1. Inactive Email Subscribers: Tips for Taming the Beast#SPOPWebinar

2. Speakers Carey Marston SmartPak Email Marketing Manager Cmarston@smartpak.com Loren McDonald Silverpop VP, Industry Relations Twitter: @LorenMcDonald Google+: +LorenMcDonald

3. Agenda Framing the Challenge SmartPak Overview Action Plan Summary/ Q&A

4. Framing Todays Topic

5. Remove your inactives; Send less email! Dont removeyour inactives; Send more email!The Inactives Debate

6. Inactives are about human behavior not deliverability.

7. Goal for this Webinar Get you to think a littledifferently about inactives

8. 1. Reactivate early 2. Automate/Programs3. Focus on mimimization

9. Why Do You Care About Inactives?

10. Inactives Are a HUGE Issue

11. Typical Actives vs. Inactives Ratio

12. Impact of Inactives Lost potential revenue Inefficiencies/Reduced ROI Fuzzy metrics Potential reduced deliverability

13. Retailer X Inactives Challenge450,000 Subscribers 40%-50% Inactive (no opens + clicks for 12 months) 200K-250K non-responders

14. Hypothetical Revenue Loss Actives Inactives # Subscribers 250,000 200,000 Average Revenue Per $0.12 Email Delivered 4 X week X 53 weeks $6.4M ~ 212 emails Potential Lost Revenue $5.1M

15. SmartPak Program Overview

16. About Our Email Program ~1MM emails sent, per month Email Volume Transactional Email generates 34% of all online Promotional & Triggered Email, 11% marketing channel revenue Email, 89% Healthy transactional and triggered email program drives high return Email team comprised of: Email Marketing Manager Email Revenue Transactional Email Designer & Triggered and three businesses to support! Promotional Email, 37% Email, 63% In 2010, launched 11 automated campaigns with Silverpop, growing revenue 40% year-over-year 16

17. SmartPaks Email Program Framework Email Channel Promotions Transactional Lifecycle SmartPaks On-Hold SmartPaks Newsletters Confirmation Welcome Order Confirmation Order Reminder Offers Shipment Abandoned Cart Confirmation SmartPaks SmartPaks On-Hold Confirmation/Welcome Today, 26 transactional Post Purchase and lifecycle emails per Password Review day, and 10+ promotional Recovery emails per month Credit Card Failure SmartPaks Up-sell Notification SmartPaks Cancel Confirmation 17

18. SmartPak: Inactives History Became aware of impact in 2007 Analyzed database = ~50% inactive Tested suppressing inactives = exact same number of opens/clicks

19. SmartPak: Current View Win-back = Revenue opportunity Potential deliverability impact Reach through other channels

20. SmartPak: Current Inactive Definition NoNo Opens 6+ Months Purchases 40%-45% of database

21. Inactives Action Plan

22. Inactives Action Plan Root Causes Define & Minimize Segment Automate Reactivate

23. Why Recipients Go Inactive Never fully engaged - just wanted the incentive Interests / needs have changed Content did not meet expectations Emails are being routed to junk folder You send too often for their taste You send un-personalized, irrelevant emails Long sales/purchase cycle Inability to update email address / change preferences

24. Determine Root Causes Are certain acquisition sources producing a higher rate of inactives? Has increased frequency numbed them? Is your email program stale and boring? Are you attracting the right audience? Are you delivering against expectations? Do you have deliverability issues?

25. Analyze By list source Age on file Customer segment/profile Subscriber survey responses Creative test results Response by message type/frequency changes

26. Action Plan Define & Segment

27. Defining Inactives Sample Parameters Email activity (opens & clicks) Time on list Purchase/Conversion activity Web site/Other channel activity Sales/Purchase cycles/Seasonality Customer value/Ideal profile

28. All Inactives AreNot Created Equal

29. SmartPak: Analysis/Definition

30. Understand Your Inactive Segments More Potential? Less Potential? Past customer Never purchased Organic Opt-in Sweepstakes Recent purchase Long ago purchased High customer value Low customer value Engaged in other No engagement channels anywhere

31. Are inactives worth keeping? Do we treat segments of inactives differently?

32. Predicting Subscriber Value Potential Leading online retailer Suppressing inactive subscribers Hypothesis that high value potential subscribers existed among inactives Leveraged third party data (purchase behavior, demographics, etc.) and advanced modeling to predict Subscriber Value Potential.

