New Best Practices for Opt Out Management
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The document discusses new best practices for managing opt-outs from marketing communications. It notes that opt-out rates are significant and can have a snowball effect over time if not addressed properly. A new framework is presented that focuses on measuring opt-out exposure, informing segmentation, preventing future opt-outs through preference prediction and contact governance, capturing opt-out declarations, ensuring regulatory compliance, and maximizing opt-in opportunities through transactional interactions. The framework aims to address the root causes of opt-outs rather than just managing the process.
New Best Practices for Opt Out Management
- 2. New Best Practices for Opt Out ManagementJeff NicholsonVP of Product Marketing, CAIPitney Bowes Business Insight
- 3. What is Opt-out?Opt-out: “When a recipient unsubscribes or opts-out of further communications”Source: The Direct Marketing Association
- 4. What’s Happening to our Outbound Response Rates?The new customer is in controlSocial circumventionAd fatigueThe changing view of “marketing”(A) advocational marketing(B) adversarial marketing“Crouching customer, hidden opportunity.”
- 7. What happens now when you get it wrong…
- 9. “For the longest time, marketers have mistakenly regarded email marketing as “free”. Strategic marketers are finally waking up to the consequences of getting it wrong.”Source: Pitney Bowes Business Insight
- 10. Opt-out rates are Significant
- 13. The Impact of Opt-out is Cumulative (snowball effect)Reachable CustomersReal-world Example:Major US RetailerEmail address for 70% of customers
- 14. 50% of these customers have opted outReachable CustomersReachable Customers“Reachability”Reachable CustomersTime
- 15. WHAT’S STANDINGIN YOUR WAYDRIVERSSYMPTOMSIncomplete DataAbsent or inaccurate email addressThe Customer “Reachability” FunnelData QualitySpam FilterLevel 1 deliverability failure (often blind)Content QualityMental Opt-outDeletion is now habitJunk Filter (client)Level 2 deliverability failure (blind)Frequency + RelevancyExplicit Opt-outUnsubscribe flag requestedReachability vs.DeliverabilityOpportunityCross-sell offers
- 17. Engage in dialogueYour Ability to Influence
- 18. One Moment in Time. Opt-outNo Opt-outOutcome:Opt-outImpact: Long TermOutcome:Response
- 19. Ad Fatigue
- 20. Spam ratingImpact: Short TermYourCampaign
- 21. How are YOU measuring campaign success?CampaignOpt-in CLV(Influenced Lifetime Value)Customer RevenueDegraded CLV(The slashed value due to opt-out)TimeOpt-out CLV(Incidental Lifetime Value)Your Campaign is a Fork in the RoadDid your campaign have a net positive effect? Campaign-derived Revenue vs. the Degraded Future CLV
- 22. How Much is Opt-out Costing YOU?“To optimize customer lifetime value, organizations must fundamentally change how they measure campaign effectiveness”
- 23. Assessing the Impact of Opt-out to your Organization ?
- 24. Marketers Must Re-assess Campaign SuccessExample:Campaign Size: 500,000
- 25. Revenue per Conversion: $200
- 27. Conversion: 30%$600K($3.5M)Immediate ValueX($350)($1.75M)Lost Future ValueX ($350)Impact to Future ValueLost Future ValueImpact to Future ValueOpt-out rate: 1%
- 28. Degraded CLV: $350X $200=3,000Avg Per PurchasePurchases= 10,000=5,000Contribution to Future Opt-outFlag as JunkOpt-outsSpamX 30%NoiseConversion20%67.5%Not DeliveredNo Immediate ActionMental-Opt-outJunk Mail FilterOpt-outResponse3%2%Junk6%Response1%Mental Opt-outOpt-out
- 29. The Critical Importance of “Getting it Right”First 30 Days31 – 60 Days61 – 90 Days90 – 180 Days180 – 240 DaysLess RelevantLess RelevantVery RelevantLess RelevantVery RelevantLess RelevantVery RelevantLess RelevantLess RelevantLess RelevantVery RelevantLess RelevantLess RelevantVery RelevantLess RelevantLess RelevantVery RelevantLess RelevantVery RelevantLess RelevantLess RelevantVery RelevantLess RelevantVery RelevantLess RelevantLess RelevantLess RelevantLess RelevantLess RelevantVery RelevantWhich straw will “break the camel’s back?”The new “getting it right”: It’s not just about potential relevanceWhat to send + What NOT to send
- 30. Ask Yourself:How many emails does your highest value customer receive every week?When was the last time you had a management discussion regarding which campaigns NOT to send to your top customers?Yet, do you have a goal of maximizing the lifetime value of each customer?
