August 10, 2006

How Many Times Should You E-Mail A Customer Each Week?

Here is an article from DMNews, authored by Philippe Suchet, CEO of Kefta. Kefta is a company specializing in dynamic online targeting. The article advocates dismissal of frequent, untargeted e-mail blasts, and outlines several qualitative reasons why this practice should be stopped.

Let me pose a scenario to you. Pretend you are CEO of an online company that sends four untargeted e-mail blasts each week to an e-mail list of 10,000 names. You do not have the resources, nor the marketing budget, to develop targeted e-mail campaigns, or pay a vendor to execute complex campaigns for you. Like most businesses, you need every additional penny you receive from your customer. You have tested different two different e-mail contact strategies, one strategy includes four campaigns per week, the other strategy, only one campaign per week. Here are the metrics:

Situation #1: Four e-mail campaigns per week.
  • E-Mail list = 10,000 names.
  • Each week, 500 names are added to the e-mail file.
  • Each week, 450 names opt-out/unsubscribe, or become invalid.
  • Across a typical week, the four campaigns total $12,000 net sales and $2,000 profit.
Situation #2: One e-mail campaign per week.
  • E-Mail list = 10,000 names.
  • Each week, 500 names are added to the e-mail file.
  • Each week, 350 names opt-out/unsubscribe, or become invalid.
  • Across a typical week, sending just one campaign yields $5,000 net sales and $833 profit.
It is your turn to play virtual CEO. Do you over-contact your customers, and generate more than double the profits, or do you contact your customers less frequently, and sacrifice $1,167 of profit per week?

When we play the role of "customer", the answer appears cut and dried. We wouldn't over-contact the customer.

When we play the role of "CEO", our objectives may be different. The scenario where four e-mails per week are sent results in a 30% increase in opt-outs/unsubscribes. However, there are fewer names leaving the database than being added to the database. As a result, the CEO is likely to advocate four e-mail contacts per week.

Ok, time to share your point of view. You are the CEO. Which e-mail contact strategy do you implement, and why?