Many companies are focused on growing their e-mail list, and rightfully so.  But if you could improve the return on investment of your e-mail marketing program by pruning your list, would you?

First, I’d like to clarify that I’m not referring to “cleansing” bounces or unsubscribes from your list.  Your e-mail vendor/software should do that for you.  I’m saying that a large percentage of subscribers in your list don’t open or click any of your e-mail campaigns.  So is it worth keeping them in your list?

Many companies don’t effectively track statistics of their e-mail lists, so you may be surprised to find out how few members of your e-mail list actually take action on messages you send to them.  According to MailChimp, e-mail open rates average at about 25%.  But that data is only based on a single campaign.  How do you know what percent of your list takes action over time?

I’ve been a MailChimp customer now for a number of months and am increasingly impressed with the analytical information they provide on e-mail lists and campaigns.

MailChimp uses “Member Ratings” to rate each subscriber in your mailing list. The 5-star rating system uses a rating for “member” (subscriber) activity and is a quick visual measure of how engaged your subscribers are.

• 1 Star- negative rating, this person has unsubscribe and re-subscribed, or soft bounced in the past
• 2 Star- no activity, never opened or clicked, most likely a new member
• 3 Star- this recipient has started opening or clicking your campaigns, limited activity
• 4 Star- this recipient has started opening or clicking your campaigns, a little more activity
• 5 Star- this recipient has started opening or clicking your campaigns, lots of activity

Why would you want to remove subscribers from your list?

If you’re working with a vendor to send email, you must limit abuse complaints to an extremely low number.  A client of mine was sending e-mail to a list they had been building since the late ’90s, and when we brought the campaigns to MailChimp there were a relatively high number of spam abuse complaints when we sent the mailings.  We needed to reduce the abuse complaints or risk MailChimp pulling the plug on our e-mail program.

Pruning also lowers the cost of mailing.  If you aren’t sending to those that don’t open or click, your list size is smaller and you pay for a smaller subscription plan (or a per e-mail fee, whichever plan you have).  In turn, you’ll generate a better return on your investment.

The pruning process

Here’s how we went about pruning our list, how we completely eliminated abuse complaints and improved the performance of our client’s e-mail campaigns.

Create a “best customer” segment
Because your marketing department might be uneasy (to say the least) about deleting names from your list, start by creating an audience segment in MailChimp.  When you’re ready to send your next campaign, add all subscribers with a 3-star and above rating to a new audience segment.  By doing this, you’ll be sending the campaign to only customers that have opened or clicked prior campaigns.

You’ll be amazed — and perhaps alarmed — that you’ll reduce your list size dramatically by doing this.  In some cases, your new audience segment might be 20-40% the size of your complete list.  Send a few campaigns to this audience segment and measure the results.  For comparison purposes, you may also want to create an audience segment of only 2-star subscribers so you can compare results.

Caveat: The 2-star subscriber
The 2-star subscriber must be treated with care.  While some subscribers with a 2-star rating might have never opened an e-mail from you in years, there also may be 2-star subscribers in your list that are brand new subscribers who have only received one or two mailings.

To solve this issue, create a new list and route all new subscribers to that list.  Alternatively, MailChimp will also let you create an audience segment of 2-star subscribers that have recently joined your list.

Prune the list with confidence

Download a backup copy of your complete list, then delete all subscribers with 1-star and 2-star ratings.  Note that if you don’t have a seperate list set up for new subscribers, be careful to only delete subscribers that have a long history of not opening your e-mails.  This will reduce your list size dramatically and ultimately decrease the cost of sending campaigns.

Prune periodically
Note that you’ll need to repeat this process of segmentation and pruning periodically since some subscribers may naturally become disinterested or fall out of the purchase cycle for your product or service.  I always recommend downloading a backup copy so you never actually delete subscribers that you prune from the list — rather, they are stored in your list backup file.

