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What if you could only choose one marketing channel to grow your company? I would choose email marketing every time. Research shows that email marketing has the highest return on investment out of any channel: $42 return for every $1 spent. The ROI from email marketing is actually increasing over time - it was $38 for every $1 spent in 2018. That might surprise you if you’re used to relying on social media and other channels for growth. There are a few reasons why email marketing has such a high ROI.
• 4.1 billion people use email as of 2021, up from 3.7 billion in 2017 according to Statista. Email is far from dying - it is still growing year after year.
• 85% of B2B organizations rely on email marketing software to execute their content marketing efforts
Email marketing is clearly capable of producing impressive results. But, what is email marketing? It is much more than sending sales pitches to a potential customer. Instead, successful email marketing requires sending the right message at the right time to encourage a specific customer action.
Email marketing is the best way to send your customer the exact right message at the right time in their customer journey. That means your message can almost be as relevant as an in-person conversation.
When you speak with a friend you know well, you talk about your shared interests, past experiences, and more. On the other hand, when you meet some new for the first time, you talk to them differently. In digital marketing, it can be challenging to achieve that result in many channels. Email marketing is different.
You can use analytics to determine if a person is brand new to your brand and send a welcome email to them. On the other hand, emails to current customers can take a different approach, like introducing them to new features. The fact that email can connect with prospects, current customers, and former customers is why email is so impactful. No other digital communication problem is more widely used than email.
A key reason email marketing is so effective is that it supports every part of the customer lifecycle. The journey starts with marketing emails that create awareness and encourage a prospect to give your product a chance. Next, users are introduced to your product through welcome and onboarding emails. Once you have a paying customer, several kinds of emails are sent, like receipt emails and retention emails. From strangers to loyal customers, it is crucial to send the right email at the right time to keep users engaged.
Taking the time to learn a new app can take some convincing. That’s where marketing emails play an essential role. By offering valuable content, you can encourage prospects to join your email list. Once they join, you can nurture those leads by building trust and authority over time. In addition to sharing valuable content, marketing emails are a great way to make offers such as year-end sales, invitations to sign up for a free trial, and more.
Marketing emails also save time for your sales team if you are selling to the enterprise. Prospects nurtured through receiving emails are more likely to come to a sales call ready to get started. By laying the groundwork for sales calls, your sales team can spend more time on engaged leads than cold leads who have no idea what your product offers.
Effective marketing emails are not just sales pitches. It is essential to vary the objective of your emails. Some of the best marketing emails deliver value to prospects over time rather than overly promoting your product. In addition to asking customers to buy your product or upgrade, you can also make other offers. For example, some companies used email marketing to promote their annual conference. You can also use marketing emails to introduce new features or integrations to customers.
Welcome emails introduce a customer to your product. At their best, a welcome email invites replies and gives users a quick win to achieve with the product. Don’t be afraid to repeat yourself. Some welcome emails repeat their main call to action two or three times for clarity. In the case of more complex products, you might also present a checklist of steps in your welcome email. Of course, it is tough to build a relationship with a customer with a single email. After you introduce the customer to your product, the next step is to guide them through an onboarding email sequence.
Effective onboarding emails blend together a few factors to achieve their goals. In the case of products that offer a free or low-cost trial, onboarding emails have a sales objective. At the end of the free trial period, onboarding emails need to give the user reasons to upgrade to a free paid account. The most obvious reason to upgrade is to keep access (i.e., your free trial ends in 5 days). For companies that offer permanent free accounts, showing the limitations of the free product plan is needed to motivate people to take action. For example, Slack sends users a detailed email showing all the features they will lose when they downgrade to a free user plan. By itemizing all of the features that will be lost, Slack clearly shows that there is a lot to lose if the user switches from a paid plan to a free plan.
Of course, few people will pay for a product that they don’t know how to use. That’s where the second purpose of onboarding emails comes into play. The best onboarding emails help users use your product’s key features and experience value. Your emails can include links to tutorials, videos, and other resources to help users. In some cases, you might invite users to new customer webinars or other high-touch sessions to get them started. Nobody likes to look uninformed, so it is crucial to make it easy to get help and get up to speed with your product quickly.
