E-mail: 5 Ways to Build Lifetime Customer Relationships
Determine the Value of Your Valid E-mails
Rewarding employees for capturing customer e-mail addresses is a hard sell to management unless you know what an e-mail address in your database is worth. What is it worth? The value is based on the profits that you can make from using the address to boost retention and increase sales. You can use your database to determine that value. Make up a lifetime value chart, which might look something like the sample displayed at the bottom of the page.
This chart tracks the lifetime of 1 million specific subscribers during their three years with your company. It cost you $17 to acquire each subscriber. There are other subscribers or customers who arrived before or came since, but they do not show up on this chart. As you can see, only half of the subscribers are still reachable in the third year—and many of them never bought anything. But from the ones who did, there were significant profits.
The lifetime value chart tells you that each opt-in, permission-based e-mail address is worth about $85, which means that your database is worth about $85 million. It will be worth that, however, only if you use it to contact your customers and build long-term profitable relationships. But where to start?
Create Dynamic Transaction E-mails
A transaction e-mail (e.g., "Your order was just shipped") is the ideal conversational message to build a relationship with your customers. These e-mails have very high open rates (often as high as 90 percent) compared with promotional e-mails (which are hovering at 15 percent). Since they are opened and read, these messages are the place to put suggestions for future purchases—suggestions that are related to the particular customer and to what she has previously bought.
In many companies, transaction e-mails are sent from the shipping department, which is not equipped to use HTML or to reply to customer e-mails. Get busy. Make sure that all your transactional e-mails go through your e-mail marketing team or your e-mail service provider before they are dispatched, so they can be in HTML and contain relevant, personalized offers and content.