Have you ever tried to fill a leaky bucket? It doesn’t work so well. By the time you figure out that it’s leaking, you’ve put a lot of time and energy into pouring cup after cup of water into the bucket, to no avail.
Not so fun.
Product churn, or when customers try your product for a while and then stop using it, is the business version of that leaky bucket. It requires marketers to work harder and harder to drive demand—fill the bucket—even as customers leave.
What if you could plug that leak…with email?
As companies are increasingly asked to do more with less, email marketers are feeling the strain. While there’s lots of ways to automate your email development process, it’s also important to look into automating certain aspects of your email marketing ecosystem, particularly as a way to solve business issues like product churn.
We sat down with Nick Steeves, Chief Product Officer at Wishpond, to discuss how email marketers can better leverage automated emails to reduce product churn.
What are automated emails? How do you define automated emails in relation to product churn?
Automated emails are emails sent based on actions that users take (or don’t take). They’re created in a marketing automation platform, such as Wishpond, and are set to send to any user when they meet a certain set of conditions. This is in contrast to email newsletters or personal emails, which you must create and send manually.
Conditions for automated emails can be broken down into two categories:
These are the behaviors that a person takes in your app and owned marketing channels, such as your website and emails. This includes page visits, purchases, tasks completed (and not completed), and email opens/clicks. Timing and frequency of actions can also be factored in.
For example, an automated email could be sent to a user after they created their first project to tell them what to do next. On the other hand, if a user signs up for an account but doesn’t create a new project within three days, an automated email could be sent to ask if they need help.
These are the personal details of a user, such as birthday, shoe size, and personal preferences, and the details of their company, such as industry, number of employees, and budget.
The best marketers use demographic and behavioral conditions together. This allows you to send automated emails that are not just timely, but personalized for each user. For example, if a new user signs up whom you know uses WordPress, you could send an automated email with a call-to-action (CTA) to download your WordPress plugin.
How can automated emails help reduce product churn?
Automated emails help you do two things to fight product churn:
Nudge Users to Come Back
Users churn for any number of reasons. It could be that they became too busy and forgot about your product, or because they didn’t enjoy using it in the first place. Either way, automated emails based on inactivity are probably the easiest way to decrease churn and increase revenue and lifetime value (LTV).
Here’s an example of the automated emails we send to Wishpond users who signup but don’t create any campaigns. We’ve found that short, personal emails from a customer support rep are the best. They help start a conversation with inactive users, discover what roadblocks are in their way, and help them find value in the product:
Show Users How to Get More Value
This is a big problem we try to overcome at Wishpond. Our product has a ton of features. But the rub is that this makes it more difficult for our users to find the specific features that will provide the most value for them.
To overcome this, we send automated emails that introduce features that will help our users, based on the types of campaigns they’ve created. For example, we know that adding an exit popup to a landing page will help stop a certain number of visitors from bouncing, therefore increasing the conversion rate. So when a Wishpond user publishes their first landing page, we send them this email with a CTA to add an exit popup to their landing page:
For more on how we send automated emails, check out this post on email drip campaigns.
Why should email marketers be concerned about product churn?
Churn will ultimately kill your business. And, as discussed above, email is a huge factor in determining churn. To give you an example, if you have just 5% monthly churn, your annual churn rate is 54%. This means that you would be losing 46% of your customers every year. Or, put another way, you would need to acquire 46% more customers every year just to maintain your customer base.
This is one reason why revenue should be the singular focus for all marketers. If an email marketer only focused on opens, clicks, new subscribers, or new customers, then they would be completely blind to the need to decrease churn.
What are some examples of successful automated emails aimed at reducing churn?
Pinterest’s emails are great at bringing users back with new content personalized for them. This one takes it a step farther though and asks you to connect with another Pinterest user who Pinterest believes shares your interests. This is a great way for Pinterest to create community on its site, thereby driving more time-on-site, discovery, and engagement.
This email tells you that you have 19 Pins in common (not bad) and has a big CTA right in the middle of the email to “Meet your Pin twin.” The quirky button text may help prompt more users to give it try.
This is a great “next step” email from Grammarly. Its subject line creates a great curiosity gap by making us wonder what we’re missing out on. Inside, the email gives you a great and easy way to derive more value from Grammarly by downloading the free browser extension.
It uses a big red CTA to make it easy and obvious what to do. And the button text is very specific about what it wants you to do (Get Grammarly for your Browser).
What types of content should these emails include? Should they be plain text or HTML?
The content should be whatever is most valuable to the user at that moment. Here are a few examples:
- A way to begin the next step: This can be as simple as a CTA button that takes the user to user to the next step in the setup wizard in your app.
- Video tutorial: This is best for welcome emails. Video tutorials provide a quick and easy way for a user to learn how to do stuff in your product and get value immediately.
- Example-based PDF: As I mentioned above, examples can be a great way to push people to create their first project in your app. A PDF version is great for this kind of content because it allows the merchant to save it on their computer for later access.
- Invitation to talk: Sometimes your users just need to speak to a human to help them feel at ease. At Wishpond we use a “reply to this email” CTA in our emails to our inactive users.
“Regular” emails vs. HTML designs
“Regular” emails may be plain text emails, or minimally designed HTML emails that look like plain text. When they look like they’re sent by a real person, it can be incredibly effective, but only if used sparingly. If you send every email to look like it was typed out by a person, especially if it’s outside of your normal office hours, it’ll become immediately apparent that they’re not being sent by a real person. And this will cause the user to lose trust in you.
