Inactive contacts in email marketing: Risk for KPIs and costs?

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Are you familiar with the following situation? You haven't visited your private email inbox for a while and have now found the time to clean it up. You open the inbox and see the following image:

many-pictures-in-the-mailbox (1)
This picture may be an extreme case, but you've probably seen something similar before or even experienced it yourself. Now you're faced with a "fight or flight" decision . Which would you choose?

Fight variant : You go through the many newsletters with countless products. See what you need and what you don't, and unsubscribe from the ones you're not interested in. However, this costs you a lot of time and effort. Each email contains a ton of information, both graphic and textual.

There's also a flight option: You select all irrelevant newsletters (since you don't plan on buying anything right now anyway) and simply delete them without reading them. This way, you've cleared your inbox of countless newsletters, since you don't plan on ordering anything anyway. Repeat this process regularly once a week.

Congratulations! If you chose the flight option, you are an inactive contact!



via GIPHY

1. What are inactive contacts?
Inactive contacts in an email marketing list include all contacts who do not respond to the emails they receive.

Similar to the example from the guide, contacts could simply sort through your emails and delete them without reading them. Or the emails could remain unopened in the inbox and simply be moved to other folders. Likewise, recipients could open the emails without any action, such as clicking on a link or purchasing a product. The reasons for this vary, and the example from the guide is just one of them.

As a result, you end up with a newsletter pool comprised of contacts with varying levels of activity and inactivity. If you don't segment contacts, this can quickly lead to increased costs and distorted analytics, which can be associated with incorrect email marketing strategies.

2. What impact do inactive contacts have on the costs and analysis of email marketing KPIs
Let’s start with the problem of analysis .

Inactive contacts continue to receive emails. For this reason, unlike the bounce rate or spam new zealand phone number data percentage of an email, most email marketing tools don't highlight them separately:

email dashboard (1) (1)
For this reason, these contacts remain “undiscovered” because you continue to send your emails to your contact pool and receive information about how many of your contacts X opened/clicked on email A.

Most formulas for calculating email marketing KPIs include the variable "total recipients." This variable includes both inactive and active newsletter recipients, for example:

Open rate = opens / recipients * 100%

Click rate = clicks / recipients * 100%

Now imagine that 50,000 of your 100,000 newsletter subscribers have been inactive for a long time and are lingering in your pool. They're not generating any revenue for your company and are distorting your email marketing KPIs.

If you send an email to all your newsletter recipients and 10,000 of them open it, you'll have an open rate of only 10%. If you were to exclude inactive contacts from your emails (since they won't open the emails anyway and won't generate any revenue), then an email with 50,000 recipients and 10,000 opens would have an open rate of 20%.

Because of the different KPIs, you could potentially make incorrect marketing decisions if you believe your open rate is too low (when it's actually higher). You could also incorrectly calculate revenue per newsletter subscriber and incorrectly evaluate your emails based on that.