When onboarding emails do their job effectively, your product will become part of the customer’s daily workflow. Before long, users won't be able to imagine going through their day without using your product.
Increasing the amount of revenue you generate from an existing customer is much easier than finding a new customer, so retention is key to increasing your customer lifetime value. Keeping up with the basics - like regularly eliminating bugs and introducing new features is not enough to keep users. You also need a retention strategy supported by regular emails. To make the most of your retention emails, target them to customers at risk. For instance, you might focus on customers who have not logged into the product for more than 20 days. When customers go for long periods without using your product, they are more likely to cancel their accounts. Fortunately, email can help you renegade these disinterested customers from canceling their accounts.
Many SaaS companies rely on credit card payments. While a credit card is hard to beat for convenience, it is vital to be prepared for what can go wrong. For example, when a customer’s credit card expires, the payment will fail, and their account may be suspended. Some payment processors like Stripe will help to detect and prevent some credit card payment problems. However, you cannot rely on a third party entirely for something as crucial as payments. Instead, create one or more emails to customers to be sent to customers when they have a payment problem. Don’t give up on a customer just because they had a single payment problem. With a few emails to nudge them in the right direction, you can retain more customers.
There is also an opportunity to increase revenue with your retention emails by developing an upselling strategy. For example, many B2B SaaS companies use a “land and expand” strategy where they sign up a few users in a company and later expand to other departments of that organization. Retention emails can support this strategy by offering users additional features and features if they upgrade to a larger enterprise plan. Further, retention emails can upsell customers if they need more features (e.g., access to more storage, custom development resources, or white labeling). As with other emails, relevance and context matter for upselling emails. It probably doesn’t make sense to send an upsell email if a customer has only used the product for a few days. After a few months of heavy product usage, it is a different story entirely.
Increasing customer retention ultimately makes it much easier to scale your company. In the SaaS industry, experts like ProfitWell generally recommend aiming for an LTV: CAC ratio of 3:1. Let’s illustrate that ratio with a simple example. You sell a product that costs $100 per month, and it costs you $500 to acquire a customer. In this case, your customer acquisition cost is $500, and your customer lifetime value should be $1500. If the customer lifetime value is less than $1500, it will be more difficult to achieve fast growth. Should customer lifetime value fall to $500 or below, your company may be in serious trouble.
You’re probably not excited about sending or receiving receipt emails. Compared to marketing emails or retention emails, sending a receipt to a customer isn’t interesting. That is probably why many companies neglect the opportunity to make the most of receipt emails. Here’s the reality - receipt emails tend to have very high open rates. If your receipts have errors or miss key data points like taxes, many business customers may get annoyed with you. Start by getting the necessary details of receipt emails correct like customer name, account, the amount paid, plan type, etc. After these basic details are managed, you can experiment with additional optimization opportunities.
Receipt emails tend to have a very high open rate. That means they are an excellent place to include the occasional call to action. For example, you might invite users to an upcoming conference or announce a new feature. With this approach, it is a smart idea to include a PDF attachment with a traditional receipt, which customers can file as needed. As an alternative, you can provide a link to your account or billing page where customers can download receipt data. Getting the details right in receipt emails is critically important, so spend time reviewing these emails for accuracy.
You can also use transactional emails to encourage prospects to upgrade. You might see that a customer is using 95% of the capacity on their current plan. In this case, including a link to upgrade their account to an unlimited enterprise plan makes sense. If you do make a pitch with transactional emails, keep it light. The vast majority of receipt email content should focus on the fundamentals of providing a receipt.
It’s time to get to work! Use the following checklist to create the initial set of emails you need to start your growth. Don’t expect to have perfect emails on your first attempt. Instead, regularly review and optimize your emails to improve their performance.
Use the following principles to create a solid welcome email.
• Welcome the user. Make a positive first impression by welcoming the user to your company. A positive opening sets the tone for your relationship with the customer. For example, you might thank the customer for giving your free trial a chance. If your brand is playful or light-hearted, add a touch of fun or whimsy to your welcome emails.
