The Double-Edged Sword of Collecting Customer Emails

Why your high sign-up rate could be harming your sales

I’m sitting in a boardroom that’s somehow both stuffy and ice-cold, thanks to the air-con unit blasting out recycled oxygen into my lungs. Perfect.

I gently swizzle my ergonomic office chair one way, and then the other, while staring up at the screen. It’s filled with charts and statistics around the new email capture form the growth team launched last month on the homepage.

The results look great. They’ve captured hundreds of new customer emails. The team are chuffed.

Why shouldn’t they be?

The first step in an ecommerce business is getting customers to your website. One of the many successful ways to bring customers to the site is through email marketing. To do that, brands need you to willingly hand over your email address.

Which is exactly what the numbers on this TV screen say we’ve achieved.

So, why are these results I’m seeing making me nervous?

Because I’m the one who’s going to have to question the validity of their data.

I’m pretty sure they’ve forgotten to track a crucial secondary metric.

I’m pretty sure because I’ve done extensive testing on this exact problem with a well-know billion-dollar clothing brand.

Before I raise my voice, I think back to what I learned with my previous client.

…

We had 2.95 million users visiting our site each week.

97% of those people didn’t make a purchase.

Only 0.02% of those people signed up to the email list.

That’s 572 people.

Combined with the 3% of customers who gave us their emails at checkout when they purchased, that left 2.86 million customers we wanted to capture the attention of.

Naturally, we wanted to capture more of the action.

Our analytics team had unearthed two key facts that grounded our work.

Firstly: Each customer email was worth $25 to the business.

Secondly: Asking a user for their email usually resulted in a lower conversion rate. This could significantly counteract the $25 value of getting that email.

This put us in an interesting position. We could experiment to find the sweet spot between these two opposing goals. So we did.

Here’s what we learned.

1. Don’t ask for an email immediately. Wait until customers are two or three pages into their journey.

2. Don’t ask for an email too close to purchase. Avoid distracting people when they are viewing product pages, or the cart.

3. Don’t ask for an email while people are browsing. Wait until they have been inactive for at least 10 seconds.

4. Don’t rely on a single approach. Use multiple methods, from pop-ups to banners to footer-based forms.

5. Offer something in return to the customer. Show them you’re reciprocating in return for their personal data.

This is the opposite of what most DTC brands do online - who tend to slap you with a sign-up form the moment you arrive on the site. You can’t avoid it. It’s coming for you.

We were able to prove that with the right approach, you can capture emails without harming conversion.

After multiple rounds of testing, with hundreds of thousands of customers, we were bringing in $175,000 per week in revenue in the form of new customer emails.

We were able to do this because we calculated the value of an email, and the cost of acquiring it across different scenarios.

We knew the value of tracking more than one metric.

You see, we love to think of business metrics as always heading up and to the right. But in the real world, data doesn’t look nor behave like this. Not if you zoom out and examine the wider ecosystem.

Businesses are complex organisms. So are customers.

Focusing on a single metric can be a mistake because the reality is that most things come with tradeoffs. Just because it’s good for your team, doesn’t mean it’s good for the business.

Of course, I could be wrong.

If I’ve learned anything from my years of experimentation in Ecommerce, it’s that what’s true for one business isn’t true for another. It’s possible my new client have done the calculation too, and can prove me wrong.

…

I snap out of my daydreaming and bring my focus back to the meeting.

I raise my hand to ask the question, knowing I’m about to knock some of the wind out of this presentation.

“Yes, Ian?” Sam says.

“Have you been tracking conversion rate since the launch?” I ask.

…

Silence.

---

---

---