U.S. Class Action Lawsuits date back to nearly a century ago, with the first class action taking place in 1925. Yet, little data and research exists for optimizing the delivery of this niche area within marketing.
Consumer perceptions, resources, and biases are not as they were in the 20th century; consumer behavior is continuously evolving. The legal services industry must adapt to this shift in consumer preferences in order to effectively deliver (communicate) information. The basis of this post comes from a comprehensive study on class action notice delivery, focusing on the most effective way to display information to consumers via email.
What performs best in class action emails?
In 2019, the Federal Trade Commission (FTC) published a comprehensive report on Consumers and Class Actions that encompassed a Notice Plan Study as well as an Administrator Study. The Notice Study refers to an internet-based consumer research study to analyze consumer perceptions of emailed class action notices. The methodology for this study is detailed on page 47 of the FTC’s report. The Notice Study evaluated whether certain email characteristics, such as the sender’s address, phrasing of the subject line, availability of payment amount in the subject line, email body format, and the presence or absence of a court seal, influenced respondents’ comprehension, understanding, impressions, and likelihood of opening the email. The results suggest that the most effective way to present the information to consumers is context-specific.
For a visual reference, let’s take a look at a sample email.
How long should my class action email be?
In the context of the class action settlement notice studied, the Notice Study found that a long-format email with formal, legal writing, enhanced respondents’ understanding of the nature of the email; meaning respondents were more likely to understand that the email was associated with a class action settlement or refund, and not a promotional email.
While a long, formal email was associated with improved understanding of the nature of the email, an email with a bulleted list and simple language enhanced the respondents’ understanding of the process to receive settlement compensation (i.e. next steps).
However, the study also revealed that respondents were more suspicious of emails containing bulleted lists, compared to long-format text emails. Therefore, campaigns utilizing the bulleted list format must clearly convey the legitimacy of the class action settlement, as well as the claim process in the email(s).
The Notice Study found that “less than half of respondents understood that the email pertains to a class action settlement or a refund rather than representing a promotional email, and less than half correctly understood the steps required to receive a refund. Significantly, several of these results suggest respondents may view class action settlement notices with skepticism – an area that would benefit from further study.” (Page 2) Considering this finding suggests a lack of public knowledge regarding class action lawsuits, there is a need for administrators to effectively communicate the legitimacy and nature of the class action lawsuit.
What should go in my subject line?
The Notice Study found that understanding of the nature of the email is not positively correlated with open rates. Referencing the class action in the subject line increased respondents’ understanding of the purpose of the email, but resulted in fewer respondents indicating that they would open the email, compared to emails with subject lines that did not include this information.
In fact, emails that omitted any reference to a class action had the highest stated open rates from respondents. This indicates a tradeoff in crafting subject lines – higher open rates or higher level of understanding.
To increase both open rates and level of understanding, we can infer that omitting any reference to a class action settlement in the subject line will improve open rates, and the content within the email must clearly communicate the nature and legitimacy of the email as well as next steps in the process.
Figure 3 reveals that omitting the compensation amount from the subject line resulted in improved respondent comprehension and stated opening rates. Subject lines that contained the name of the plaintiff resulted in higher respondent comprehension but lower stated open rates, with only 26-27% of respondents indicating they would open emails that contained the language “Lavin v. Sonoro Technologies Class Action Settlement” (with or without the refund amount).
The “Notice of Refund” subject line with no specific refund amount stated clearly outperformed the other five subject lines, with 53% of respondents who viewed this inbox scenario indicating they would open this email.
This was the only subject line condition in which the majority of respondents selected the relevant class action email to open when provided all options, and it represents a substantial increase (11 to 27 percentage points) over the other subject lines.
The FTC’s Notice Study serves as a groundbreaking resource and a first step toward revolutionizing class action notice delivery. The study shines light on the need to balance consumer understanding (notice comprehension) with consumer interest (open rates), and communicate the legitimacy of the class action lawsuit to a generally skeptical audience.
Going forward, when composing class action notice emails, keep the following in mind:
- The Notice Study revealed public skepticism regarding class action lawsuits. Class action administrators must effectively convey the legitimacy of the class action lawsuit within the email to consumers
- To improve open rates, omit any reference to a class action settlement in the subject line
- To increase the level of understanding, clearly communicate next steps required for compensation within the email
References: Consumers and Class Actions: A Retrospective and Analysis of Settlement Campaigns, History of Class Action Lawsuits