The Costly Mistake of Collecting Emails Without Relevant Data

– The brand collects email and phone number data during sign-ups, but it does not collect any relevant data about the customer journey.
– Approximately 50% of people drop off after giving their email, creating a friction point and potentially losing potential customers.
– The brand is unaware of the cost of collecting emails and the potential opportunity cost of inactive subscribers, highlighting a lack of understanding of unit economics.Rethink the way emails and data are collected to ensure they are relevant to gaining customer insights.Me: Do you collect data during sign-ups?
Brand: Yeah, we use a two-step process. People give us an email, and then we ask for a phone number too.
Me: How many people drop off after giving you an email?
Brand: Around 50%.
Me: So you’ve created a friction point for 50% of the people who signed up using your form for a discount or offer without collecting any data relevant to their customer journey? Also, that means that 50% weren’t shown a code on the page and were pushed back to their inbox instead of receiving the promo code and being allowed to keep shopping, right?
Brand: Ummmm…
Me: So the email that you collect, how much did that cost you?
Brand: I’m not sure.
Me: Did you know that, on average, 25% of your list will become inactive this year?
Brand: Really?
Me: Yup. So, for example, if your list is 100,000 people, you’ll have about 25,000 who become inactive. If each of those costs you $10, your opportunity cost is about $250,000 per year.
Brand: What?!?
Me: So you’ve just created friction for 50% of your visitors by asking for more personal information before building a relationship with them and before they purchased anything. What do you think that will do to your churn rate from an experience perspective?
Brand: Ummmm…
Me: So maybe we should rethink the way we collect emails and data to ensure they are relevant to gaining customer insights?
Brand: I’m going to have to think about this.


So here’s where things get interesting and uncomfortable. The people running a brand’s marketing team and outsourced agencies lack a foundational understanding of unit economics. The people above them have no idea about customer acquisition costs other than what is reported to them, and CMOs are pretty selective in only focusing on positive numbers (I know I’ve been yelled at for sharing risks in weekly meetings because, you know, company morale *rolls eyes so hard that he nearly passes out*).


But hey, I get that you need to keep thinking about this. It makes complete sense… keep those positive weekly updates coming and ignore the larger issues at play. Costs aren’t going down.

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