3 emails to increase customer lifetime value

How to Increase Lifetime Value with 3 Emails

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Oftentimes marketers get so focused on user acquisition that they forget about the denominator of their acquisition metrics.  By increasing your  Lifetime Value (LTV), you can afford to spend more money acquiring new customers and increase your margins.

At Code School, we face a different challenge than most SaaS companies, which has caused us to think a lot about increasing LTV. Because we are a content company, and one with less content (but higher quality) than our competitors, we have to continually give users a reason to continue their subscription each month. Most of this is done by adding a layer of context around courses or groups of courses.

User onboarding has also been a huge part of our email strategy and allows us to build some of this context in early on in our relationship with customers. Samuel Hulick has built a tremendous resource breaking down popular products’ onboarding flows, which was really helpful for us.

While on boarding is undoubtedly essential, I’ve found even easier ways to attack LTV. With three emails, you can improve your LTV almost instantly.


Dunning emails help ensure that expired credit cards do not cause customers to leave your service. Since the average credit card expires every 3 years (36 months), you can conservatively estimate that 3% of your customers cards will expire each month. That isn’t taking into account folks that lose their credit cards and request new ones.

Let’s say you have 1,000 customers and your product costs $99/month. If 3% of those leave because of a preventable error, you could be missing out on $2,970 each month. Fix it, yo.

If you use Stripe for payments, there are services like Churnbuster that help you quickly launch dunning emails and notifications. If you want to go the manual route, that’s easy enough too.

This is our flow at Code School that we send through Mandrill:

  • Email #1 – 7 days before credit card error
  • Email #2 – 1 day before credit card error
  • Email #3 – Immediately after first failed charge attempt
  • Email #4 – Immediately after second failed charge attempt
  • Email #5 – Immediately after third failed charge attempt
  • Email #6 – Final notice before subscription cancellation

Based on what we know about our open rates, this flow attempts to ensure that each user sees at least 2 emails in the dunning flow.

We’ve just recently launched this but have been blown away by the results. We are currently seeing a 75% resolution rate.

Annual Subscription Upsell

This is a such a quick win, and very few companies do it. Oftentime companies push for an annual subscription during the signup process, letting users still upgrade later on.

I personally believe that users will be more likely to upgrade to an annual subscription once they’ve become comfortable with the product. Very rarely are users going to commit to a year and the cost associated with it right after they meet you.

Instead of just sending the yearly upgrade email using a timed sequence, try to send it after a user has completed an I LOVE THIS action. Catching them at a happy time with your product will increase the likelihood that they take you up on the offer.

At Code School, our I LOVE THIS action would be after completing a course, so we send an email 1 day after their first course completion. Maybe yours is after they edit their first video or create their first campaign or follow their first friend. Whatever it is, figure it out, and tie it to your annual upgrade emails.

Better Receipts

Ryan Hoover of Product Hunt wrote a great post on how startups miss the boat on email receipts. Each month SaaS companies send out receipts to each one of their customers, and very rarely do they use them for anything other than ho-hum payment information.

Here’s a great example of a email receipt from Creative Market that features product suggestions underneath the main content :creativemarketemail

Since we’re talking about LTV, here are a few more ideas.

  • Include one FAQ or little-used feature each month.
  • Show pending actions or to-dos.
  • Have a link to upgrade to a yearly subscription.
  • Include a referral link for users to invite their friends.
  • Show content recommendations.
  • Display how much they’re using your product to justify the price they’ve paid.

At Code School, we’re currently experimenting with our receipts by adding in course recommendations for their next month, as well as a “progress report” of courses completed in the previous month.

Email is a great tool for extending lifetime value and decreasing churn. If you have any other emails to add to the list, let me know in the comments.


Published by

Corey Rabazinski

Corey is a digital marketer based in Orlando, FL. He has helped grow products like Code School and has taught over 12,000 people AdWords and Analytics through his online courses and books.