My company has a ton of unsubscribes, stemming from 8 years of international emailing, but I don’t think it is a big deal. According to the The Radacati Group, there are 1.4 billion email addresses in the world (with that number expected to increase to 1.9 billion by 2013- yeah, email is dying). If these numbers are correct, only .02% of email addresses have unsubscribed from us. I’m sure we’re going to do our damnedest to get that number to .03%.
Unsubscribed email addresses are not necessarily bad: It’s simply someone telling you not to waste your time and money on marketing your product/service/donation asks through email to them anymore (a spam complaint is an entirely different story). Unsubscribes become a problem in an environment where people may be interested in your company or product, but find the emails they are receiving worthless or too frequent (but that is for all other email except mine, of course).
When this happens, valid prospects and customers that could be worth thousands of dollars in future revenue simply disappear because they get tired of the constant emails, never to return unless they notice they aren’t receiving your emails anymore and re-subscribe.
With the economy sucking marketing budgets dry in the past, many companies have started to rely on the web and email as a main form of communication with prospects and customers. Great for the email industry, not so great for deliverability, spam complaints, and the user. The past year has shown the importance of good data processes and structure and relevant messaging; email metrics increase when you send relevant messages (GASP!). The problem is balancing this messaging with corporate pressures to blast the entire email base for every marketing offer.
For some email marketers, the argument that open and clickthrough rates are dropping doesn’t cut the mustard with their marketing organizations. Many marketing organizations are judged on total leads produced. This makes sense: In the company cow, marketing produces the milk for sales to process. For that, they need leads. In a down economy where revenues sink and margins shrink, a sales team needs more leads to make calls as a prospect’s purchase time increases or disappears. Everyone says they want quality (which they do), but they also want quantity. These two very rarely coexist. Why? Messaging and segmentation takes time (quality), and with smaller teams and budgets, time is a commodity that is difficult to come by. In contrast, large blasts are easy and produce (quantity).
To review: Marketing budgets are smaller, revenues suck, and email is cheap. What to do? Email everyone in the database.
A normal email marketing manager doesn’t want to be responsible for bringing the company down, and most of the time doesn’t have the authority to say “No” to large sends. It comes down to metrics and data to make the argument for segmentation and smaller blasts. “Stay the course,” email marketing managers say. “Look at our dropping open and clickthrough rates.”
The problem with falling open and clickthrough rates is that they have no real meaning to VPs and C-Levels when revenues are falling faster. Large email blasts, no matter how inefficient, produce a larger number of leads more quickly than segmented emails. If your marketing department is judged on those leads, then good luck explaining that a 0.5% drop in clickthrough rates and a .05% increase in unsubscribe rates isn’t an acceptable tradeoff, unless you have some revenue numbers to back them up.
There is the kicker.
What is the opportunity cost of an unsubscribe for your company, both in present and future value? In 2009, that cost for my company is $172. That figure doesn’t include the future maintenance and support renewals those unsubscribes would potentially purchase over their lifetime- we’re not quite there yet. This isn’t to say that those who unsubscribed will never become customers, but they won’t be reached by email, the cheapest and most cost-efficient way to reach contacts.
You reach the opportunity cost of an unsubscribe by knowing how much a lead is worth and how many leads are generated from email. Once you know this information, it is then possible to know how much each open, click, and unsubscribe is worth, and then you can put the unsubscribe smack down on the list killers in your company.
