4. Metrics: Next Generation Email Metrics & Analysis
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4. Metrics: Next Generation Email Metrics & Analysis
- 1. Next Generation Email Metrics & Analysis
- 2. Digital Messaging Channels Continue to Proliferate
- 3. So What’s Worth Measuring in Email?
- 4. Four Categories of Meaningful Email Metrics Process Metrics • Delivered, opens, clicks, conversions, (Email Diagnostics) unsubscribe requests • Forwards, shares with social, cross-channel Influence Metrics conversion • Questions, complaints, critique, frustration, Feedback Metrics problems, praise • ROI, AOV, LTV, Share of Customer, Contribution Metrics Measurement against business objectives
- 5. #1: Utilizing Process Metrics Old New Rule Measure by Campaign/Program NEW New Rule Measure by Subscriber Lifespan
- 6. Three Views of Process Metrics • By Campaign or Program (Point-in-time aggregate response) • Allows for apples-to-apples performance comparison across different campaigns or programs • Assess subject line, offer, creative, landing page performance • By Segment • Allows for apples-to-apples comparison of response history across different subscriber groups • Trend analysis of response actions by different group segmentation • By Responder History • Frequency distribution of openers, clickers, converters, repeat customers • Identifies responder engagement levels, gaps, clusters
- 7. Response Analysis by Segment Source Date • Is a particular name source • Are newer or older yielding more responders? subscribers or buyers Better responders? Which? more responsive? Permission Type Social Media Connections • Is a higher permission standard • Which are connected to you on translating into better response? social media and does that correlate to email response? Purchase Channel • Who is more responsive to email: single or multi- channel buyers?
- 8. Subscriber Engagement Analysis • Is the same small minority repeatedly responding to every campaign? Analyze who they are Objective is to stimulate them to open second time Analyze who they are Are they the same people campaign after campaign, or a rolling population from across the list?
- 9. Take a Longtail View of Subscriber Response • Examine list reach, not just aggregate response rate • Measure cumulative response actions per member over a period of time, and over their lifetimes • Divide list members by response frequency. Examine frequency distribution of openers, clickers, and buyers • Is there good random distribution across your list? • Analyze frequent responders for biased clusters • Goal: Move the needle on less active segments of your list • Focus test efforts here
- 10. Process Metric Key Takeaways • Glancing at a basic report doesn’t cut it anymore – Knowing average open, click, conversion and unsub rates is a start, but you need to go deeper • Use both point-in-time and cumulative analysis – By program AND subscriber (or subscriber segments) • All responders are not created equal – Only through back-end responder segmentation analysis will you find the hidden gems and response hot pockets in your list or customer base
- 11. #2: Measuring Email’s Extended Influence Old New Rule Measure forwards or referrals NEW New Rule Measure integration with social media, cumulative cross-channel effects
- 12. What Actions Does Email Influence? • Forward to a Friend/ Email Pass-along • Share-to-Social • Are you enabling from within your email? • How many people share from email to social networks? Social • Social Commentary/Review Influencers • Ratings • Social bookmarking • Offline actions • Talk about you (WOM) • Shop/buy offline • Attend event
- 13. Active Share Request (from site) • If you need or want to accurately track email forwards, be intentional about it • Invite-a-friend call to action online after sweepstakes and contest entries • Track • # of list member entrants who shared • Total # of entrants • Average shares per entrant • # of Second (and subsequent) generation shares
- 14. Passive/Standard Share Request • Dual share calls to action • Email forward • Share to Facebook
- 15. Managing FTAF • Unique tracking codes are embedded in each link so marketer knows who is doing the forwarding • Email forwards are centralized and controlled via VS
- 16. Managing Shares to Social • Facebook shares can be formulated to pre-populate with preview image, copy and link • Twitter shares are pre-written and the tweet pre-populated into user field