• Give the user a simple action to take that can be completed in 5-10 minutes. This action should give them a small, straightforward, quick win with your product. The action should be easy for a complete novice to complete without external help.
• Invite replies. Encourage users to reply to your welcome message by asking questions or seeking their feedback. Engaging users in a conversation improve your email deliverability and gives you the chance to answer questions.
Build on your welcome email by creating an onboarding sequence. The extent of your onboarding sequence will vary depending on the complexity of your product. As a rule of thumb, create at least three onboarding emails. Sending an onboarding email every few days during a free trial allows you different opportunities to introduce key features one step at a time.
• Personal introductions. Introduce your company to the user. This is a great moment for your founder to share part of their origin story and why they created the company. Before you hit send on this type of email, take a moment to connect the email back to the customer. Why should they care about your story?
• Feature walkthrough. In this onboarding email, you invite the customer to get their hands dirty with your product. Using a new product is an intimidating experience. Address this concern right up front by showing the user where they should focus their attention. In this context, focus the user on the core functionality of the product.
• Share a case study.Convincing a user to spend time learning how to use your product can be challenging. Fortunately, you don’t have to make the case alone. Once you have a few happy customers, interview them to create case studies or short quotes for your emails. If a customer hears that a user at Salesforce or Oracle saved $10,000 by using your product, that example might inspire them to finally use your product. When possible, make the case study example relevant to the customer. An Oracle case study might be impressive to a Fortune 500 user using your enterprise plan. The same case study might be less relevant to a startup customer using your entry paid plan.
For companies that offer a free trial, this step is your first selling opportunity. A trial upgrade email needs to practice the fundamentals of good copywriting.
• Talk About Benefits, Not Just Features. Your features are the product’s technical capabilities (e.g., “it produces near real-time analytics reports every 5 minutes”). The benefit is how that feature makes life better for the person (e.g., “real-time analytics means you can look good by giving your boss a fast answer when she asks for data”).
• Add A Sense of Urgency. Give the user a reason why they should act now to upgrade their account. For example, you might offer a special discount or access to a bonus feature if they upgrade in the next 24 hours.
• Keep Selling On The Order Page. When a user clicks the “upgrade now” button in your email, the sales job is not over. Instead, your upgrade page should keep pointing out the reasons why the user should upgrade.
For companies that offer a free trial, this step is crucially important. Your objective in a trial-ending email is to persuade a user to upgrade to a paid plan. Fortunately, you have an inherent advantage to start from - there is a clear deadline for the user to act. Follow these principles in your trial-ending email.
• Sell The Pain of Loss. In an email we studied from Slack, the company methodically outlined all of the features that would be lost by downgrading to a free plan. That is a good approach!
• Consider Discounts And Special Promotions. Getting a person to pay their first dollar is an important transition point. Once a person becomes paying a small amount of money, it is easier to offer them more later. Therefore, you might consider offering a special time-limited discount in your trial-ending email (e.g., 10% off the annual plan if you upgrade to the pro plan in the next 24 hours).
Failed payments are a fact of life for SaaS companies that rely on credit cards. Rather than lament this fact, it is better to simply prepare for it in advance. A dunning email is a message you can send to customers with a payment problem like an expired credit card or a failed payment.
• Include Specific Details. Unfortunately, many scams on the Internet ask people to “upgrade their payment information.” As a result, sending an email asking a customer to update their credit card may not be perceived as legitimate. There is a solution to this problem. Include specific details like customer name, account number, plan type (e.g., pro, enterprise, etc.) in your email. These specific details send a clear message to the customer that they are looking at a legitimate email.
• Offer a grace period. Turning off a customer’s account immediately because of a payment problem is not wise. Instead, give them a reasonable deadline to update their payment details, like two to three days.
Even if you offer a free trial without requiring a credit card, many people will not sign up. They may not trust you to solve their business problems. It might not be the right time for their buy either. The solution to these problems is to send regular nurture emails so that your product stays top of mind.
Unlike the previous emails discussed above, nurture emails are typically open-ended. For example, many companies send nurture emails every week, every two weeks, or monthly. For now, make it your goal to create your first two to three nurture emails.