- 31. The New Fundamental Framework for Opt-in Optimization Don’t just manage the opt-out process.Address the opt-out problem.
- 32. Opt-in Optimization Fundamental FrameworkDon’t just manage the opt-out process. Address the opt-out problem.Measure ExposureInformSegmentationMeasure and monetize opt-out.Preference & PredictionContact GovernancePrevent future opt-outs.CaptureDeclarationAdhereEnsure regulatory compliance.Inbound InteractionsTransactional ContactMaximize the opt-in opportunity.
- 33. Increase opt-out visibility to improve offer selectionC. Pre-filterFilter opt-out during segmentationD. ConsiderAssess recency and frequency metrics for segmentUnderstandMeasure and monetize opt-outMeasure ExposureInformSegmentationUnderstand what opt-out is costing your businessA. MeasureUnderstand campaign’s true success (response vs. opt-out)B. MonetizeUnderstand the impact of opt-out on customer value (opt-out x dCLV).Preference & PredictionContact GovernanceMake sure the business adheres to planUnderstand desires of individual customersC. EnforceGovernance rules in placeD. AlternativesOffer alternatives to opt-outA. Listen Channel
- 34. Frequency
- 36. Predict likely opt-outsPreserveStop your best customers from opting out
- 37. Capture DeclarationAdhereAccept opt-out flags across customer base.Ensure compliance across affected channels.B. EnforceSubscription compliance rules and systems in placeA. Listen “Capture the flag”ComplyEnsure regulatory compliance
- 38. Inbound InteractionsTransaction Touch PointsLeverage the transactional engagements.Engage with opt-outs when they come to you!C. Transactional Documents95% open rateD. POSInitiate opt-in dialogueE. IncentivizeIncentivize opt-in (CLV)A. Prove itDemonstrate value firstB. Re-connectPreserve using customer preferences, contact governance, dialogueRe-engageMaximize the opt-in opportunity – get your opt-outs back
- 39. Opt-in Optimization Fundamental FrameworkDon’t just manage the opt-out process. Address the opt-out problem.Measure ExposureInformSegmentationMeasure and monetize opt-out.Preference & PredictionContact GovernancePrevent future opt-outs.CaptureDeclarationAdhereEnsure regulatory compliance.Inbound InteractionsTransactional ContactMaximize the opt-in opportunity.
- 40. PBBI CAN HELPSYMPTOMSDRIVERSRESOLUTIONOptimize CLV“More Customer Base”UnderstandMeasure exposure
- 41. Inform segmentationPreservePreference & prediction
- 44. Transactional touch pointsExplicit Opt-outUnsubscribe flag requested
- 45. Customer Analytics and Interaction Solutions
- 46. Communications Management Solutions
- 47. Consulting ServicesMental Opt-outDeletion is now habitFrequency + RelevancyJunk Filter (client)Level 2 deliverability failure (blind)Spam FilterLevel 1 deliverability failure (often blind)AssessDeliverability validation
- 48. Customer Analytics and Interaction SolutionsContent QualityImproveCollect valued data
- 50. Enrich 360° view
- 51. Customer Data & Location Intelligence Solutions
- 52. Customer Analytics and Interaction SolutionsIncomplete DataAbsent or inaccurate email addressData QualityOpportunityCross-sell offers
- 54. Understand VOC
- 55. Engage in dialogueYour Ability to InfluenceMaximize Opt-in,Minimize Opt-outThe “Reachability” Challenge NOW has a Solution
- 56. Thank YouJeff NicholsonVP of Product Marketing, CAIPitney Bowes Business InsightE: Jeff.Nicholson@pb.comT: @jnicholson30L: http://www.linkedin.com/in/jeffnicholson
Editor's Notes
- #16: The Path Less Travelled?