- 17. Comments, Ratings and Reviews • Email subscribers will talk about you online • On your site/blog via comments • Your social media pages • Their social media pages • Other sites/blogs (especially ratings i.e., Trip Advisor, OpenTable) • Email subscribers will rank and favorite your content • Social bookmarking (Digg, Google +1, FB “like”) • These comments, ratings and reviews can positively or negatively impact page views, site visits, and revenue • Who is tracking and measuring these? • You might need social monitoring/listening help • Resources: Radian6, SocialMention, Google Alerts, Hootsuite
- 18. Social Bookmarking Example • Social share button embedded in email newsletter makes it effortless for subscribers to share or rank content
- 19. Email Can Influence Social Bookmarking Rank • Every time someone shares to Digg from your email messages (plus other sources) you rank higher
- 20. Influence Metrics Key Takeaways • Social extends the life and reach of your email – Whether you actively request shares to social or not, your email content, offers, and goofs are more share-able and will be more public than ever before • If you want shares (or viral sharing), be proactive – Always enable and centralize FTAF initiatives – Incent or reward with contests • Listen, measure and monitor carefully – Hopefully someone already owns this task; remember to tie any comments, questions or incremental purchases back to email
- 21. #3: Contribution Old New Rule Count Online Responses NEW New Rule Count TOTAL Responses
- 22. All Responses Not Created Equal • Actions besides conversions (like shares) have measurable value to you • Assign a weighted (monetary if possible) value to each action that is meaningful to your business: • Example: • Share to social = 1 point (or $x) • FTAF = 2 points (or $x) • Landing/Web Site Page View = 5 points (or $x) • New List Subscriber = 7 points (or $x) • Conversion/Purchase = 10 points (or $x) • Count the number of meaningful actions and multiply them by a weighted value or typical cost to generate for a truer look at the total value of each campaign
- 23. Counting Total Responses Total Campaign Cost Include list, delivery cost, $1,000 creative, design, testing Valuable Response Actions Sales 100 X AOV $50 $5,000 Sign-Ups 430 X CPA $2.00 $860 Page Views 1,000 X CPA $.50 $500 Forwards 276 X CPI $1.00 $276 Subtotal $6,636 Simple ROI $6,636 Less $1,000 = $5,636
- 24. Multi-Channel Conversion Tracking • Email will both directly and indirectly contribute to offline purchases • Your back-end may not accurately be able to track conversions because responders don’t always follow a trackable path • Short-term channel-suppression tests (via hold out groups) is one way to gauge individual value of a email as a channel • Suppress 5% of regular email subscribers from program for a set period of time (30 days) • Create a control the same size which receives regular email • Compare purchase behavior of emailed (control) vs. non-emailed (test) groups • If control converting better than test group, the difference is the incremental lift from your email marketing
- 25. Using Hold-Outs to Gauge Incremental Value of Email • Caveats – Need to be emailing frequently and regularly (i.e. weekly or more often) – Sometimes you won’t see a difference between test and control – Seasonality can create bias • November/December sales volume so high it’s difficult to attribute conversions to only a single channel – Some emails don’t resonate with online shoppers but do stimulate offline purchases, so the control could underperform the test group in online sales Critical to measure conversion (sales) FROM ALL SOURCES
- 26. Calculating Total Conversion Delivered List Size 50,000 Conversions By Channel Online – Direct from Email Campaign 1,000 Conversion Rate 1,000 / 50,000 2% Online – via Social Network (share to social link in 430 email) Conversion Rate 430 / 50,000 .9% Phone 150 Conversion Rate 150 / 50,000 .3% In-Store 400 Conversion Rate 400 / 50,000 .8% Total Conversion All Channels 1,980 / 50,000 4%
- 27. Contribution Measurement Key Takeaways • Multiple response actions have value – Shares, subscribes, page views, friends/follows should all be counted toward your campaign’s total economic value • Conversion can happen directly or indirectly – Email creates some online conversions immediately, but influences others that can be difficult to track – Use channel suppression test to measure incremental life of email • If multi-channel, track TOTAL vs. ONLINE conversions – While not all off-line conversions can be attributed to a single source, tracking codes/coupons sent via email can tie them back to a campaign
