Two Database Marketing Principles to Increase Email Marketing ROI

Guest post by Daniel Faggella.

Building an email list is vital for online business success. But it takes time, money, and work. Here are two strategies for optimizing the investment made in building a house list for email marketing efforts.

Principle 1: The Yellow Brick Road

Two Email Marketing PrinciplesWhen a prospect enters your world, via opt-in, by registration, by a first purchase… they should not be permitted to stray. Any entry point with you will lead them down a Yellow Brick Road (or “YBR”) – a series of explicit steps to get them to the highest customer lifetime value possible – while delivering maximum benefit to them (the customer).

This isn’t just about how much of their money can fit in your wallet (you can always get a bigger wallet, so that’s not a problem), but also how you can fit your product or service to provide for the customer.

Your YBR should be customized and tailored to the prospect, and flexible to adjust itself to their goals / desires / situation.

If you offer, let’s say, a software as a service (who doesn’t, these days), then let’s suppose that you’d like your YBR to result in the maximum monthly usage (and revenue) of your service, and prolonged / indefinite retention.

Suppose that your software allows users to detect loopholes in their databases or their own software, giving them the ability to patch up these errors before hackers take advantage of them. Regardless – you’ll be thinking about your YBR this way:

Think about the YBR like this…

“How can I identify the exact needs of the prospect, and the most profitable and valuable fit for our service or product – automatically?”

If I’m a small eCommerce site concerned about the credit card information of my customers, I’ll need to be spoken to much differently that a massive software company who is more concerned about their own proprietary software being hacked. If I’m a 40-person company, I’ll need to be communicated with much differently than a 40,000 person enterprise.

Can you determine the size of the enterprise on the front-end of your YBR (IE: the opt-in or appointment form)? Can you refer to other companies of my size (or in my sector) in email or phone communication?

Can you tailor your message to the phase of the funnel I’m in? For example – if I have downloaded the free version of your software but haven’t yet installed the tracking code, what would you like me to do next?

Determine all of the ways that people can make their first step on your yellow bricks, and lay out the ideal path to determine your optimal fit for THAT exact prospect, and move them, step-by-step, to the exact path to make that perfect match.

Principle 2: Routinize Your Reach-Out

When a prospect ends their automatic email interaction with you – they’ll often end up in the “bucket.” This is the database segment that you tried to get hooked via a string of emails – possibly phone calls – and potentially even mail pieces (though physical mail is rare for early-stage startups).

After a month of emails, phone calls, and no conversion (maybe even no contact at all), they end up in that big list of past leads that either gets totally ignored, or gets mostly ignored – interrupted only by random promotions or a vanilla newsletter.

OR – after becoming clients, the “push” for conversion stops, and again – communication simply stops or goes vanilla.

But WHY?

There is always another conversion, or another desirable action.

Maybe you current clients end up staying longer when they’re properly educated on your software, so selling additional consulting or getting them to a series of educational webinars would be tremendously valuable in terms of bottom line (with a much higher ROI than dropping dollars on putting new customers into a “leaky bucket” in terms of retention).

Maybe clients who never converted before are looking for more information – what kind of educational articles, videos, or case studies could they gain value from? Instead of having a sales team call “prospects” – why don’t they START with the prospects who opened the case study email – and clicked to read it? Do you think those prospects would be more qualified than those who haven’t opened an email in 3 months?

However, this database segment outreach ought not be random – but regimented. Just like prospecting (this is a kind of lower-cost prospecting, by the way), it must be a discipline – yet how rare that is ever the case!

Below are some examples that might fit different business models.

Security SaaS Example:

  • Once per Month – Put on a unique, case-study (social proof)-oriented, educational webinar for all current clients – soft pitch to add-on services and consulting.
  • Quarterly – Run a particular offer to all major unconverted prospect segments (by industry), including additional bonuses and incentives to join or sign up this week.
  • Weekly – Pick a micro-niche within your database, and run a two-email sequence to that segment (IE: all customers who have 500 or more employees, or all previous customers from the energy sector who cancelled your service, or all prospects who used a trade journal as a lead source yet have not converted), and tailor a specific offer, upsell, or cross-sell JUST to that segment, experimenting with what offers click with specific sub-segments. All opened emails will be followed up my a phone call for that same limited-time offer.

Fashion eCommerce Example:

  • Weekly – One email each Tuesday morning at 8:00am, offering an updated selection of new available lines, catchy / share-able blog posts, and new offers. Prospects and customers can be tagged for new “interest areas” based on what they habitually click on.
  • Weekly – Sub-select the buyers of a particular kind of garment, or brand of garment, and send out a one-or-two email blast about some special offers or bundles JUST for that sub-segment.
  • Monthly – Fashion expert interviews seem to perform very well on your company blog – so monthly include a major blog feature about a particular designer, as well as a clear offering for various new items from that particular designer.

Do you think that the strategies above would do better than “random emails to the database when we feel like or it think it will be a good idea”? Of course.

The idea is not just to set a regimen, but to experiment with MULTIPLE formats, and determine through qualitative and quantitative methods exactly which strategy seems to deliver the best long-term ROI.

Database marketing is not just about the automated front-end, and where it lands your prospects / clients once the automation ends. It’s also about the art and science of regular content, making “customer lifetime value” not just a matter of your initial front-end automation (which is important, and our first area of focus), but also on the “rhythm” of communication over time – lasting years and years for prospects and customers alike.

Daniel Faggella is an email marketing and marketing automation expert with an obsession for customer lifetime value. He runs CLVboost, a boutique email marketing consultancy in Cambridge, MA, and regularly speaks on email marketing strategy. His clients range from venture backed startup companies to eCommerce businesses to established brick-and-mortar businesses.

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  1. Hey Daniel,

    I do have to say that my emails can be a little stale. This post really gave me some ideas of what i need to do to get them to be more upbeat. In this fashion I can get a better response from my list and increase my ROI. I really like the weekly, quarterly and monthly strategies you provided here and this post gives me some ideas of how I can be a bit more organized with my emails. Thanks very much for sharing!

  2. Sherman, thank you, my good man.

    Determine those regimens and find what’s a good fit for you team. Remember, keep ROI in mind (what’s the POINT of the weekly, monthly emails?). Glad this was helpful!