• Prove You Understand The Customer’s Problems. Some customers will not give you a chance until you show that you understand their problems. For example, a sale automation app’s nurture email could talk about the pains of meeting quota at the end of the fourth quarter. In the email, provide a short description of existing content you have published, like blog posts or videos, and direct the recipient to read more on your website.
• Balance Sales Pitches And Valuable Information. If your nurture emails are nothing but aggressive sales pitches, you run the risk of having your emails marked as spam. To avoid this fate, strike a balance between sales and valuable content. Generally speaking, spending about 20% of your nurture emails on your sales pitch is recommended. The rest of your emails should offer the prospect valuable information, including the occasional company news (e.g., announcements about new features or integrations).
• Commit To An Email Schedule. Regularly showing up in the prospect’s inbox over time is an excellent way to build trust. Sending emails every week (or monthly) is an excellent way to become familiar. Over time, your company will become seen as more trustworthy by the prospect.
• Offer Exclusive Content. Give your subscribers a reason to keep opening your emails. For example, you might offer an exclusive webinar with a business thought-leader. By limiting invitations to people on your email list, people will look forward to your emails. If subscribers feel like nothing is special in your emails, your email open rates and engagement may fall over time.
You have just learned six steps to creating emails to grow your company. For those of you who are new to email marketing, this might feel a bit overwhelming. There are a few solutions. You can work with a copywriter to create these emails for you. If you prefer to create these emails in-house, check out the rest of the guide below. We include real-world examples of many of these emails so that you can get inspired and start connecting with customers by email.
Ready to boost your growth to a higher level? Welcome to the world of advanced email. Before entering this arena, ensure you have completed and deployed all of the emails covered in the section above. Once those emails are in place, you can start to boost conversions and revenue with these tips.
Keeping customers for the long term is essential to keeping your recurring revenue numbers healthy. Ideally, use your judgment to send emails to customers before they have canceled. Use the following tips to write and time your retention emails.
• Identify “At Risk” Customers. Usually, there are some warning signs that a customer is at risk of canceling their account. For instance, you might review your analytics on the last ten customers who canceled their accounts. In that analysis, you may find that most of those customers had no activity in the product for 30 days before their cancellation. In that case, use product activity levels to time when you send your retention email (i.e., no customer activity for 20 days? It’s probably time to send them a retention email).
• Promote Annual Plans. When customers see a charge hitting their credit card every month, subscription fatigue may set in. One retention solution is to promote your annual plan. For example, you might offer a calendar year-end promotion (e.g., upgrade by December 31st to get 25% off the annual plan).
• Offer Product Help. Your customers may not want to raise their hand and ask for help. Put yourself in their shoes for a moment - they’re trying to learn a new product. They don’t want to look incompetent. Facing struggles when learning something new is nothing to be ashamed of.
Consider sending a retention email to customers inviting their questions (e.g., “Are you stuck? Reply to this email, and we’ll get on a call to help you out.”). You can also provide help in the form of links to FAQs and tutorial videos on your website.
• Make Your Product Easier To Use. For your customers, perception is reality. If customers see your product as time-consuming and painful to use, you have to address those concerns. Retention emails can help address these concerns by offering automation tips (e.g., “here’s how to save 1 hour per week on our product with Zapier”). For enterprise customers, take this engagement a step further - offer to get on the phone with customers and help them use your product.
Even when you do everything right, some customers are going to cancel their accounts. That’s just the reality of running a business. That said, there are steps you can take to regain more of those customers. Here are a few ways you can reactivate past customers and bring them back.
• Apply A Cooling Off Period. If a customer canceled their account yesterday, do not contact them today. Instead, wait at least 1-2 months before you contact them again. In this situation, fast follow-up can hurt you!
• Announce A New Feature or Product Improvement. Customers may cancel for various reasons like finding your product too slow, poor security, inadequate analytics, and more. When you complete a significant product improvement, that is an excellent reason to reach out to past customers. In the case of high-value customers (e.g., Fortune 500s), reference their specific complaints and how you have improved the product when you contact them.
