How to Reduce Newsletter Unsubscribes: Strategies to Retain Customers and Build Loyalty

Did you know that acquiring a new customer is five to seven times more expensive than retaining an existing customer? This is stated in almost every article about loyalty strategies. In Netpeak's experience, the same rule applies to newsletter subscribers. On average, keeping a contact active in the database will cost a company seven times less than acquiring a new subscriber.

In this article, I'll talk about the top reasons people unsubscribe, ways to increase email campaign performance, and how to enhance email newsletters to help retain customers and improve brand loyalty.

Customer retention in numbers

Let’s start by taking a look at some statistics about the importance of retention marketing.

1. Small businesses get up to 35% of their revenue from their 5% of most loyal, repeat customers.
2. Loyal customers spend 67% more than new customers.
3. Approximately 33% of customers will leave if the brand lacks personalization.
4. The loyalty management market is estimated at $6.47 billion and is expected to reach $28.65 billion by 2030. The compound annual growth rate is approximately 23.7%.
5. Up to 50% of marketers consider brand loyalty one of their primary content marketing objectives.

Numbers speak louder than words. These metrics make it easy to see how painful it is for a business to lose customers.

It's also easy to correlate purchases and emails: according to the seven-touch theory, a customer must contact a business an average of seven times before completing a transaction. Retention marketing with emails, messengers, and app notifications is the best way to do this. 

Therefore, each unsubscribed customer should be considered an indirect loss to the business, albeit an indirect loss.

The relationship between retention and loyalty

In business, loyalty programs are often used as mechanisms to encourage repeat purchases. In a broader sense, referral programs, cashback systems, bonus rewards for purchases, and other tools to attract users are only part of organic loyalty.

Misunderstanding of these concepts can lead to misuse of the advertising budget. Instead of working on fostering true loyalty, the brand implements more “push” mechanics to get customers to make a purchase; this obsessive approach will do nothing more than annoy and alienate potential customers.

A truly loyal customer is one who: 

• Shares the company's values and mission; 
• Identifies with the company; 
• Feels involved in the company's social positioning. 

These users become brand advocates: their choice of product or service is based on much more than price and the number of bonus points they receive from the purchase. Even if competitors offer cheaper products, brand loyalists will not be tempted to switch.

The easiest example of such loyalty is Apple customers. There is no need to explain how passionately iPhone owners defend their commitment to the brand and the message it conveys. Plus, it's not as if Apple's competitors offer an inferior or overpriced alternative. The secret to user loyalty lies in positioning.

Remember the basic requirements for business products and services: a good product and top-notch service.

Without a quality product and thoughtful service, no amount of talk about the brand's mission will make a difference. 

Now that we have talked about the importance of fostering loyalty, let’s discuss how to increase the organic part of loyalty using email newsletters.

Unsubscribe rates for different marketing segments

The number of unsubscribes is reflected in the unsubscribe rate, which is measured as a percentage. This metric is calculated using a simple formula: 

For example, if there are 100 unsubscribes for every 2,000 emails sent, the unsubscribe rate is 5%. This number is likely to alarm any marketer, as the normal or average unsubscribe rate is up to 1%. If a large percentage of your users are unsubscribing from your emails every time, I suggest you change your marketing strategy.

Average unsubscribe rates by industry from GetResponse:

• Agencies, automotive: 0.15%
• Arts and entertainment: 0.14%
• Communications: 0.07%
• Education, health & beauty, legal, real estate, technology: 0.12%
• Financial services, non-profit organizations: 0.09%
• Healthcare: 0.16%
• Internet marketing, retail, sports and outdoor activities: 0.11%
• Publishing and travel: 0.1%
• Restaurants and food: 0.17%

Average unsubscribe rates by region:

• Oceania: 0.17%
• North America: 0.09%
• Europe: 0.13%
• Africa: 0.08%
• Asia: 0.06%
• South America: 0.1%

Why do people unsubscribe from emails?

In general, unsubscribe reasons can be divided into two categories: personal reasons that are independent of the sender and reasons that are directly related to the sender. 

If someone unsubscribes for personal reasons, changes in retention marketing strategy are unlikely to help retain or even bring back a subscriber. For example, they may have unsubscribed from the brand's newsletter due to a move or change in circumstances.