Real-world results

Our client, mentioned above, has been sending out e-mail marketing campaigns since 1998 and has been slowly building the list over time.  We decided to prune their list using the above technique and saw the following results.

• Their initial list size was cut by 69%, saving them $75 per month in fees.
• Open rate was well over twice the industry average and their list average.
• Click rate is 45% higher than the industry average and their list average.
• Bounces are almost non-existent.
• There have been no abuse complaints.
• There have been only a handful of unsubscribes, and only one 4-star or 5-star subscriber has unsubscribed.

Our next step is to segment the most recent 2-star subscribers and send them a special discount to encourage them to visit our client’s site and purchase.

This isn’t a political post, rather to show you how not to keep your “customers” up-to-date.  After hearing today that the bill the US Senate passed last night included hundreds of millions of taxpayer dollars for manufacturers of wooden arrows for children, Puerto Rican rum manufacturers and American Samoa.  Wanting to read the bill myself (all 400+ pages, I hear), I went to senate.gov.

The fact of the matter is that you, the American citizen — the “customer” — won’t find any mention of the bill on the Senate’s homepage.  Matter of fact, I spent 20 minutes searching for it, and think I found it, but I’m still not sure because half of the bill isn’t about the economy.  I turned to a news site that offered a clear link to the legislation, and I found:

Sec. 308. Increase in limit on cover over of rum excise tax to Puerto Rico and the Virgin Islands.
Sec. 309. Extension of economic development credit for American Samoa.
Sec. 314. Indian employment credit.
Sec. 502. Provisions related to film and television productions.
Sec. 503. Exemption from excise tax for certain wooden arrows designed for use by children.

…and the list goes on.

Why do the American people detest Congress?  Perhaps it’s because Washington doesn’t provide us adequate usable access to the legislation that crosses the floor.  Here’s a link to the bill, and if you’re for or against it, call your Senator or Representative, but good luck trying to find their contact information on their web sites.

Our friends at Campaign Monitor have recently updated their Guide to CSS Support in Email, a resource that we use when building e-mail marketing campaigns.

If you build e-mail marketing campaigns to send to customers, this resource is essential to show you how to code campaigns in a way that all e-mail clients will render properly. Just like any good web developer tests their web site in multiple browsers, you should test your e-mail campaigns in multiple clients. Knowing how to develop to comply with the rendering of each e-mail client will help you build an e-mail campaign that can be seen properly by everyone.

As we’ve discussed before, it’s still best practice to build your e-mails with a table-based layout, using CSS sparingly to format text. CSS should always be used inline in the HTML code, never declared in the <head> of a document and never by referencing an external file.

There’s a new blog post over at Campaign Monitor that discusses what’s changed in e-mail marketing design in 2008. I found this article helpful as it is an updated list of best practices for the industry. These include the following topics:

• Don’t waste your readers’ time
  Inboxes are full — give them something useful.
• Permission matters
  Remind customers why they are getting the e-mail.
• Relevance trumps permission
  You need permission, but a relevant message generates action.
• Make unsubscribing easy
  Why pay to send to customers that aren’t interested?
• Image blocking is common
  View your design without images to see if the message still comes across.
• Bring back tables
  E-mail clients are not standards-compliant and your table-less CSS layouts will be totally trashed.
• Add inline styles
  Gmail will strip out all other stylesheets.
• Don’t forget your plain text version
  Make it readable and encourage scanning.
• Meet your legal obligations
  Brush up on CAN-SPAM regulations.
• Test, test, test
  Want to get more action from your e-mail? Test new versions to see what works.

With the economy in its current state and gas prices through the roof, many shoppers are leaving the car keys in the drawer and shopping online (Source: Harris Interactive — “one-third (33%) of online US adults say they are more likely to shop online rather than at a store because of high gas prices“).

Relevant, timely e-mail campaigns are a great way to drum up online business, and following the guidelines from Campaign Monitor will help you manage a better campaign.

