Why Your Customers Are Leaving You So Soon

By: Aaryn Kobayashi | August 29, 2017 | Artificial Intelligence, Personalization, Retention

First impressions are everything when it comes to messaging today’s consumers.

We are all consumers in some way and thus are all victim to inboxes filled to the brim with promotions, flash-sales, limited-time offers, freebies, and right-now’s. We even tolerate homescreens with rolling notifications causing involuntary eye-rolling at ill-placed emojis and generalized content.

But, remember the good old days, back in the 90’s when you would eagerly wait a full three minutes just to connect to the internet and hope to hear that exciting, iconic sound, “You’ve Got Mail”? People were thrilled to be getting emails! And, less than a decade ago, people were wow’d at push notifications because they were so novel.

Today, both email and push notifications have taken swift downturns in terms of engagement because of marketing monotony. Consumers get desensitized to the barrage of solicitation and learn to ignore messages that do not meet their high bar of relevance. Andrew Chen refers to this development as the Law of Shitty Clickthroughs (his words, not mine) which highlights advantages of being a first mover for new marketing channels and points to the eventual degradation of engagement on these channels.

In their heyday, emails were seeing 90% click-through rates (CTRs) and push notifications were driving 540% increases in app opens. Nowadays, these are the types of benchmarks we are used to seeing:

  • 91% unsubscribe from emails (Salesforce)
  • 60% opt out of mobile push notifications (Kahuna)
  • Over $280 billion is abandoned in digital shopping carts, every year (Google)

We decided to investigate why there was such a steep drop-off in conversion rates for these channels over a relatively short amount of time. We analyzed an aggregate set of customers and looked at which touchpoint had the highest likelihood of negative outcomes (uninstalls, unsubscribes, opt-outs) and exactly which touchpoint generated the most negative outcomes in the brand-consumer conversation. Check out the chart below:

 

3 things you should know about messaging your consumer

What we found is that there is a clear “dating” period and a clear “marriage” period between the first touchpoint and the fifth touchpoint. From the graph above, you can see that the rate of change from message 1 to message 2 is the largest. By the time consumers get to the fifth touchpoint, the rate of change between message 5 and message 10 is significantly lower. Meaning, your first message is like a first date—the consumer will decide on this first message if your brand is resonating with them or not. If you still have your consumer by touchpoint 5, you are likely to have them for life (unless you do something to prompt a “divorce”).

 

Here are 3 things to keep in mind when messaging your consumer:

What message engagement means for you

The steep rate of change between message 1 and message 2 is interesting to see because you are probably thinking about the first message your consumers get from you right now. Most likely, it is a welcome email or part of some onboarding campaign. Now you should be asking yourself, “How useful or interesting is that first touchpoint?” and “Will that message be compelling enough to get my consumers to message 2?”

We’ve seen the market trend toward hyper-personalization and rising consumer expectations. As welcome messages and onboarding campaigns get tired, consumers will begin/continue to ignore this type of messaging. I’m not saying onboarding campaigns should not be a staple in your marketing strategy; I’m saying that they need to be upgraded to a level that is on par with where your consumers are expecting them to be.

How AI can sharpen your engagement rates and retention

Perhaps you’ve already seen signs of degradation in your messaging campaigns or you are tired of checking industry benchmarks to see if other brands are seeing the same poor metrics you are seeing. Marketers must counteract the Law of Shitty Clickthroughs, not by inventing new channels, but by revitalizing existing channels with a new approach. Powering your current marketing strategies with artificial intelligence (AI) has already proven that consumer expectations cannot only be met, but exceeded.

AI has the ability to take that first touchpoint and add in complex layers of personalization for each consumer that can deliver your message as an email for Jill but a push notification for Jim. AI knows to send Jill’s email at 11:53am, right before lunch when she checks her personal email, and at 6:45pm for Jim, when he’s most active on his phone while he waits for his train. AI can also decipher message variants that will increase the likelihood of opens for each individual person because what is compelling and interesting for Jill is different from what is compelling and interesting for Jim even though they are both your consumers.

Final thoughts

As we move into 2018, the steepness of negative outcome rates on the first message will increase which means catching consumer interest on the first message is crucial now more than ever. The pressing need to deliver quality conversational messages across multiple channels and devices is being answered by AI. Thankfully, if you have a complex marketing system in place and don’t know where to start or where AI can fit in, we do. Simply click the button below to request a personalized demo of Kahuna!

 

Sloan

Author: Aaryn Kobayashi

Aaryn Kobayashi is Growth Marketer at Kahuna. Previously, she was flexing her muscles as a digital marketing consultant to stem the hemorrhaging of funds while she traveled across Europe and Asia. Aaryn moved to the Bay Area from San Diego where she was a digital marketing account manager by day and wannabe coder by night. Her interests beyond marketing include power yoga, running on single-track trails, taking conquering pictures on top of summits, and carving up a freshly powdered mountain. Read more about Aaryn on her website aarynk.com where she details some of her travel adventures and coding projects.

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