Email marketing was always one of my favorite channels for a few reasons:
# 1: it is easy to track - delivery rates, open rates, click-through rates, conversions - all the measurements are in place.
# 2: its execution requires a holistic approach as it involves numerous marketing pillars, e.g. audience segmentation, customer journey mapping, copywriting and design, testing & optimization, automation etc.
# 3: it's highly relevant and adaptable for multiple marketing tactics, e.g. cold outreach, welcome sequences, revenue expansion, user retention and more.
# 4: it provides lots of opportunities to experiment (with subject lines, messaging, layout, types of offers etc), gain insights, and, hence, improve the email performance over time.
# 5: it allows high personalization options, starting from addressing a user by his/her name and ending with personalized offers based on the user’s behavior.
And yes, email is not dead as some may believe.
Moreover, email marketing is one of the highest leverage in a SaaS business. By sending the right messages to the right people at the right time you’ll be able to skyrocket your marketing performance and grow your business.
With email marketing you can:
Increase product completion across the customer lifestyle
Increase trials-to-paid conversions
Increase feature discovery and product engagement
Increase average revenue per user (ARPU), monthly recurring revenue (MRR) and customer lifetime value (CLV)
Reduce churn
Email marketing continues to deliver higher ROI than social media and search. Check some stat here and here.
I just finished reading the SaaS Marketing Playbook by Etienne Garbugli, a three-time startup founder and head of customer engagement at Landr, where he helped optimize a full customer lifecycle communication program that contributed to revenue growth of 4X in 2 years.
I liked this book because of its holistic approach to email marketing building and optimization. And, secondly, because it's written in simple terms as a peer would talk to a peer at the next table.
Below I'm sharing a small portion of digitally taken notes (out of 250 pages). Some of these allowed me to look at email marketing with fresh eyes or sparked an idea. I'm quite certain, that every email marketer regardless of years of experience or business owner will find some applicable value here.
UNDERSTANDING YOUR USERS AND CUSTOMERS
1. Look at sign-ups from the past few months and create three buckets below. You can do it using SQL, a CRM, database export, Mixpanel, Amplitude or Intercom.
Your best customers | The top 1% in terms of engagement and revenue | Your fans, your advocates. |
The next best | The top 2-10% | Low-hanging fruits that could help create an exceptional experience. A good comparison point. |
The rest | The bottom 10% | Who you probably shouldn’t be targeting. |
2. Schedule 20 min discussions with 10-20 users per group.
3. Perform switch interviews based on jobs to be done theory to understand decisions leading up to using or canceling a product, to understand what people are trying to achieve with your product.
4. Make sure to ask open-ended questions. Listen far more than you talk (90% vs 10%).
5. Ultimately, you should have answers to these questions: "Were there noticeably different patterns?", "Were there opportunities to add value and improve product communications?", "Do you need to create a deeper segmentation"?
6. Talk to users that have signed up from your top 5 acquisition channels to get different perspectives.
"Email marketing requires a database and relationship marketing mindset"
FOUR MAIN WAYS TO SEGMENT USERS
1. By user or by buyer persona
Via self-identification thru a survey
Via manual assessments that review sign-ups once at a time
By leveraging specific acquisition flows (sign-ups originating from a landing page targeting a specific audience)
2. By implicit data
Inferred from other available data
Maybe you could push users down your purchase funnel faster, or change the way you communicate with them specifically
This way of segmentation requires a lot of experimentation
Sometimes this type of data will be the most valuable data you have
3. By explicit data
Captured through a form, a survey, or a set-up process
There is a balance between asking for more information (more fields tend to mean less completion) and getting people to sign-up and act quickly.
Be mindful of the friction you may cause by asking for more information before a user is actually convinced of the value of your product
4. By leveraging behavioral models
Leverages transactional and engagement data
A popular framework for behavioral segmentation is the RFM framework
R - Recency - How recently did the customer purchase?
F - Frequency - How often do they purchase?
M - Monetary - How much do they spend?
Send volumes tend to vary depending on engagement and purchases
No matter which approach you choose, it's important to stick with a single segmentation model across your entire email program. This will help you avoid overlaps - sending different versions of the same email to the same people.
"With segmentation, less is more"
Clear patterns and targeting are easier to write for, and targeting campaigns are easier to execute and analyze. There should be a balance between simplicity of data collection and accuracy of targeting.
MAPPING CUSTOMER JOURNEYS
Go through your entire business. Make sure you have a clear understanding of all the ways users and prospects get contacted by your organization - to prevent overlaps, siloed communications, and disjoined experiences for your uses. It may concern transactional emails (additionally to marketing emails), transactional receipts, customer success comms, support follow-ups etc.
