Why 0% Opt-Out Rate is Bad

by Tim Francis on December 13, 2012

Was discussing email marketing with a client.

I said our opt-out rate was too low… should be 5%.

Puzzled, the client asked: “I thought we wanted the lowest possible opt-out rate?  Ideally 0%?”

Nope.

Here’s my reply…

(with confidential and competitive info removed)

Tim :)

Case Study – Email Marketing

Hello (removed),

About opt-out rates…. and why 0% isn’t the goal…. and 5% opt-out rate *is* the goal (not higher or lower).

“Don’t Ask, Don’t Get”

Think of the old saying, “don’t ask, don’t get”…. as in, if you don’t ask for a sale, it’s likely you won’t get it.

Hence why salespeople make sales calls, follow-up, etc.  In other words, they “work their list”.

Possible responses a salesperson might get are the following (play along with me here):

– “yes” – some people

– “no” – some people

– “maybe” / “call me in a month”

The 3rd possibility – the “Maybes” – are the absolute VAST majority of people… some of which will be ready to buy in a week, others in a month, some next year, some never.

Prospects Buy On Their Schedule

It’s just a matter of staying in touch until they eventually, finally get pushed towards “yes” or “no”… on their schedule.

These days – more than ever – people buy when they are ready to buy, not when we are ready to sell.

So… we stay in touch.

And that’s the way to look at your email marketing… think from a sales perspective.  Email marketing is here to keep people simmering until they are ready to buy.  In marketing speak, we call it “lead nurturing”.

Email Marketing “speak”

To follow our sales analogy, here’s the translation from sales world to email marketing world…

Yes…

Sales Call: “Yes I’m interested in a consultation / buying.”

Email Marketing: They reply to our email broadcast, asking for a sales meeting / forward our link to a potential buyer

Maybe…

Sales Call: “Hmmm… call me next month.”

Email Marketing: Prospect reads email but doesn’t take action

No…

Sales Call:“Thanks but no thanks, I’m not interested in buying anymore.  Feel free to remove me from your list.”  OR, just don’t answer phone anymore (more likely)

Email Marketing: They opt-out

Annoyed…

Sales Call: rip you a new one, or else report you to BBB, or else bitch and complain about you on Yelp or similar review site

Email Marketing: They hit “spam” = I don’t know who you are, and/or this is irrelevant to me, and/or this is of no value to me.  Or in limited situations, “you did something else to piss me off, and I’m just gonna hit spam out of spite” (but that’s very limited)

With this above translation in mind, you can see “opt-out” is simply someone saying “no, I’ve decided I will never buy from you”.  And that’s natural: some people will conclude we aren’t a good fit for them.  So some opt-outs are good and natural.

And if people are going to give you a “no,” it should be as simple as that.   Just a “no”.   If you’re igniting enough resentment or irritation to generate a SPAM complaint, that’s a problem.

So opt-out is okay – in fact, encouraged – but SPAM complaints are not.

SPAM Complaints are Bad

It’s just like the offline world.

When you receive junk mail – crappy, irrelevant flyers, non-stop credit card offers – it gets pretty tiresome.

Imagine there was a simple button to make it all go away… wouldn’t you click it, like, in a heartbeat?

Where SPAM complaints come from

These happen when prospects legitimately think you are spamming them because they’ve forgotten who you are.  Solution: do the opposite… stay in touch more often.

They can also happen when prospects think your email promos are too salesy and/or push them too much to buy (or other action).  Solution: send them the opposite…. emails that are relevant, friendly, conversational, personal, useful and/or funny. (And yes there’s ways to do this on a mass scale)

Why 0% Opt-Out Rate is a Problem

To have 0% opt-out rate is a problem.

It’s a clear indication we aren’t staying in touch enough.

We need to stay in touch enough that some people get pushed to a “no” and opt-out.  We want that to be around 5% on broadcasts.

What if Opt-Out Rate is Too High, over 5%?

That’s a clear sign that your email marketing:

  • needs to happen more often so people remember you
  • needs different content – so it’s more appreciated by your recipient
  • is boring

… to make your email more “appreciated”, make it more: relevant and valuable (or in corporate-speak, “value-added”).

Also know that the better your writing is – the more interesting and compelling it is – the more people will stick with you.

Let’s be clear – I’m not talking about good academic writing here…. in fact if your sales writing would impress your university professors or Grade 12 teacher, that’s probably a bad sign.

Because what works best is good SALES writing, known as copywriting.  You want to write in a captivating, compelling way that even a grade four student could understand.

Importance of Segmenting Your List

Email can only be “relevant” if we know who the email is going to.

That is why I’ve been pushing us to drill down more and more into segmentation.  To segment the database into separate-enough chunks that we can speak powerfully to each segment.

Blowing Prospects Away With Value

Regular, relevant, valuable emails have a powerful effect – Stephen Covey talks about a related concept in his 7 Habits of Highly Effective People.

It’s the concept of “Emotional Bank Accounts“, and it goes like this…

Everytime you do something genuinely helpful / thoughtful / valuable for someone else, you’ve just made a “deposit” in their emotional bank account with you.

By contrast, if you ask them for a favour, ask them to buy, ask them to click, etc, you are making a “withdrawal” from their emotional bank account.

Problems arise when you try to make a withdrawal, but the “emotional bank account” balance is insufficient.  Like a real bank account, the transaction gets declined as NSF – “Non-sufficient funds”.

I know this may sound abstract.  But if you think about a relationship in your life, I think you’ll relate…

A Happy Spouse is a Happy House

Think of your mom, sister, significant other, anyone like that.

If you do something nice – cook them dinner, shovel the driveway, take them shopping, etc – they suddenly are so much quicker to reciprocate.  You’ve made a nice deposit.

Now if you want to make a withdrawal, it IS possible because there’s funds to draw upon.

Same thing with email marketing.  If we ask the recipient to do something – refer a friend, visit a showroom, click on something, look at a page, etc – we are making a withdrawal.  If we haven’t made enough deposits yet, we’ve got a problem.

That’s what the regular, valuable, relevant emails are all about… making enough deposits first, so we can make periodic withdrawls later…. and be successful at it.

Secret Formula: Regular, Valuable, Relevant

So that’s my reasoning for more emails…. but not just any emails… we want regular, valuable, relevant emails.

For an email to be valuable, we need to know what’s relevant.

To know what’s relevant we need to break-down the database into small enough chunks that all members of each segment have a common interest.  Not saying that segments need to be minisucle… just that they’re specific enough that we know exactly how to add value.

And Use The Right Tools

PLUS… if we have figured out what our segments are, and what is valuable to them, we can compose a sequence of evergreen (non-time-specific) messages.

Those get loaded up into Infusionsoft and get sent out on a schedule that is tasteful and satisfies “best practices” within email marketing.

With this in place, we have emotional bank account “deposits” (customer relationship building) on auto-pilot for months and years to come.

Magic!

So I hope that makes sense…. why we want more emails, why 0% opt-out rate is bad, and how we can cut down on Spam complaints too.

Ideally we want 5% opt-out rate, and 0% spam complaints… with a big-time open-rate.  All those are possible with the strategy I’ve outlined above.

We can discuss more in the New Year.

Hope that helps,

Tim :)

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