If the subscriber left because of factors related to the sender, you need to work with the reasons for unsubscribing. And to do that, you need to at least give the subscriber the opportunity to tell you why they are unsubscribing. Most of the time, people want to unsubscribe for one or more of the following reasons:

1. They receive emails too often, which causes irritation. The user will unsubscribe even if they really love the brand.
2. The emails are dominated by promotions, and obsessive sales pitches look like spam.
3. The content of the emails is irrelevant, not useful, or not in the reader's best interest.
4. Low-quality emails. Typos, broken layouts, lack of mobile responsiveness, and poor design will drive subscribers away.
5. Impersonal newsletters. “Hi” emails and newsletters that are not tailored to the consumer's preferences indicate a lack of knowledge about the customer's needs.
6. The subscriber didn’t actually consent to receive emails.
7. The unsubscribe button was accidentally clicked.

How do you create a newsletter that people won’t unsubscribe from?

The answer is simple: start by studying your subscribers, their needs, and their pain points. Then, formulate and test hypotheses, and be sure to analyze the results. Break everything down into actionable points that will reduce unsubscribe rates and increase customer loyalty.

Segment your audience

A customer will stay with you as long as your product or service meets their needs. To keep it relevant, study your subscribers' interests, tastes, expectations, and habits. With this information, you can segment your audience into groups with similar behaviors or characteristics and send each group the most relevant content that matches their interests.

Parameters for audience segmentation

1. Demographics: gender, age, marital and family status, and location. Send users relevant local offers, split promotions into different gender options, congratulate users on their birthdays, and offer seasonal products. You can collect this data from subscription forms and personal accounts.
2. Website, app, and newsletter behavior: visit frequency, browsing history, purchase history, and purchase amounts. Use Google Analytics to analyze page opens, clicks, link clicks, page views, and page saves. This will help you set the necessary triggered email chains and drive the subscriber to perform the desired actions without being too pushy.
3. Hobbies and preferences: active or passive recreational activities, field of work, pets. Find out what your audience likes by analyzing views, clicks, and purchases.
4. Customer lifecycle stages: subscription, brand awareness, consideration, cart abandonment, further payment, repeat purchases. Send newcomers information about the company, the best blog articles, educational emails, and reviews of popular products. Offer a discount or bonus to those who browse your emails or add products to their cart but don't buy. Similarly, offer a discount on their next purchase to those who have already paid for the order.

Personalize emails

The easiest way to personalize your emails is to address your subscribers by their first name. Emails with a personalized subject line are more likely to be opened, and in the long run, this type of communication creates more opportunities for a deep personal connection between the reader and the sender.

Another way to personalize is to use dynamic content that is created based on user behavior and interests: purchase and browsing history, adding products to favorites, and discounts on products in the shopping cart. Triggered email chains are particularly useful here:

1. Inform users about discounts on products they were interested in.
2. Recommend products similar to those they have seen.
3. Notify users when the products they want are back in stock.
4. Alert users to an upcoming price increase on their favorite items.

Another way to personalize your emails is to congratulate your readers, not only on common or personal holidays like New Year's Eve or birthdays but also on dates that tie you together. 

For example, prepare an email for the day the customer signed up for a subscription, remind them of the anniversary of their first purchase, or congratulate them on their order anniversary. This shows that you are not just selling products but creating a real history of the relationship between the brand and its customers.

Create relevant and varied content

Work on the content of your newsletter. Your subscribers should receive only content that is relevant to their interests: this is the only way to ensure that emails are opened regularly and that targeted actions are taken.

How can you effectively do this?

1. Use multiple content formats, including informational, promotional, and educational content. Compare products, show reviews from other customers, and immerse the user in your product. And don't forget to use different forms — photos, videos, GIFs, and situational jokes where appropriate will help keep users engaged.
2. Make exclusive offers, especially if you announce a subscriber-only newsletter in the subscription form. In this case, make sure that email promotions do not appear on your website, app, or other communication channels.
3. Inform them promptly about changes in the service or, conversely, that everything continues to work as it should. For example, if social networks are down, remind them to order through the website. Tell them about the cancellation of commissions, announce the introduction of new features in the app, and share news about new payment methods. In short, keep your subscribers in the loop.
4. Provide customer value. Go beyond offering advice on how to use products. For instance, you can tell stories about how they were made, suggest ways to combine them, and answer questions about your products. This will help close the distance between the brand and the customer and further enhance the user experience.