• Get Emotional! When the above approaches don’t hit the mark, it might take some creative risks. Several reactivation emails have succeeded using emotional appeals (“We like you. Do you like us?” or “We haven’t seen you in a while…”). Letting your users know you miss them and welcome them back is well worth the effort.
Without measurement, it is difficult to know if your emails are contributing to your company’s growth. Start by tracking the most common email performance metrics.
• Open Rates. Average open rates vary over time but aim for 15-20%. If less than 10% of your emails are being opened, you might have a more severe problem like being flagged as spam. Note that open rates are an imperfect metric and may not give you precise data. Therefore, it is best to track open rates over time and consider the trend rather than the open rate of any single email.
Writing different email subject lines is one of the best ways to boost open rates. Remember, you can write up to 80 characters in your email subject line.
• Clickthrough Rates. Many, if not all, of your emails, are focused on getting the user to take action by clicking on something. If you send emails with multiple links, understand that users might get distracted from clicking on your primary call to action (e.g., they click on the link to your Facebook page rather than the upgrade account button). Click rates of 1-3% are considered good.
To boost your clickthrough rates, there are a few options. Start by reducing the number of links in your email - each additional link presents a potential distraction. Alternatively, you might emphasize your primary call to action by stating it twice. Many companies do this by showing an “upgrade now” button link several times in their emails.
• Spam Rates. Even if you do everything right, a user can still mark your email as spam. In addition, email platforms like Gmail and Outlook can automatically flag your email as spam and prevent it from reaching the inbox. To minimize the chances of your emails being marked as spam, always include an unsubscribe link. Without this link, recipients are more likely to get frustrated and report your email as spam.
Ultimately, the best way to avoid having your emails marked as spam is to send valuable emails that people look forward to receiving. That’s one reason why sending nurture emails with valuable content is so important. When a recipient is used to getting valuable insights from you, they are more likely to open all of your emails and less likely to report you for sending spam.
• Define Your Internal Email Metric. The above email marketing metrics are commonly found in many tools. However, there is no reason why you have to limit yourself to those measures. Ultimately, you should come up with your own measures about what matters most. Younger companies with few users might prioritize replies from users since every reply may contain valuable feedback. Alternatively, you might set custom metrics for different campaigns (e.g., track signups for your “new feature webinar” across multiple emails leading up to the event).
The downside to creating an internal email metric is that it takes additional time and effort to choose a metric and measure it. For example, if you want to track link clicks to your “upgrade page” as your most important metric, you may need to create a tracking spreadsheet or database to track which emails have successfully driven the most traffic to that page. Once you have a steady flow of people going to the upgrade page on your website, your next step is to optimize the web page further. Testing different prices, headlines, and other changes can help. However, optimizing your website goes beyond the scope of this guide.
Set a reminder to review these email metrics each week. If you find success with certain subject lines and types of links, take note of them and use them again in the future. Finding success in marketing takes a lot of testing, so make sure you keep track of your winners.
Email marketing is a powerful way to grow your company. Unlike other channels, email gives you the ability to deliver the right message at the right time through every step of the customer journey. Starting the process with welcome and onboarding emails brings a new user into your world and helps them achieve a few quick wins. Transactional emails help to maintain the customer relationship. Retention emails can also play a central role in boosting customer lifetime value. For companies that offer a free trial, trial-ending emails have a central role in convincing customers to upgrade to your paid plans.
Creating all of these emails is going to take some work. To help you navigate the process, start with the essential checklist. That six-step process will give your business a strong foundation of emails to connect with new customers and maintain customer relationships. Once you have a solid foundation of effective emails, you can start the process of advanced email marketing. The foundation of advanced email marketing success lies in learning to use email metrics like open rate, clickthrough rate, spam rate, and conversions to make better decisions. By regularly reviewing and improving your emails with data, you can drive more sign-ups and keep increasing your growth rate.
I am the founder and CEO of Messaged, the email marketing automation platform built for SaaS companies.
My email is [email protected] and I am @tldrdan on Twitter; if you have specific feedback or questions related to this guide, I would love to hear from you!
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