Ever wondered as to why your customer base is slowly decreasing? Are you left wondering as to what you could have done to reduce the percentage of customers who have cancelled either a product or a service? Do you feel unsure as to what you could have said to your customer to keep them engaged, satisfied and valued? If so, read on to take a look at some of the brilliant ways customer engagement can be easily increased through an email campaign to reduce churn.
What are email campaigns?
Cases et al. (2010) suggests email campaigns are used for attracting new customers, persuading a customer to buy again, encouraging customer loyalty and to announce/remind about new products/events.
What is customer engagement?
Customer engagement is defined as the totality of communication a company has with their consumers through different forms of media and marketing channels (Laudon & Traver, 2013).
Did you know?
- 86% of consumers would like to receive promotional emails from companies they do business with at least monthly, and 15% would like to get them daily? (Statista, 2015)
- 78% of consumers have unsubscribed from emails because a brand was sending too many emails? (HubSpot, 2016)
What is churn?
Chaffey (2016) describes the churn rate as a KPI for online presence which states the percentage of subscribers withdrawing or unsubscribing. A fantastic representation of churn is within the mobile phone sector, I’m sure we all know someone who switches from provider to provider? The chart below shows Vodafones contract churn rate from 2014-2017, which on average has a 17% churn rate. Comparatively, O2’s churn rate has remained at 0.9%, the lowest in the UK market (02, 2017) – in which has been achieved through targeting their customers with the right message, in the right place at the right time.
Vodafone Contract Churn (Statista, 2018)
How to calculate your current customer churn rate?
https://aritic.com/blog/aritic-pinpoint/reduce-customer-churn-rate/
How customer engagement can be increased through an email campaign?
Budac (2016) states how an email campaign is a useful tool to complement traditional marketing activities in order to increase customer engagement at a low cost. Sinha (2017) discusses how emails speak for your company, boosting brand loyalty, you just need to do this at the right time.
What are the risks of increasing customer engagement through an email campaign?
- Customers may not be receiving your emails
- Too many emails, may get put into junk, which may encourage them to unsubscribe
- Customers may not wish to be retained
- The impact on your company – long term damage
- Unplanned and indirect email campaigns
- Emails which do not align with the company strategy and values
- Focusing on the value it would add to firm, ignoring the value it creates for customer
- Too many emails with too many options may dispel their inertia
- Customer may start to look elsewhere at competitors if something doesn’t sit right
- Highlighting customers details e.g. peoples excess minutes may prompt them to cancel
- Treating all customers as one segment, not everyone will want to receive the same information
- Misleading information which will lead to customer dissatisfaction
- The email may not engage or add any value to the recipient
Ryan (2017) adds to these points, stating not to clutter emails with images, attachments, PDF’s and videos.
How can I prevent these risks?
French et al. (2012) mention how holding customer-engagement meetings and having a ‘listening center’ are just two of the ways that companies can learn to design and execute effective customer engagement and move you in the right direction. Kunz et al. (2018) states how there is a need to understand under which circumstances customers contribute and engage the best – this could be through the use of Google Analytics. Encourage customers to take part in something, or tell them something exciting! Give the consumer the option as to what they would like to receive, focus on the positives. Customer satisfaction surveys and including a feedback bar are also mentioned in this very useful blog >
https://www.thesunflowerlab.com/blog/6-ways-can-increase-user-engagement-reduce-churn-rate/
Step by Step Guide to avoid these risks
- Send personalized emails to build up relationships
- Segment your customers
- Feel free to send out educational content specific to your industry
- Send friendly reminders
- Send feedback emails
- Congratulate your customers on their achievements
- Highlight offers and use incentives
How to reduce churn and increase customer engagement?
Summary
Kunz et al. (2018) state how if a customer does not perceive any value derived from their engagement with a company, the company risks increasing their churn. Big data analytics has the ability to relate to many variables such as demographics, psychographic and online behaviour. The future of digitization and the breakthroughs in Big Data and AI, arguably could allow companies to see a significant change in their customer engagement through the use of email campaigns. Ryan (2017) mentions the importance of being relevant, interesting and entertaining, whilst having the ability to look, listen and to learn. Being able to engage with your customer is just one aspect, you need to remain flexible, consistent and ready to respond to any changes appropriately.
