The Balancing Act of Direct Email Contact Frequency

As a recipient of several companies’ direct email marketing campaigns, I find that some contact me too frequently, which annoys me, while others wait too long to deliver information, thus I forget about them. Is this typical customer behavior and, if so, how can this knowledge be used to make email marketing more efficient? A recent study by Dreze and Bonfrer in the Journal of Marketing (April 21, 2008) investigates this question with empirically derived data. By tracking the results of a permission based email marketing campaign, the authors were able to measure the effect of contact frequency on email opens, email link click-throughs and customer retention.

The study tracked 31 different email campaigns and followed a total of over 2.5 million sent emails. Roughly 14% of the emails were opened and, of these, another 14% generated a click-through to a web-link embedded in the email. Approximately 2% of the emails yielded an unsubscribe request from a customer. Furthermore, the authors note that the best days of the week to generate email opens are Sundays and Tuesdays, while the best days to generate click-throughs are Sundays, Tuesdays and Wednesdays (interestingly, Monday is the absolute worst for any email contact). Taken together, these results suggest that, when targeted properly, direct emailing campaigns can be a good way to get customers to view marketing copy.

However, the authors note that the frequency of email contact has a big affect on customer behavior. Using a bunch of sophisticated math that we’ll side step here, the authors use the empirical data to determine the likelihood of particular behavioral events based upon the email contact frequency. For example, the authors note that for open and click-through response rates, the frequency does not significantly change with respect to the email contact frequency. Thus, if the goal is to get customers to open an email and click-through, then contact should occur relatively frequently.

However, the authors notice a different trend when it comes to customer retention. The results of the study suggest that there exists a delicate balance between email contact frequency and longterm customer retention. Contact that is too frequent yields annoyed customers that cancel their subscription. Conversely, waiting too long results in irrelevancy in the mind of the customer.

Balancing out these concerns into a metric of customer equity, which considers the value of long-term customer retention as well as the value of frequent email opens and click-through, the authors find that the optimal email contact period is between 35 and 49 days. Of course, the authors place a lot of value in long-term customer retention. Other firms argue that turnover with direct email campaigns is naturally high (lose some, but gain more), so retention shouldn’t be the goal, but rather email opens and clicks. Regardless of your particular goal, the analysis provided in this study can serve to guide our decisions in these types of marketing efforts and maximize the efficiency of these campaigns.

June 26, 2008 |

The Balancing Act of Direct Email Contact Frequency

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