- 28. #4: Comparative Analysis Old New Rule Process Metric Raw Numbers NEW New Rule Process Metric Correlations
- 29. Deep Dive into Process Metrics • Compare week-over-week, month-over-month, year-over-year campaign performance (head-to-head campaign comparison) • Examine correlations as well as standard process metrics • Campaign A may have produced more opens and clicks than Campaign B, but not necessarily more conversions or more money • Correlations to Measure 25% of those who 12.5% of those who opened clicked opened clicked • Opens to clicks • Clicks to conversions Campaign A Campaign B Open Rate 48% 40% Click-Through Rate 12% 5% Conversion Rate 3% 4% 25% of those who 80% of those who clicked converted clicked converted
- 30. Another Scenario • Side-by-side campaign comparison should go beyond basic process metrics to the bottom line • Correlations to Measure • Opens to clicks 43% of those who 27% of those who • Clicks to conversions opened clicked opened clicked • Conversions to AOV Campaign A Campaign B Starting Total 10,000 Names 10,000 names Open Rate 35% 55% Click-Through Rate 15% 15% 33% of those who 20% of those Conversion Rate clicked converted 5% 3% who clicked converted Average Order Value $150 $250 Total Revenue $75,000 $75,000
- 31. Comparative Analysis Key Takeaways • Higher or lower process metric percentages don’t always translate into more or less money • Higher or lower ratios of process metrics to one another don’t always translate into more or less money • Higher initial response does not always translate into higher final revenue • You have to take the analysis all the way through to the bottom line (revenue) to see which campaign was a winner • But! • You can learn which subject lines, email creative, or offers pull best and test a combination of best efforts from across multiple campaigns
- 32. #5: Economic Impact Old New Rule ROI NEW New Rule RPE & AOV
- 33. The Longstanding Email Contribution Measure: ROI Step 1: Step 2: Step 3: Figure Cost Count Response Calculate Return • Copy and creative • Know your starting • Subtract total design total campaign cost from • List rental • Click-throughs total sales to calculate • Transmission Fees • Conversions return on sales • Landing Page design • Unsubscribes • Did your campaign or website revisions generate a positive • Undeliverables return on sales? On • Tests profits? • But with send costs so low, is this really the best way to measure financial impact?
- 34. Revenue Per Email (RPE) • Perhaps even more important than ROI as a measure of channel success • Revenue generated divided by (email quantity sent minus number of bounces) • Example: • $100,000/(20,500 emails sent – 500 bounces) = • $100,000/20,000 emails presumed delivered = • $5.00 per email address • OR to simplify • Multiply by 1,000 to determine Revenue per Thousand Emails (RPME) • $5,000 per 1,000 emails sent • Calculate by • Individual email campaign • Goal period (monthly/quarterly/annual) • Life of email program or series (important if testing a frequency strategy)
- 35. The Bottom Line: AOV & Total Revenue • Look beyond Process Metrics and ROI by calculating both Average Order Value (AOV) and RPE regularly • Higher conversion rates alone don’t matter if AOV is below average • Example: Campaign A Campaign B Delivered Total 1,666 1,714 Conversion Rate 3% 7% Number of Orders 50 120 AOV $200 $100 Total Revenue $ $10,000 $12,000 RPE $6 $7 • Campaign B required twice as many sales to produce the same revenue as Campaign A • Something is motivating responders to spend more per sale in Campaign A • Find out what, then work on raising conversion rate
- 36. Economic Impact Key Takeaways • ROI a useful measure, but also look at top-line revenue (and other response value) directly attributable to email – Revenue per email (RPE) an important benchmark metric to gauge the health of your program over time – Measure it campaign by campaign, but also for the life of a program; YTD for program • Beware apples to oranges comparisons – Higher conversion rates don’t necessarily equal more revenue – Average order values can and do vary and will impact the bottom line • At the end of the day, it’s about how much money email marketing contributes to the coffers! – Higher open and click rates don’t mean squat if they don’t clearly correlate to higher conversion rates, more RPE, and better AOV
- 37. Next Generation Email Metrics & Analysis Questions?
