5 Steps to Measure the Impact of Customer Lifecycle Marketing

You are almost certainly losing money based on the emails you don’t send to your current customers. For some businesses, you are losing a lot of money.

From what I’ve seen, companies tend to fall into one of three buckets regarding customer lifecycle marketing emails:

  1. They don’t send them because they think customers will find them annoying.
  2. They don’t send them because they don’t think the value of setting them up will outweigh the cost in terms of time.
  3. They send too many and those have limited impact on customers.

These aren’t acceptable buckets to fall in.  In each of these cases, they can know the answer by testing and then measuring what happens.

 

Here are 5 steps to help you get started:

Step 1: Implement something.

If you are reading this and haven’t put anything in place, stop immediately and go identify a set of customers and send them an email.  One starting point is everyone who used to be very active but hasn’t been recently.   If you’re worried about putting too much time into, focus on the simplest group possible and don’t worry about automating it.

Step 2: Pick a group as a baseline

In short, you want a group who lets you know what would happen if you didn’t implement the email you are planning on sending. For many of us, a great starting point is to just use what’s happened historically as this benchmark.

Over time, you probably want to consider holding out a set of customers as a control group who joined at the same time, from the same channels, etc. It’s not worth worrying about perfecting this at first.

Step 3: Measure Quantitatively

Once you’ve been sending emails, it’s time to see what’s happened. Two key things here:

  • Focus on multiple metrics – sales, profit, site visits, unsubscribes, purchase size, etc. Even if a customer doesn’t change their buying or usage patterns immediately, you want to see if there are related positive (or negative) effects.
  • Focus on impact over time, not just what’s immediate.  Because it’s easier to track, too many companies focus just on the impact they see from clickthroughs, but you really care about what happens over the next 7, 14 or even 30 days.

The simplest way to do each of these is to look at average performance of customers at different times frames – 24 hours after email, 3 days, 7 days, 14 days, 30 days – of both the customers who received the email and those who didn’t.  Over time, you’ll want to get more accurate and detailed about this, but this is a good starting point that will likely get you 80% of the right answer.

Step 4: Measure Qualitatively

It’s also worth identifying a random subset of customers and having quick conversations with them. The goal is to better understand the customer impact but also to generate new hypotheses about emails or approaches they might find helpful.  Something to keep in mind is that what people say doesn’t always match with what they do.  When Google initially tested many of their ads, they found that people reported not liking them when explicitly asked, but they also reported being happier on pages with ads than those without ads.

A final note – we have seen that offering a small token of appreciation (gift certificate, shirt, etc) helps engage people more quickly than otherwise.  Depends on your business, but if you’re struggling with low response rates, might be worth considering.

Step 5: Automate

If it worked, go ahead and implement it.  If you’re unsure, increase the size of the group or modify the email to try to create a test that you’ll be more certain about.

Summary

The main barrier is sending the first email. Measurement is a great way to figure out what’s working, but if you take it too far, it too can become a barrier to getting started. Good enough actually does tend to be a great place to start – once you know how your first efforts went, you can focus on optimization later.

 

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