—messages, possibly leading to an eventual unsubscribe.

Email outreach is critical to the process of engaging customers, but it’s just one piece of that process. Retailers should use email to stay connected with engaged customers and to build stronger relationships with new customers, but the best way to do that is to leverage analytics to maximize your entire communication funnel. Only through the strategic use of data can you make decisions in each step of the engagement process that will drive engagement and, ultimately, sales.