Web designers, take note! The folks at Campaign Monitor are undertaking the valiant effort of trying to establish baseline standards that e-mail clients should meet, and they need your input.

Campaign Monitor is asking designers to contribute ideas for what should be supported in baseline cascading style sheet standards. Go leave your comment now.

Notes for the non-technical: If you aren’t a web designer, designing and coding an e-mail is a difficult process that often involves using antiquated coding techniques because e-mail clients (i.e. Outlook, Gmail, etc.) don’t support the same types of code. Establishing standards would not only make it easier to code HTML e-mail campaigns, it would ensure proper rendering in all e-mail clients so your e-mails look as intended.

The folks at Campaign Monitor recently posted 30 free HTML e-mail newsletter templates on their web site. These newsletter templates, while generic from a branding perspective, have been tested in a variety of common e-mail programs (and web-based e-mail apps like Gmail and Yahoo! Mail) so you can rest assured that your e-mail newsletter will render properly and consistently.

Because you’ll also want to include a text-only version when you send out your e-mail newsletter, Campaign Monitor has also provided three well-formatted text-only newsletter templates.

The latest Marketing Sherpa brief arrived in my inbox today and had some great insight into sending marketing e-mail to BlackBerry and mobile device users. While marketing to users with mobile devices is still under the radar of most marketing executives, it’s prudent to know that business users are adopting these devices and reading carefully crafted HTML e-marketing campaigns on them.

Here are my takeaways from the article. Feel free to read yourself — you can access the article for free until August 1st.

• 64% of key decision makers are viewing email (and your company email marketing campaign) on their BlackBerrys and other mobile devices.
• BlackBerrys are more heavily used by business users than Treos and iPhones. BlackBerry users are younger (under age 45).
• You don’t have to communicate with BlackBerry users with all-text messages. While text messages are the best strategy, multipart-MIME messages (HTML and text version in the same message — the email client decides which to display) can be a good option.
• Companies should market to mobile device users separately so display issues don’t occur. The best way to do this is survey your customer base or ask for mobile preferences on a newsletter sign-up page.
• Messages should be crafted differently than traditional e-mail marketing. Message width and wording are both considerations. Displays on newer BlackBerry devices are 320 pixels wide.
• Your company name should be the first thing the user sees, followed by a short “hook” or offer. Personally, I liked the way Marketing Sherpa advises marketers to “be brief, be brilliant and be gone.” Mobile device users scan email, not read it.

The article also provides a link to download Blackberry simulators in case you’d like to see how your company’s e-mail marketing messages look on the BlackBerry platform.

Finally, I feel that while BlackBerry devices are the most popular devices right now, iPhone is sure to make a splash among a more consumer-oriented crowd in the next 6 months to a year. Now’s the time to research your customer base to see how many customers read email through mobile devices. If more than 10% do, perhaps it’s time to start a new segment in your e-mail marketing list for mobile users. Besides HTML and text, offer your customers a mobile option when subscribing to your company’s e-mail newsletter.

With tools like Instant Messenger, text messaging, MySpace and Facebook, e-mail marketers face increasing challenges in trying to reach younger audiences.

It seems hard to believe, but younger web users such as Gen Y’ers view e-mail as a passé communications tool. Jeremiah Owyang on his web strategy blog shared the following anecdote:

“A few weeks ago, I had a discussion with my kid sister, in a humorous way she told me that she ‘Only uses email to communicate with old people like me.’ And I’m not even in my mid 30s.”

In fact, many younger people interact more with MySpace, Facebook and their cell phones than e-mail. I asked an intern at a client of mine for his reaction to this, and he responded that he either uses IM, Facebook or text messaging to talk to friends. He only uses e-mail when at work.

With these trends in mind, it’s not surprising that companies are either experimenting with or starting alternative “online” marketing programs. The New York Times recently profiled outdoor goods retailer Moosejaw Mountaineering, which started a mobile marketing program this year.