The customer experience doesn't start at sign-up. It starts when prospects are first exposed to your brand, be it through ads, search results or product reviews.
Identify your top 5 acquisition channels (this can be done from Google Analytics).
Review users’ experience from their original channel interaction to the landing page to the sign-up and onboarding process and then your communications.
Map the entire process.
Try to understand gaps in expectations. Your story should be consistent, otherwise, it will create doubts in your users’ minds.
If there are parts that don't move the needle or feel out of place, remove them. What steps are mission-critical and what can be eliminated or delayed?
“It's important to evaluate everything in the context of your goals”
CUSTOM FIELDS
When starting out, businesses tend to overthink their email data model. Due to quick changes in technology, it’s almost impossible to know up-front, what you will need in terms of data next year. The fields will evolve over time.
“Avoid creating a complex solution, which is hard to ship, to test and spot the issues. Keep things simple”
Minimum Viable Analytics Product (MVAP) for many SaaS businesses:
Profile basics
First name, email address, user type, subscription status, sign-up date, language, sessions, country, last visit
Status information
Where the user is within your program (trial, paid subscriber, churned, re-paying)
Revenue metrics
Can be used to calculate user value or subscription types
Value metric
To evaluate how much value your users are getting from your product
Can be tied to your activation rate, your pricing model, and the way you evaluate user engagement.
(Optional) Specific goal metrics
For example, # of referral invites
For each field agree with your team: the source of truth, the type of data expected, the clear label of the attribute.
CREATING KEY USER SEGMENTS
Key user segments can be:
People who haven’t signed up for your product
People who signed up today, in the last seven days etc
Who signed up but didn't engage or didn't activate
Inactive users
Whose trial is about to end or just ended
Paid subscribers in their first month
Paid subscribers retained for two months and more
Subscribers on annual plans
Users who you think will be willing to refer your product
Subscribers who canceled
Sign-ups per specific acquisition channel
"Each user has different attributes and needs to be handled differently".
For a few weeks test real segments with real data. Go through random profiles in each of these segments. You want to uncover issues with segmentation or implementation as early as possible. Make sure you can track users across different segments and that your segments are mutually exclusive when they need to be. Identify issues, adjust and refine.
SENDING EMAILS
“Embrace imperfection. Failure is the cost of creating something great”.
No amount of up-front work guarantees success. Use default templates, proven copy, and simple CTAs. If the email work, scale it and improve the layout, design and copy.
There will be a time to polish your emails and improve the branding elements, but when you are first setting things up you want a quick feedback loop.
PRIORITIZING YOUR EMAIL ROADMAP
In general, you’ll want to prioritize emails that:
Send a lot (large volume of sends)
Send consistently (every day or every week) and
Have the potential to make a big impact on the key business goal
When you are getting started with your email program, you don’t need to set up all types of emails at once. Align with business priorities, have a clear metric to monitor and evaluate performance with user data. Start implementing the first sequence, test and move on to the next sequence.
“What areas are the most troublesome in your business right now?”
What metrics are you expected to move with email? Engagement? Retention? Conversion? Revenue? Sign-ups?
If none of that stick out above the rest, start from the top. Welcome and onboarding emails set the tone for product usage. Better onboarding and value communications lead to a reduction in churn and disengagement down the road. And since they are sent to most - if not all - users, they have a great potential to influence user behavior.
SPEED MATTERS
"The sooner you start sending emails, the sooner you start learning what works and what doesn’t".
To get started fast, you’ll need:
Very simple segments
Built-in templates
Email copy
CREATING YOUR FIRST EMAIL SEQUENCE
The sequence you are working on should only have one main goal. This will help create focus. Is it conversion? Activation? Referral? Reengagement?
Start from the top with your strongest arguments.
"Done is better than perfect. You’ll only be successful if you can live with temporarily imperfect emails".
As long as your emails add to your sequence in both performance and usefulness, you can keep going until your users either activate or become completely disengaged.
As users achieve the goals, you’ll want to move them to different sequences.
A two-day pace is a default one.
DOES IT REALLY NEED TO BE AN EMAIL?
Before setting up a new email campaign, ask yourself if the email is the best way to achieve your objective and drive the user behavior you seek. Maybe popup, sidebar, site notification, chat message, push or browser notification, and desktop notification would be more effective. Those are usually:
better embedded into your app
more contextual
have some novelty
and users typically can’t unsubscribe from them.
"Move away from the one-off campaign to workflows".
Consider the mix, combining email with other communication options. For example, an onboarding flow followed by an email summing up the process or a feature launch email followed up with an in-app message.
This helps to keep communications goal-focused. While the email gets people into the product, the in-app message gets them into engagement with the product.
SETTING UP YOUR AUTOMATION
You need to understand what qualifies the user to enter a campaign, and what is a trigger.
