Your Newsletters Aren’t That Good: Building an Email Funnel that Drives Growth

When people talk about email marketing, most of us think of the ton of emails we get everyday from lists we aren’t quite sure we signed up for. It’s one step better than the unlabeled envelopes you get in the mail addressed to “Current Resident” – but not by that much.

Now – newsletters work and there are many great newsletters that customers love getting, but they’re just one part of the marketing puzzle.  However, beyond just a daily or weekly blast to a bunch of emails, email marketing is about people – when and why they get your emails and how you build that relationship over time.

By thinking about email marketing as a funnel, it becomes much more personal and much more effective at driving growth. Newsletters aren’t good enough to tackle the whole funnel.

email funnel

The Email Marketing Funnel

Elias St. Elmo Lewis, in addition to having one of those names that you can’t imagine anyone giving a child after 1950, pioneered the idea of AIDA in advertising to describe the order of stages a person goes through before buying:

  1. A for Attention or Awareness: get the potential customer’s attention
  2. I for Interest: Convert that attention into active interest in learning more
  3. D for Desire: Turn the interest into a real desire for the product
  4. A for Action: The purchase itself or the act of telling someone else.

The digital world has turned advertising and marketing on its head, but the core idea of AIDA remains the same for Ecommerce as it was for advertising in the 1920’s: you have to convert attention (now site traffic) into Action (now an online purchase) – and take people through each step in the middle.

The problem is too many Ecommerce stores skip the middle steps and hope for the best. Studies estimate that only ~2.5% of site visitors buy.  But if only 1 in 40 people are buying, what happens to the other 39? And why didn’t they buy? Where the just not interested now or not interested ever?  Did they just want to look around more? Wait until next season?

It’s reminiscent of the Underpants Gnomes profit plan in a particularly memorable episode of South Park. The gnomes’ plan went like this:

  • Phase 1: Steal underpants.
  • Phase 2: ?
  • Phase 3: Profit.

It isn’t enough to leave a ? mark between Awareness and Action. Email Marketing is what lets Ecommerce stores bridge the gap between anonymous traffic and loyal fans. 

Step 1: Turn Traffic into People

The email funnel begins with turning more of your anonymous traffic into people that you have a relationship with.  The mechanism is simple – you ask them to sign-up for your mailing list, and if they want to, they do.  From that starting point, you have the opportunity to send them high quality, valuable emails … and they have the opportunity to buy, tell their friends, or unsubscribe.

So – one of the number one ways to grow an ecommerce store is to convert more of that traffic into people by proactively asking your visitors to subscribe, you’ll massively increase your sign-ups.

There are a few ways to do this (ranked from the option that will give you the least to most emails):

  • A classic newsletter sign-up at the bottom of the page.
  • Sign-up Bars: The sign-up bar is a bar at the top. Hellobar is a common tool to use for this.
  • Prominent Sign-up forms: Alternatively, you can move your newsletter sign-up to the top of your page, like on Klaviyo’s blog.
  • Slide-Outs: The more friendly cousin of the pop-up, the slide-out is an email collection form that comes out at the bottom of the screen. It still forces a decision, but it doesn’t block any content on screen.  The LIFX blog has a great example of this.
  • Pop-ups: A pop-up that blacks out the screen when a new visitor arrives and asks them to sign-up for your newsletter. It often includes a discount or coupon to reward customers who sign-up and to encourage them to go ahead and purchase. Bonobos is an example of this.
  • An Email Gate:Finally, some sites block access to their site unless you sign-up.  Frank and Oak is an example of a store who uses this approach.

This all said – even if the email gate gives you the most emails, it’s also the most annoying to your customers.  Other approaches (a slide out, a prominent newsletter box, a pop-up that gives something to sign-ups) are much less disruptive to people and also increase sign-ups.

Step 2: Turn People into Customers

Once people are more than just an extra bump in Google Analytics, there are three key opportunities to guide them through the funnel:

  • When they first subscribe: This is when they are most excited. Using a welcome flow takes advantage of this excitement (which the data shows drives 5X higher click through rates) and converts people into customers.
  • Ongoing Nurturing: Lead nurturing has long been a B2B marketing concept, but it equally applies to Ecommerce. Newsletters maintain interest, highlight what you’re up to, and keep you top of mind.
  • Convert: Once you pick up on interest (someone visits your store frequently, abandons a cart, or starts clicking on more emails), email helps with the final step too – getting someone to make the final purchase.

In this phase, you have an implicit contract with someone – they’ve signed up for your newsletter and have put faith in you to make it worthwhile.  Your goal is to build a deeper relationship.

email funnel (1)

Step 3: Turn Customers into Fans

That first purchase is the second moment of great excitement – someone has taken action and is excited to get products from you!

This is the point where you can leverage that excitement to turn your email funnel into a virtuous cycle that keeps bringing in new people at the top of the funnel.

A few tactics in this phase:

  • Product Reviews to give social proof on your website.
  • Cross-selling products that you know someone might like now that you know more about them.
  • Loyalty programs to give people incentives to return.
  • Asking for friend referrals or social outreach to translate their excitement into new customers.
  • Saying Thank You to VIP customers who return.

A study by Bain and Company showed that returning customer spent 67% more than new customers and were far more likely to recommend friends. The average online apparel purchaser in the study recommended 3 friends after their first purchase – and if that purchaser kept returning, they’d recommend an average of 10 friends over time.

In short – the email marketing funnel doesn’t end with the first purchase.  The true funnel extends throughout the full customer lifecycle, and feeds right back into the beginning of the funnel.

Step 4: Repeat It All

Once you’ve got the funnel working, it’s like a snowball rolling down a hill. Fans come back and buy, and they tell their friends….and then email turns those friends into fans.

Newsletters, long the mainstay of email marketing, are a tactic within the email marketing funnel – but using email well means reaching customers in that funnel at the right time with the right message to keep building that relationship.

 

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