Instead, only use plain text emails for the most important reason: Inactivity. If a person signs up for your product and is then inactive for 1-2 days, that should set off alarm bells that you’re going to lose them. Use this moment to send an email from one of your support agents like this one:
Users will feel like this is from a real person (and be more likely to respond) not just because it’s asking them to reply to the email (instead of clicking a link), but because the condition for the email is inactivity, not activity.
Let me explain.
If you take an action in an app, and then 2 minutes later you receive an email from a ‘person’ congratulating you on it, it’s obvious that it’s automated. But if you sign up for an app, don’t do anything else for a day or so, and then receive an email, it will feel plausible that a person is really on the other end checking up on you.
When addressing product churn, should it be the focus of a specific campaign, or part of a general email ecosystem?
Make it part of your email marketing ecosystem so you can accurately track everything. This will allow you see how your users are affected by not only each automated email, but how they’re affected when receiving different combinations of emails. The main metric to watch when determining their effect is LTV.
This approach will also help you avoid the cardinal sin of sending the same content to a user twice.
How do automated emails like this fit in with broader email campaigns?
This generally depends on two things: what lifecycle stage a user is in and what the email campaign is about.
Early-stage leads are generally just newsletter or blog subscribers. They’ve visited your blog and have given you their email address, but have not shown any serious buying signals. Zombie leads are people who, regardless of their stage, have not engaged with you in several months.
These leads are fair game for any email campaign. They aren’t showing any specific interests, so at this point it’s fine to try different campaigns on them to see what sticks.
These are leads who have shown some buying signals, such as visiting your product and pricing pages, downloaded your high-value white papers, or attended a webinar. These leads should be completely exempt from any email campaigns outside of the automated emails that are sent as a part of their personalized lead nurture campaign.
It’s generally best to avoid sending churn-reducing email marketing campaigns to current users. They’re already sold on the product and its benefits, so sending emails that try to do just that will be irrelevant to them. However, if the email campaign is about a new product feature, then that’s something that active—and churned—users will want to know about.
For churned users, this new feature may provide the value or benefit that they originally wanted from your product but it didn’t yet have, and reactivate them.
What kinds of segmentation strategies should marketers consider when creating automated emails to reduce product churn?
Basic (must-have): Behavioral segmentation
Behavioral segmentation is based on the actions that a user has taken (or has not taken). It allows you to easily deliver timely, helpful content and nudges based on each user’s current situation.
Here are three of the behavioral segmentation stages we use at Wishpond:
- No activity: Signed up but has not started to do anything
- Drafted campaign: Started creating a campaign but did not publish it
- Publish campaign: Published a live campaign
Advanced: Behavioral + demographic segmentation
You can power up your behavioral segmentation by adding a demographic layer on top. This demographic information is generally gleaned on the signup form:
- Complimentary products: Show your users how they can integrate your product with others they already use. For example, if you have an integration with Salesforce, and you know that they use Salesforce, send them a tutorial on how to utilize the integration.
- Team size: If a user tells you that they work in a team, send them an email on how to invite their colleagues to create user profiles within their team account.
- Personal preference: If you have a fitness app, for example, you could ask new users what kinds of fitness training they like best, or what their fitness goals are. Based on that, you could send them emails with personalized fitness plans.
What are some metrics that marketers should consider when measuring the success of an automated campaign like this?
The most common metrics that marketers focus on are open and click-through rates, but they can be red herrings. For automated emails meant to decrease churn, the two metrics to focus on are churn rate (duh) and customer LTV.
If you’re seeing that users who engage with your automated emails are churning at a lower rate and are spending more per month/year, then you’ll know they’re working.
Is there a situation where automation can actually be detrimental to stopping product churn?
Yes. There are two common situations in which automated emails can increase product churn:
Too many emails
People loathe being bombarded with emails, even if those emails are relevant to them. This can be an easy hole to fall into if you start setting up a lot of emails to send based on actions users take.
One simple way to avoid this is to only send “next step” emails the first time a user completes a task, not every time. “Next step” emails are meant to show users how to get more value based on the things they’ve already done.
This is one of the biggest pitfalls of using time-based drip campaigns instead of automated emails based on behavior. It causes you to send emails that don’t apply to the current situation of each user.
Email marketers love to test their emails—what are some suggestions of areas to test that could have a big impact on product churn?
Every product has what’s called an aha moment: The moment when a user first finds value in the product and realizes that it’s something they should continue using and paying for. One idea is to test which email content gets users to reach the aha moment more often and faster.
For us, the welcome email, sent immediately after sign up, is by far our most opened one. This means that it has the biggest potential to affect our user’s immediate success and therefore churn rate. I would test out what resonates best with new users: Video tutorials, product demos, onboarding webinars, or just a big CTA button to get started.
As I mentioned above, the first 24-48 hours are critical in a user’s lifecycle. If they can’t get value in this immediate time period then it’s immediately unlikely that they will feel this app is worth their time.
Test sending an automated email with either a CTA button to get started or a request to reply to the email to talk to one of your support agents.
Get the most out of automated emails
By streamlining your workflow and adding automation in place, you can reduce product churn—and maximize email marketing ROI. Start by testing a few automated emails as part of your overall email ecosystem and see what works best.
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