Using Email to Drive Renewals

The Direct Marketing Association’s annual ROI figures are in and the winner is (no surprise) e-mail!

Yes, once again e-mail leads all other direct response channels in ROI. The DMA estimates that companies using e-mail marketing in 2008 generated an average $45.06 in revenue for each dollar they spent.

E-mail is a relationship medium, meaning it helps develop, build, and strengthen connections with customers and potential customers. It’s especially effective at eliciting response from current customers, which is where renewals come in.

E-mail renewals are a form of transactional message; they relate to a previously agreed on business deal. A 2007 survey done by MarketingSherpa, StrongMail, and Survey Sampling International found that 75 percent of respondents said they “very often/always” or “frequently” read transactional e-mail messages. Only 55 percent of the same group said they “very often/always” or “frequently” read other types of opt-in e-mail messages.

Renewal messages’ transactional nature generates more interest and engagement than a promotional e-mail sent to non-customers. This supports the idea that it’s less expensive to keep a current customer than it is to find a new one.