CRM & Email Marketing
6 min

Challenger Labs: Do Customer Lifecycle Email Campaigns Significantly Impact Conversions Across the Funnel?

regan colestock headshot Regan Colestock Associate Director, Email & Lifecycle Marketing
Challenger Labs are how we make sure we’re constantly challenging the status quo for our clients through rigorous testing and retesting of our assumptions. We deliver those in-depth findings directly to our clients through a monthly newsletter to help them identify the right strategies to drive performance.

Today, we’re shining the spotlight on customer lifecycle email campaigns, and their overall impact on driving deeper engagement and higher conversions across the funnel.

We analyzed proprietary data from clients across various industries to uncover whether sending targeted batch emails at specific customer lifecycle stages effectively drives new, lapsed, and active audiences toward purchase. 

THE QUESTION: Do batched emails segmented by customer lifecycle stages have a measurable impact on conversions?

New leads are onboarded with a warm, personalized welcome message. Site visitors receive post-browse nudges or cart reminders paired with an intelligent cross-sell, while active customers get the transactional info they need, plus helpful how-tos and repurchase suggestions.

But what about the people who haven’t tripped a trigger recently?

Odds are, many of them are still interested in hearing from you. You may even be manually deploying batch emails to these large groups at a planned cadence to update them on new products, showcase seasonal collections, sharpen interest through content marketing, etc.

While this is a good start to building a strong email marketing foundation, don’t ease up just yet. The tricky thing about those batch email campaigns is that they can slowly lead to significant performance issues when you stop paying close attention to them.

Unlike automated email triggers (i.e. your welcome, re-engagement, and post-purchase series) where engagement is more likely to be naturally high, batch emails are hitting a somewhat less qualified audience. 

Enter data-driven lifecycle email campaigns.

These emails consider and address each stage of the buyer’s journey—from brand awareness and engagement to purchase, post-purchase, and so on—guiding and nurturing customers through specific milestones in the marketing funnel or brand relationship.

We set out to see if this strategy could have a significant, measurable impact on conversions, retention, and customer lifetime value (CLV).

THE HYPOTHESIS: Customer lifecycle email campaigns can increase the likelihood of purchase for all types of audiences

Automated emails serve a functional purpose by responding to very recent behavioral signals. With traditional batch emails, however, you’re taking a shot in the dark by making the assumption that X content will be the most relevant to Y audience, without considering each customer’s unique behavior, preferences, and individual needs.

What are they doing or not doing? Are they abandoning their carts, making frequent purchases, visiting frequently without buying anything, opening and clicking all marketing materials, subscribed but not engaged?

If you want to truly put the customer at the heart of your email marketing strategy, your batch emails should take advantage of lifecycle automation as much as possible so you can send personalized, ultra-relevant messages to the right audience at exactly the right moment.

We hypothesized that leveraging lifecycle emails to effectively address your audience’s specific needs as they move from prospect to subscriber to loyal customer will help your business drive higher overall conversions and achieve meaningful growth across the funnel.

THE TEST: Deploying batch emails to four key lifecycle-based segments

We examined two different client accounts for a two to three month period that ran batch email campaigns at specific customer lifecycle stages.

Each client offers recurring subscriptions for their core line of products, so we split their email subscriber lists into four lifecycle-based segments: 

  1. Prospect: has not purchased
  2. One-Time: has purchased but not subscribed
  3. Active: is an active product subscriber
  4. Lapsed: has canceled a product subscription

We used the same type of content for each batch email send across both client accounts to get a more accurate picture of performance, then repeated these split sends for many different campaign types during Q1 of 2021 to confirm significance.

The following are some common email types we tested throughout the funnel:

  • Blog/Content Campaigns (Top of Funnel)
  • Product-Centric Campaigns (Mid-Funnel)
  • Discounts and Special Offers (Bottom of Funnel)

The results were not what we expected.

THE RESULTS: What were the effects of deploying lifecycle email campaigns?

For both clients, active product subscribers had the highest engagement with campaigns of all types. Despite already receiving regular product deliveries, these audiences were consistently the most likely to open and click. 

But they were at the bottom of the list for new conversions.

Our next best engagers were in our one-time group: customers who had made at least one purchase but never subscribed. For all campaign types, they had solid opens and clicks, and, most importantly, the top conversions out of any cohort.

Prospects and lapsed subscriber audiences showed similar engagement levels. Their open and click rates were neck and neck, with new prospects barely beating out lapsed customers. As for conversion rates, our tests revealed varying results: prospects showed higher rates of conversion for one client, and lapsed for the other. 

THE LEARNINGS: Should your brand utilize lifecycle-based segmentation in your email strategy?

What do the results of our Challenger Labs test tell you about how you should steer your email marketing strategy in 2021? Here are our top recommendations:

  • Active product subscribers will act on their interest in your brand, and are most likely to continuously engage in the long run, but re-selling to them may require taking a different tactic altogether.
  • One-time customers are prime candidates for email outreach. They’ve demonstrated interest, stayed curious about your brand, and have the most potential for re-selling—whether it’s through another one-time purchase or an upgrade to a subscription.
  • Prospects and lapsed audiences are less qualified. Either they are less likely to sustain interest or they have a wider range of interest levels as a cohort—or both. This impacts both their engagement and conversion rates, and indicates that more advanced segmentation is needed for these groups.

Learn how to resolve four critical marketing paradoxes that hurt marketing performance with new guidance from Google, Michigan Ross School of Business, and Wpromote.

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