Onboard during subscription

Think of a new subscriber as a friend’s relative who is attending a party at your house for the first time. Don't leave them alone in an awkward situation; give them a tour instead, and tell them where things are and what they can do.

1. Include key information about your site's sections, benefits, delivery terms, and guarantees in your email chain.
2. Teach customers how to understand and use your product or service, especially if you work with B2B or complex online services.
3. Tell them about your pricing and your best-selling items. Help a newcomer to understand everything easily, and give them a good impression of your work.

Collect feedback

One of the easiest ways to find out if your subscribers like your newsletter is to ask for feedback directly in the emails. You will also learn how to improve the quality of your content for each individual subscriber.
Make it a rule to periodically send an NPS survey to your subscribers. You can do this in an email or by directing readers to Google Forms and specially designed landing pages.

1. Collect data on subscriber interests for organic segmentation.
2. Ask viewers of webinars and online events if they learned anything new.
3. Ask users of free product trials to share their opinions and future purchase intentions.
4. Finally, ask customers for feedback on product quality and service.

Add gamification

Entertain your newsletter subscribers with interactive elements, such as games, puzzles, tests, or quizzes. The ideal option is a gift at the finish line: a promo code for a discount, access to a landing page with exclusive offers, or a bonus on their next purchase. 

However, in the context of building organic loyalty, even gift-free gamification, if done well and sincerely, will be remembered and leave positive emotions.

Use games as a way to diversify your communication with customers and add an element of novelty, fun, and care. After all, not every email campaign has these components, so why not stand out from the competition?

Use chatbots

Use automation, such as chatbots, to elevate email campaigns. This will give your content a high level of personalization and relevance without a lot of manual work. 

Set up a robot that can handle the most common customer requests and prepare an email announcing its launch. Let your readers know how the bot will help them, and add a link to it in the email footer, where you would include social media links.

Since most emails are mostly about the business and only occasionally invite readers to ask questions or share their opinions, chatbots will add a sense of dialogue to your emails. They allow your subscribers to get standardized answers to their questions all hours of the day without having to wait in line or call a hotline. This will be another brick in building brand loyalty.

Optimize your email frequency

Getting too many emails is one of the most common reasons people unsubscribe from emails. And it's also one of the most vague and unclear recommendations for increasing loyalty, because there is no specific and universal formula that will help you not overdo the frequency of sending emails.

According to GetResponse, 46.19% of marketers take the safe route and send only one email per week to subscribers. Others send up to 16 emails per week. 

The paradox is that the highest unsubscribe rate is for the “safe” one email per week. 

Emails sent once a week have an unsubscribe rate of 0.21%, while the lowest unsubscribe rate of only 0.05% is for 14 emails per week.

These numbers should not be taken as a rule: they only show the variety of options for different industries and segments of the base. The most important and only real advice for optimizing your email frequency is to study your audience and test the theories that work best for your business.

Choose the best time to send emails

According to the same GetResponse study, the unsubscribe rate is independent of the time of sending and remains the same no matter what time you send your emails. 

However, time plays a bigger role in other statistics, such as open and click-through rates. Here, you should follow a simple logic: if an email notification wakes a subscriber in the last hours of their morning sleep, they are more likely to unsubscribe than if the same notification is sent in the afternoon or evening.

Be sure to consider the time zone difference with certain segments of your database, if any. Also, consider your subscribers' daily routines.

For example, it's better not to send emails to young parents in the morning; they may be busy with household chores or taking their child to kindergarten. Send it later so that it is more likely to be opened during a potential “quiet hour”.

Set clear CTAs

Many emails lack a clear call to action: when the recipient closes the email, they don't understand why they opened it in the first place. To avoid this, follow a few simple rules.

1. One email should have one call to action. This rule is considered the gold standard of email marketing, but the main CTA can be supplemented with secondary CTAs as long as they don't lead the user in opposite directions.
   
   For example, if your email introduces a discount on a service or product, reinforce the main message with an additional one and invite the subscriber to check out all current promotions. But if you want to ask the reader to sign up for a webinar, do it in another email.
2. Use active verbs. Urge your subscribers to take the targeted actions using a polite and inviting tone, not a commanding tone.
3. Don't force the user to scroll down the email. State the main point of the email at the beginning, and let them immediately get to what they are interested in, for example, by clicking a button on the banner or on the banner itself. And for those who read the entire email, add another button at the bottom of the email so they don't have to scroll up.