Is it:
Sign-up for a free trial
Trial expiration
Sign-up for a paid plan
The cancellation of a subscription
A certain action that was taken for the first time
Did the user achieve a certain state, like entering a segment?
Did the user do something for a certain number of times ever or over a certain period?
Or, vice versa, did he not do something
"Users are only at one state at a time: Onboarding or Paid or Churned".
For each automated email you’ll need:
Audience/segment
Channel/tool
Template
Content
Campaign goal
Stop date
Schedule
A/B test
Be mindful of overlaps. Make sure your sequences are mutually exclusive. Plan for fallbacks. Test your segmentation data beforehand.
TESTING YOUR EMAILS
Before sending any email campaign live, verify:
The segmentation
Who is it being sent to? Look at random user profiles - are those the people you’d expect to reach with this campaign? Are there risks of campaign overlaps?
The timing
When is the campaign being sent? Will it work across timezones?
The sender’s name
Is it sent from the right person/email box? How does it look in the inbox?
The sender’s email address
Does it pass spam filters?
The subject line
Does it perform well with subject line testing tools?
The preview text
Personalization
Do variables populate the right data? Do the fallback options make sense?
Copy
Is it error-free? Does the discount code work?
Links
Are they functional? Did you use the right tracking codes?
Privacy
Is there a one-click unsubscribe link? Was the full required footer information included?
The template
Was the template tested across major email inboxes and devices?
"Email marketing = nurturing and monetizing your database".
LIST HYGIENE
It’s normal to lose subscribers when you are setting things up initially. Maybe people didn’t expect you to send them emails. Or maybe they didn’t appreciate one of the tests or experiments you ran. You need to ensure your unsubscribe rate remains under 0.5%.
There is no point in forcing people to receive your emails. If your emails get marked as spam too often, it will make it harder for subscribers that do care about your emails to receive them.
"People don't unsubscribe because they receive too many emails. They unsubscribe when there are too many unwanted messages".
You should monitor:
The number of unsubscribers per list, country and device
The users’ reasons for unsubscribing
The number of soft and hard bounces
Deliverability and abuse reports
There is an argument about removing disengaged users from your email list altogether. However, you can try to win back some of them. Difficult but not impossible.
OPTIMIZATION
It will always be more costly - in terms of time and resources - to create new emails than to optimize existing ones. A small tweak that can only take 5 min to implement can get you more sign-ups, users or money.
In SaaS, any improvement you make on the top of the funnel improves the end of the funnel as well:
Improve your welcome email and users will want to use your product more
Improve your onboarding sequence and more people will experience the value of your product and upgrade more
Improve the quality of your upsell emails and more subscriptions will last longer
Improve your retention sequence and maybe you can push that to two years
Optimization and testing also help uncover actual limits for your business as external benchmarks are often useless. Benchmarking against your own previous performance is the best way to get a picture of your potential with your email program.
If you are pre-product-market fit, the business drivers won’t be fully clear, so you won’t know what to optimize against. If you don’t have enough volume, traffic or sign-ups, the evaluation cycle (the time to get statistically significant test results) will be too long to get anything going. In this case, it's better to focus on traffic acquisition first.
Optimizing for engagement? Focus on your welcome and onboarding sequence.
Optimizing for conversions? Focus on your upgrade emails and the lead-up to the email.
Optimizing for retention? Focus on upselling to yearly and your transactional emails.
"Email addresses you don’t contact don't make you money".
SEGMENTING SUCCESSFUL EMAILS
There are two ways to improve the performance of an automated email campaign:
By optimizing the timing, deliverability, content and open rate, and
By re-segmenting it and creating targeted offers for each segment
If you understand the pain points, benefits and reality of the people behind your segments, you can adapt your copy to their specific needs by focusing on:
The subject line
The preview text
The offer
The specific benefits and their descriptions
Testimonies and social proof
Images and supportive visual effects
You can interview people from specific segments to dive deeper into what exact words people use to describe their pain and problems.
Unless 100% of your users are covered by the segmentation, you’ll need a fallback email.
When a subscriber fits none of your segments, you can send them the control - the original unsegmented email.
It's best to roll out the segmented email marketing campaign across only a subset of your audience, 20-30% at most. This will allow you to test and benchmark segmented performance against the control. As you gain momentum and optimize the segmented emails, you can gradually increase from 30% to 50% to 80% and eventually to 100% of your subscribers.
Because re-segmentation adds overhead, it should only be considered for key emails with steady and proven performance (think of a welcome, an upgrade, or a pivot onboarding email).
You need to factor in both, the time that it takes to create the campaign and copy, and also the future cost of managing the larger future program.
This is the end of Part 1 of the post. Part 2 is here.
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