With text messaging’s popularity among many younger folks (under 30 years old seems to be the profile of the text messager), it’s a logical choice to allow those customers to interact with companies via their cell phones. In Moosejaw’s case, they have a “texting” link on their homepage that allows text message users to interact with the company, even offering to send order tracking numbers, account information and rewards information to customers via text message.

While text messaging hasn’t reached the critical mass that e-mail marketing has (Moosejaw sends text messages to just over 1,000 customers according to the Times article), the potential is there. 115 million Americans have used cell phones to send text messages, and this number is only more likely to grow.

Moosejaw gets it — they have a well-established MySpace page as well. They seem to have struck the balance between being promotional and “hip.”

While we’re probably not talking about tens of thousands of customers using these technologies yet, it will become important that companies consider new ways to market to their customers. It will be interesting to see how the iPhone and other advanced mobile devices change trends in marketing as communication evolves.

The holidays are here, and if you’re in internet retail you’ve hopefully already solidified an online marketing plan for the holidays. That plan probably involves email marketing, so I’ve devised some reminders of what you should do and avoid doing so your email marketing is as effective as possible during this crucial time of year.

Don’ts:

• Use XHTML code in your emails (Use HTML as there are delivery errors with XHTML).
• Don’t reference external CSS (Cascading Style Sheets) in your HTML email as most email clients can’t read it. Instead, use inline styles or font tags. You can also reference my earlier guide for using CSS in email campaigns to learn what CSS definitions email clients can handle.
• Send email without validating it. Make sure you close all of your HTML tags so the page renders properly in all email clients. You can validate your HTML email with the W3C Validator.
• Embed forms or surveys in your email marketing campaign. Instead, create a landing page on your web site with the form or survey and include a link to this page in your email campaign.
• Send an all-graphical email. Some email clients will hide images by default, and your customers won’t see your message at all when accessing it through a preview pane.
• Use javascript. This will trigger all kinds of SPAM filters.

Do’s:

• Include some “administrative” text at the top of your email containing your company name or web site address.
• Post the HTML email on your web site and offer a link to it at the top of your email campaign. The text should read, “View this email at our web site” or something similar. “Having trouble viewing this email? View it on our site” is also a popular option.
• Link all of your images back to your web site.
• Include heights, widths and ALT tags on all images. Some email clients that hide images by default may assign a value to the height and width of your images, pushing content further down the page.
• If you offer a phone ordering line, include it in the email campaign.
• Design all HTML email for a 500-600 pixel width.
• Include your site categories/hierarchy as text links. Again, if your customers’ email clients hide images by default, customers will still see the text links to your main site categories. My research has shown that as many as 60% of customers click the navigational links to the main categories of your site.
• Check spelling. Not only is a misspelled word unprofessional, it can also increase your SPAM score.
• Produce a text and HTML version of your email campaign. Multi-part MIME email requires both and not including a text version could increase your SPAM score.
• Make text versions no more than 60 characters wide.

If you’re looking for a good editor to create your email marketing campaigns, try Macromedia Dreamweaver. Using Word or FrontPage to create HTML email marketing campaigns is not a good idea since they do not render “clean” HTML and assign styles to your campaign that most email clients cannot decipher.

I just love this blog entry from Chris Baggott’s Email Marketing Best Practices blog. Chris tells the story of how he signed up for a small internet retailer’s email newsletter and was pleasantly surprised how helpful and relevant the communique that he received was.

There’s a valuable lesson to be learned here. Email—and all internet marketing efforts— don’t have to be terribly complex. They just need to be relevant and helpful to the customer. Sometimes it’s best to step back from your marketing program and ask yourself if the email you send or the search engine ad you write address your customer’s needs.

I like Perry Marshall’s take on marketing to consumers:

“If you sell drills, you can write about how to make better holes, and you’ll get lots more sales leads than merely advertising information about your drills.

Why does that work? Because nobody who bought a drill wanted a drill. They wanted a hole. Offer information about making holes and you’ll be much more successful.”

Well said.