- 38. Contact Information • Karen Talavera • Synchronicity Marketing (www.synchronicitymarketing.com) • Email: karen@synchronicitymarketing.com • Phone: (561) 967-9665 • Facebook: www.facebook.com/SynchronicityMarketing • Twitter: @SyncMarketing • Austin Bliss • FreshAddress (www.freshaddress.com) • Email: austin@freshaddress.com • Phone: (617) 965-4500 • Twitter: @FreshAddress
Notes de l'éditeur
- One thing's for sure: there’s a lot more to measure than there was in the early days of email. Digital marketing and messaging channels continue to proliferate at an unprecendented pace.
- So, with more potential channels intersecting with and interacting with our email, and more to potentially measure, what's really worth measuring?
- There are four meaningful categories of measures which should be applied to your email program. First, Process metrics are diagnostic in nature and should be tracked not only campaign-by-campaign, but also by individual list members (or list segments). They should be tracked over time to determine how individual elements of your email program are contributing to overall success as well as how engaged list members are over the long term. Second, Influence metrics measure the response history of individuals on your list, including how they might forward email, share it with social networks, or reference it when converting in offline channels.Third, Feedback Metrics are the sum total of questions, complaints, or issues raised by your email list members. It’s critical that you not only can accept and hear feedback, but are responsive to it. Be an active listener. Fourth, Contribution metrics are strategic in nature and measure your email program's performance against your organization's strategic marketing and business goals. They include measures such as return on investment (ROI), Average Order Value (AOV), and Lifetime customer Value (LTV).
- Most email marketers tend to take a simplistic view of process metrics, focusing on how single campaigns performed or perhaps on how an entire program has performed over a specified period of time. While having this view of email campaign performance is essential, it’s important to go beyond a campaign-by-campaign or program-by-program view and also analyze process metrics by different responder segments.For example, it pays to view response history by process metrics at the individual list member level. Map a frequency distribution of how often subscribers complete a desired action, such as opening an email or clicking on a link. Some subscribers will perform these actions only once or infrequently, while others will be highly engaged. Those who rarely or never respond to your email are segments you’ll want to identify over, say, a quarter or a year for special treatments and offers.
- Don’t forget the importance of back-end segmentation in your email marketing program. Just as you use segmentation for targeting or creative decisions, you should use it in campaign and program analysis. In fact, backend segmentation analysis is a MUST to discovering your best source of subscribers, best-performing permission practice, and other insights into your audience members and customers. Analyze campaign and/or program results by demographic, behavioral, and channel segmentation clusters such as these, or you can analyze by more basic segmentation (whatever is relevant) such as gender, age, overall lifetime spend with you. Just be sure to use the results of what you learn as you go forward in creating new campaigns and programs. These examples are show because they take the CONTEXT of email as a channel into account.
- Viewing process metrics by individual list members is known as subscriber engagement analysis. Engagement measurement also quickly reveals pockets of true activity. Consider that your open rate on each campaign may be 25%. You need to know if it's the same small minority opening every time (in which case, you'll want to send something different to the other 75%!). However, when tracked over the space of a month or quarter, it may be that 60% of your subscribers open at least once. That would suggest the need for a relevancy or cadence adjustment.
- With a long-term view of list member response actions, you’re examining not just the overall incidence of response actions for a campaign, but the general depth of response and engagement in your list. By measuring cumulative response actions over several campaigns, you can identify segments which need additional stimulus to engage with your email and attempt to increase their responsiveness in the future.
