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Email Best Practices

How to lower your churn rate with email automation

The churn rate is a data closely monitored by marketers. Learn how email automation can help you lower your churn rate and improve your revenue.

Hermes wondering which way to go



Churn rate, or attrition rate, is a marketing concept measuring the average customer life time or your average revenue loss. The churn rate is a closely monitored by data-driven marketers. This is becoming more relevant as digital companies start adopting a SaaS model and every paying customer gains a larger life-time-value.

There are multiple ways to improve your churn: optimization of your funnel, regular updates that will keep your customers aware and stuck to your products, contractual binding periods and so on. Of course, email has a key role to play here; as a personalized communication channel. Thanks to a proper email automation strategy, you'll be able to lower your churn rate considerabily! Here's how:

First, how do I measure my customer churn rate?

To calculate your monthly customer churn, substract the number of users you had at the beginning of a month by the number you have at the end of it. Divide that result by the number of customers you gain at the beginning of the month. Here is your churn rate. If you had 1000 customers on January 1st, and only 900 on January 31st, your churn rate is (1000-900)/1000 = 10%. This means that on average, your customer life time is around 10 months. In other words, the lower your churn rate, the better your engagement and, hopefully, the higher your revenue.

Note that if your churn rate is negative, this is a good sign for your company, meaning you're gaining new customers as you go forward, which can lead to higher revenues and profit.

How can email help?

As mentioned earlier, there are multiple methods to lower your churn rate. Obviously, you want to prevent any revenue and customer loss, and during the process be as resourceful and cost-effective. That's why email automation is a great way to spot and address the different pain points your customers may have, increase their life time spend, and in the end lower your churn rate.

In a study published in 2013, Email Institute showed that automated emails generated open rates 72.6% higher than standard marketing emails, and an impressive 152.3% higher rate for clicks. These figures are still seen today, and with engagement this high, can you afford to overlook email marketing automation?

To lower your customer churn rate, rely on a good onboarding workflow, to present all the advantages of your product and services to the newcomers as they sign up. Anniversary emails, product recommendation and service updates or re-engagement emails are all messages that you can schedule to send over time to better engage with your users, remind them of your offerings and even transform them into brand ambassadors.

On the revenue churn rate side, studies have shown that emails automatically sent after a user abandoned his or her cart, generate a 50% lift in revenue. If you see that the number of abandoned cart emails grow, it can also mean that your purchase workflow can be optimized.

In the end, automated email workflows are here to ease your life and improve your customer retention. So don't forget to integrate them into your global marketing strategy from the start and optimize this workflow as you evolve and grow.

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