Set up trigger email chains

Yes, you can use trigger emails for more reasons than mentioned above in the section on personalizing your emails. In fact, you can use any event, including user inactivity, as a trigger to send emails with useful reminders and notifications.

Take advantage of reactivation mechanisms for reads, visits, and purchases. If you offer a service, use trigger emails to remind service subscribers of upcoming payments.

Another way to use them is to send emails encouraging customers to return to the site and complete unfinished actions, such as purchasing a product they had added to their cart.

Targeted email folder for newsletters

Every business wants its emails to be seen by as many people as possible. Some marketers overuse this idea and try to send all emails to the main section of the user's inbox.

However, this strategy often leads to an increase in unsubscribes and spam complaints because not all of your emails are as important to the user as messages from their colleagues and friends.

Many of your subscribers unsubscribe because your emails end up in the Primary folder of the inbox instead of the Promotions folder.

The solution: To avoid annoying users with your promotional emails, it's better to choose the Promotions section as the target folder for their placement in the subscriber's inbox. Reserve the Primary folder for emails that the user would definitely want to see: order status triggers, transactional emails with financial transactions, and greetings.

This breakdown will help users visually reduce the number of unread emails and avoid the pressure of a full inbox. As a result, they will be more open to reading your emails.

Unsubscribe users properly

If a subscriber has already made the decision to leave, try to keep them. Let them know you regret their decision or briefly remind them of the benefits of subscribing.

Another option is to offer to send them only emails that interest them, or to change the frequency of the emails. This can work even if the user went through a similar segmentation during the subscription process: their preferences may have changed, and the categories of emails that were interesting to the person became irrelevant over time.

In addition, ask the subscriber why they unsubscribed, or ask for advice on how to improve the newsletter to make it interesting again. It doesn’t guarantee that the user will necessarily help you improve the newsletter, but a certain percentage of those who unsubscribe will explain why they made this decision. Your task is to take this information and use it to change your communication strategy to reduce the unsubscribe rate.

Things you shouldn't do when unsubscribing readers

1. Don't be tricky with the unsubscribe button. Don't hide it in invisible parts of your email, and don't make it transparent.
2. Don't complicate the process. Don't make the unsubscribe survey mandatory, and don't make it too detailed.
3. Don't force users to log in to unsubscribe.

Analyze and track results

The effectiveness of any strategy can only be tested by putting it into practice. Keep an eye on the statistics and carefully track key email metrics: open rates, click-through rates, unsubscribes, and spam complaints. 

Monitoring and analyzing these metrics is crucial for evaluating the effectiveness of email campaigns, especially when making changes. Simply put, look for fluctuations in the statistics after each change, and compare different segments of your database to get a more accurate understanding of the data.

Apart from analytics, be sure to pay special attention to the reasons people give when unsubscribing. They will tell you more about your newsletter's weaknesses than statistics.

Finally, don't forget the most important rule.

Your newsletter should grow and change with your readers.

Study your audience in all ambiguous situations (and even in clear ones), and if you put enough effort into it and improve your email campaign according to the interests of your subscribers, they will definitely respond with loyalty.

Conclusions

1. Acquiring a new customer is more expensive than retaining an existing one, making it especially important to retain existing customers and not just acquire new ones. Having a good newsletter will help you do that.
2. Most people unsubscribe from emails for the following reasons:

• The emails are too frequent.
• The newsletter has too many promotions.
• The content of the emails is irrelevant.
• The emails are of low quality.
• The newsletter is impersonal.
• The recipients did not consent to receive the email newsletters.
• The unsubscribe button was accidentally clicked.

3. To avoid unsubscribes, you need to study your subscribers and examine their needs and pain points. Based on your findings, you should develop and test different hypotheses, and analyze the results.
4. Be sure to segment your audience. Personalized emails that address the interests and needs of the recipient will retain subscribers.
5. Send relevant content, and ask for feedback on your services or products. Keep emails interesting by implementing gamification.
6. Optimize the frequency of your emails and the time you send them. Always include a clear call to action. 
7. Remove users who aren't interested in your emails and want to unsubscribe. Don't hide the unsubscribe button.