- What ARE some of these influencing actions your email list members might take? First, since the beginning days of email people have had the desire to share. Initially, they could only do that online by forwarding an email, an action many still take today. Now however, much email is social media-enabled for sharing on Facebook, Twitter, and/or social bookmarking sites. Placing a "share to social" links in your messages can enable that. Finally, people visit areas of your site, or your partners sites, that might not be where you'd expect them to go. I suggest you need the ability to track the genesis of all three of these actions back to your email marketing campaigns. Let’s talk about these in more detail
- When it comes to sharing, you can encourage it from within the email message, your landing page, or both. Sometimes it’s presented as a proactive call to action in the email, and other times as a secondary call to action after response on a web page. Sometimes both. Any are valid.The example here is of a web page from National Geographic’s web site. When they launched the Great Migrations television series, they launched a sweepstakes to promote it. So, the call to action of one of their many Great Migrations email campaigns was to ask people to enter the sweepstakes. After entry, as a secondary call to action, they invited entrants to tell friends about the sweepstakes and in return for sharing, get additional entries into the sweeps. Notice how they provided fields for both first name, and email address.The sharing was handled via this form on the NatGeo site, so because they hosted it they could accurately and precisely track the number of email campaign responders to the sweepstakes who shared, how many people they shared with, and so forth. They could even track whether those who received the sweepstakes invite as the results of a share further shared – this is called second generation sharing.
- Here’s an examples of another share request as a secondary call to action. The main objective of this email from Victoria’s Secret was to invite Victoria’s Secret email subscribers to join a private store shopping event. However, there were two ways to share this with people not on the list. One, there’s a forward to a friend link in the upper right hand corner. Two, there is the share invite via Facebook in the bottom center of the message. Let me show you where each of these goes.
- Here’s the screen for the forward to a friend share. Except for color and graphic design, this should look pretty similar to what you just saw in the National Geographic example. One difference is that there is no field for first name, just email address, but there is a field for the person sharing to include a short note so the recipients of the share will know who it came from and why. Also, unique tracking codes embedded in the email message pass through the email address of the responder doing the share, so victoria’s secret can pre-populate the “from” email address field and knows exactly who on their list decided to use the forward to a friend feature.This is a best practice for forward to a friend email because routing the forwarding through your own process is the only way to accurately track it, and make sure messages forwarded actually get delivered. Sure, some of your email subscribers will forward your messages with no urging from you and that’s fine, but if you want to very precisely track forwards, you’ll need to handle it this way.
- Moving on, here’s how the share to Facebook invitation looks. Again, unique tracking codes embedded in the email message pass through the identity of the responder doing the share and if they are logged into Facebook send that information to Facebook immediately. Victoria’s Secret also pre-populates the share post with an image, copy and link so their list subscribers don’t have to figure out what to say. Remember a click-able unique link in the email leads here so unique click-throughs to the share to Facebook invite can easily be tracked.
- Second after sharing, your email subscribers can generate influence by commenting on, rating, and reviewing your company, products and services online. While this is also a form of feedback, it’s typically indirect rather than direct feedback, so I’m covering it here in influence rather than in feedback metrics. Also as I said at the beginning, all metrics are actually feedback metrics when you think about it. As for direct feedback that is influential, you may or may not be asking email subscribers to comment. Whether you ask them to or not, they will. They’ll do this organically on your site or blog as well as on your Facebook page, or they’ll do it elsewhere if you ask them to. In addition, they’ll rate and comment on social bookmarking sites like Digg, and they’ll contribute to peer review sites like Trip Advisor for travel, Amazon, BizRate, Open Table for restaurants, and so forth.The reality is what your email subscribers say about you online can positively or negatively impact your visibility, reputation, traffic, and sales. On the plus side, the best case scenario is that these influential actions extend the reach and life of your email campaigns and increase their return on investment, or ROI. So whenever possible, encourage subscribers to become influencers.How do you track these influential actions? You monitor and listen across the web. While simple alerts can be set up with Google Alerts, more comprehensive social media listening solutions are a great way to handle this. Social Media Listening resources I recommend are Radian6 (now part of Salesforce.com), SocialMention, and Hootsuite.
- If you want to encourage email subscribers to share the content in your messages, today share with social is the more common way to do so than through forward to a friend. Share buttons can be embedded in HTML email designs, like the one you see included in this email newsletter from online marketing company Lyris. This social sharing button pops up icons for several different social networking and bookmarking sites. The subscriber clicks on wherever he or she wants to share and goes straight there. Of course, you could simplify this by including only the icons for the specific networks you want people to share to. If you only want subscribers to share to their Facebook walls, include only a request to share to Facebook like you just saw in the Victoria’s Secret email message example.Back to the image here, if I like the article in the Lyris newsletter and want to give it a Digg, I can press the Digg icon within the share to social request, and off I go to Digg.
