Understanding and combating list churn and list fatigue

Posted by bkloss | Email Marketing | Wednesday 19 March 2008 3:44 pm

The two demons of list growth: List Churn and List fatigue

List churn and list fatigue are two terms that describe the act of loosing mailing list subscribers. The first, list churn is the physical act of loosing a subscriber to an unsubscribe, hard bounce (list removal) or spam complaint. The second, list fatigue is the act of loosing a subscriber’s interest. This, the more diabolical demon occurs when subscribers have lost all interest in your email comunications. No opens, no clicks so, these inactive subs are just adding fluff.

Email marketers will often forget to factor in these two phenomenon when projecting list growth. You tell your boss that you need X dollars to add 10,000 subscribers to your list, he allocates the funds and you gain that 10,000. Unfortunately, you’ve lost 1,500 to list churn and 3,000 to list fatigue during that time so your net gain is only 5,500.

The boss…

Is not happy!

Although you recruited the 10,000 all he cares about at the end of the day is the number and percentage of unique opens and click-throughts

If you arn’t tracking your churn rate, start now. Over the next month keep track of unsubscribes, hard bounce removals and spam complaints. Sum those numbers and divide the total by your overall number of active subscribers at the end of the month + the previous total subscribers from last month. That formula will calculate your churn rate for the month. If the number of new subscribers for a given month is greater than the churn total, you’ve had a growth month. Subtract the lost subscribers from the new subscribers and that is your list growth. Take that over your total subscribers and that’s your growth or acquisition rate for the given month.

Sound a little complicated? Don’t worry…

I’ve created an excel spreadsheet that will do the heavy lifting in your calculations. Just plug in the numbers and you’ll have a nice report to keep track of list growth and churn. Get my sheet here by clicking the bolded link below (If you’re having trouble with the download, right click on the link and choose save as).

Get The List Churn Calculator

Hold the phone…

There are still those inactive subscribers that account for list fatigue. They are a harder cookie to crack because they are not physically leaving the list.

You can distinguish and separate your inactive subscribers by pulling a report of total open and click throughs for each subscriber over a period of time. I would recomend atleast a two month period but the appropriate period will vary by sending volume. If you send mail every day, one month may be long enough to determine inactive subscribers. Inversely, if you send mail only once a month you may want to look at a 6 month period.

Once you have the excel, sort by total opens for each subscriber and you’ll discover the number of people that have not responded to a single mail over the period of time. Remove those subscribers and store them elsewhere to take advantage of the benefits listed later in the article.

So, if you pull out your inactive subscribers, you can do a pseudo deliverability analysis by comparing the % of inactive subscribers by ISPs with my excel email list sorting function. If you see that a particular ISP has a high % of inactives, that may be indicative of a deliverability problem. You can always take out the inactives until that is fixed then re-ad them to see if there is a better result.

BENEFITS OF REMOVAL

By removing inactive subscribers you will receive various benefits. First off, sending email costs money. Anyone using a third party provider such as Aweber or Email Labs pays for a monthly or yearly email volume. By reducing the number of emails sent, you can potentially move into a lower priced sending bracket.

If you are engaged in any testing, the reduction of noise from inactive members will increase the effect size of your experimental manipulations. As an example if you asked a crowd of 1000 people to raise their hand to vote for a favorite band, it would be much harder to determine who won if 500 of the thousand voted for neither. The same is true for testing, usually an analyst is trying to determine what form of copy is most successful for causing open rates. Well if half of your list doesn’t ever open the message regardless of headline, the % difference between the sinner and looser will be proportionally smaller. You may have missed out on a significant finding because of all your inactives.

A third benefit concerns deliverability. ISPs will often convert old, inactive email addresses into Spam traps. See spammers don’t really care if a person is opening their mail, they are all about volume. If you are sending to spam traps, you won’t receive any kind of notification or bounce message, instead your list will suffer a slow silent death with that particular ISP.

So, use the techniques above to better manage your list. This will translate into tangible benefits for any email marketing campaign.

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