33. Approach & Results Segmented inactive Campaign Revenue per subscribers by Value Subscriber Potential and conducted $0.18 reactivation test 8.4x Results: High vs. Low $0.02 segment 1.8x higher Open Rate Low Potential High Potential Segment Segment 8.4x higher Revenue per subscriber

34. Action Plan - Reactivate

35. Typical Reactivation Rate: 1%-2% High Performers: 10%+

36. Re-engagement Series - Incentives

37. Re-engagement Series Results Performs poorly (as expected) 5.8% Open rate 1.8% click through rate 1-2 orders per fiscal quarter Non-responders are removed

38. Tell us what you want

39. LinkedIn: Reduced Frequency

40. SmartPak: Attempt #1We miss hearing from you!As a valued customer and subscriber to our e-newsletters, you are the first tolearn about new products, promotions, sales and healthcareinformation. Dont miss out on all of this valuable insight that comes straightto your email inbox. If you prefer to receive your e-newsletters at a differentemail address, please click here to update your profile.We hate to see you go! But if you choose to no longer receive our e-newsletters, please click here to unsubscribe. We hope to hear from youagain soon.As a thank you for being our valued customer, please use this code (xxxx) toapply free shipping to your next order with us.- Your Friends at SmartPak

41. #2

42. #3

43. SmartPak: Reactivation Metrics Metrics Reactivation Other Emails Bounces 3% - 7% 0.57% Open Rates 3% 18% Reactivated 13,000 so far AOV $111.19 $119.09 Avg Rev/Email $0.06 $0.20

44. Action Plan - Automate

45. Automate: Activate Early Inactives New subscribers dont open/click first XX messages/X weeks Move these early inactives into activation track Send survey, different offers; best of, diff subject lines, testimonials, etc.

46. Sample Month 4 and Month 7 Program Broadcast emails: 3-5 per week No activity for 3 months moved to reactivation track Month 4: 1 email per week UpdateSweepstakes Unique Offer New Brands Preferences Month 5-6: Normal 3-5/week Month 7: 1 email per week Promote other What You Are Unique Offer Survey channels Missing

47. Action Plan Minimize

48. The best reactivation strategy is to minimize inactives to begin with.

49. Opt-in processPreference mgmt. Expectation mgmt. Minimize! Targeted / Relevant Welcome / Content Onboarding

50. Opt-in Source / Process

51. Setting Expectations

52. Welcome / Onboarding

53. Ask for More Information

54. Relevant Content Post PurchaseFollow-UpEmailsSent after1st Supplyorder

55. Crazy Content See Our ModelsNearly Naked in OurNew X-Ray Catalog

56. Footers Make it Obvious Include links to all 3 main options: - Update preferences - Change email address - Unsubscribe

57. Enable Preference Changes Change: - Preferences - Email address - Frequency - Topics - Publications

58. Opt-down alternative to opt out

59. To Remove or Not?

60. NoMaybe Yes

61. Remove, suppress or retain? Send less Treat differently Retain Monitor reactivation Have resources to deal with Deliverability Business decisions / low value Remove subscribers Cost/Resource Savings Make sure they are truly inactive

62. Takeaways / Q & A

63. SmartPak: Some Lessons Learned OK to suppress Most inactives ARE inactive Right definition/approach is key Be careful

64. SmartPak: Whats Next? Early activation/automation Testing Track the life of inactives More behavior-based automation

65. Takeaways Dont ignore inactives be proactive Focus on minimizing Automate reactivation, rather than one-offs Test and Analyze

66. Questions? Carey MarstonCMarston@smartpak.com Loren McDonaldTwitter: @LorenMcDonaldlmcdonald@silverpop.com Google+: Loren McDonald

67. Resources Resource Center White papers Webinars Blogs Case studies Newsletters http://www.silverpop.com/marketing-resources/index.html Many presentations on SlideShare www.slideshare.net/Silverpop

68. Thank you! On Twitter: @Silverpopwww.slideshare.net/silverpop www.silverpop.com