Additional Material
https://www.campaignmonitor.com/blog/email-marketing/2016/10/10-ways-reduce-churn-email-campaigns/
https://econsultancy.com/training/courses/advanced-email-marketing
https://blog.kissmetrics.com/improve-churn-rate/
https://sleeknote.com/blog/reduce-churn
https://blog.kissmetrics.com/reduce-churn-with-email-campaigns/
https://www.smartinsights.com/traffic-building-strategy/integrated-marketing-communications/17-unbeatable-ideas-reduce-churn-rate/
https://blog.marketo.com/2017/01/3-steps-to-reduce-churn-and-increase-revenue.html
https://blog.intercom.com/churn-retention-and-reengaging-customers/
https://econsultancy.com/training/courses/email-marketing
https://blog.autopilothq.com/customer-retention-email-examples/
https://baremetrics.com/blog/lifecycle-emails
References
Budac, C. (2016) Theoretical approaches on successful email marketing campaigns. Ovidius University Annals: Economic Sciences Series. No 2, pp. 305-311
Cases, A., Fournier, C., Dubois, P. & Tanner, J.F. (2010) Website spill over to email campaigns: The role of privacy, trust and shoppers’ attitudes. Journal of Business Research. Vol 63, No. 9, pp 993-999
Chaffey, D. & Chadwick, F.E. (2016) Digital Marketing Strategy, Implementation and Practice. 6th ed. Harlow: Pearson
French, T., LaBerge, L. & Magill, P. (2012) Fice ‘no regrets’ moves for superior customer engagement. McKinsey & Company. [Online] Available at: https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/five-no-regrets-moves-for-superior-customer-engagement [Accessed 20 March 2018]
Harvard Business Review (2015) the wrong way to reduce churn. Harvard Business Review, Boston. [Online] Available at: http://web.a.ebscohost.com.ezproxy.brighton.ac.uk/ehost/detail/detail?vid=3&sid=7a0343ef-75b0-4313-8785-0dcb7886c5b6%40sessionmgr4006&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl#AN=109338457&db=buh [Available 21 March 2018]
Kerpen, D. (2015) Likeable social media. 2nd ed. Mc Graw Hill: New York
Kunz, W., Aksoy, L., Bart, Y., Heinonen, K., Kabadayi, S., Ordenes, F.V., Sigala, M., Diaz, D. & Theodoulidis, B. (2018) Customer engagement in a big data world. Journal of Services Marketing. Vol 31, Issue 2, pp 169
Laudon, K.C. & Traver, C.G. (2013) E-commerce 2013 Business, Technology and Society. 9th ed. Harlow: Pearson
O2 (2017) Customer led leads strong first half. [Online] Available at: https://news.o2.co.uk/2017/07/27/customer-led-leads-strong-first-half-2017-o2/ [Accessed 20 March 2018]
Ryan, D. (2017) Understanding Digital Marketing: Marketing Strategies for Engaging the Digital Generation. 4th ed. London: Kogan Page
Sinha, S. (2017) Advantages of using email to reduce customer churn rate. [Online] Available at: https://aritic.com/blog/aritic-pinpoint/reduce-customer-churn-rate/ [Accessed 22 March 2018]
Statista (2018) Vodafone contract churn rate in the UK Q1 2014/15 – Q1 2017-2018. [Online] Available at: https://www.statista.com/statistics/685125/vodafone-contract-churn-rate-in-the-uk/ [Accessed 20 March 2018]
Statista (2015) The ultimate list of marketing statistics. [Online] Available at: https://www.hubspot.com/marketing-statistics [Accessed 19 March 2018]
HubSpot (2016) The ultimate list of marketing statistics. [Online] Available at: https://www.hubspot.com/marketing-statistics [Accessed 19 March 2018]
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