- And here’s what people have shared from Lyris on Digg. Keep in mind this is a B-to-B company so share numbers tend to be smaller, but every share gets you a higher ranking on Digg. Encouraging share to social is a great way to get something to go viral – whether it’s an email message itself or more likely, what the message was about.Again, remember the point is to track shares, and by including a share button or unique linked icons in your email you can because you can track unique clicks on those.
- The point of all this, as I hope you’re seeing in this section, is that there are now many valuable actions BEYOND CONVERSIONS that your email subscribers can take – actions that have real economic value – and should be tracked and measured. It’s important to measure all meaningful actions from email subscribers and assign a value or appropriate weight to each. In fact, multiple response actions – even those we’re not planning on – can contribute to the overall ROI of our campaigns. For example, a typical email marketing campaign will generate not only purchases but also page views, social networking comments, sign-ups and qualified leads – all of which have value because we are normally PAYING good money in other marketing channels to generate them. Understand what each of these actions is worth to you and be sure you track them from within each campaign for an accurate measure of the campaign’s total value.
- Your goal should be to calculate the total contribution of each email campaign. “Total contribution” means exactly that – not just counting purchases or expected conversions, but all valuable actions. If an email campaign generated excess site visits, wouldn’t you want to get credit for that? If a share request generated 10% list growth, don’t you want credit for that too? Of course you do, so track all these other actions and when you report campaign contribution, report an expanded view of it like you see here.Let’s look at this simple example. First, know your campaign’s cost. Second, add up the total economic value of all types of meaningful response actions. For example, your campaign will likely generate some sales which have an average order value. When those are totaled in the example here they resulted in $5,000 of revenue. But other behaviors took place in response to this campaign as well which are worthy of being counted toward the campaign’s total financial contribution. For example, 430 people signed up for an additional list. Since it costs this marketer $2.00 on average to get a sign up, the cumulative value of those actions is $860. Additionally, 1,000 people viewed the landing or other Web pages, at an average cost of fifty cents to produce a page visit, the cumulative value of those page visits was $500. And finally, 276 people forwarded the email, creating an average value on a cost-per-impression basis to reach new audiences of $276. All totaled , this campaign’s financial contribution was more than just its $5,000 in sales – it was actually $6,636.When subtracting the cost from the total contribution, the campaign has returned $5,636. If we just took revenue minus cost, it would be $4,000. Isn’t $5,636 of contribution going to look better than $4,000 when you’re submitting budgets or trying to add staff? You bet it does.
- Which gets us to Multichannel conversion tracking. If we’re trying to track conversions directly and indirectly caused by email marketing, we need to be able to track ALL conversions. Often we can’t or it’s difficult to do so because as both marketing and response channels grow it gets harder to pinpoint cause-and-effect. We already know email both directly and indirectly generates response – meaning it both directly and indirectly contributes conversions. So how do you get a solid read on whether or not your email marketing is contributing to the bottom line, and how much, in offline channels?Now, obviously if you have no offline channels like stores, offices, physical locations, an in-person sales force, agents, call centers or a catalog you can ignore this. But for the rest of us, one way to determine the incremental value of email is to stop sending email to a portion of your list for a given test period – say a month or few months at most. Then at the end of the test period, measure the total responsiveness as much as you can by channel of those customers and list members who did receive your email against those who did not. Ideally those who did receive your email should show a higher degree of response even offline. This marketing channel suppression test will identify whether your email marketing is helping or hindering your conversion in other channels.The logic behind this is simple: marketing in more than one channel produces better response than only marketing in a single channel. This has been tested and proven for decades – if you don’t believe it, try it yourself and you’ll see. So if you take a way a messaging channel – email in this case – you’ve removed a customer touch-point and you should see conversions dip a bit among the segment temporarily not receiving your email.
- Let me show you an example of how to track and calculate total conversion from an email campaign. Track conversions as accurately as you can by channel. The reality for most marketers is sales come through other paths than a web site or sales page. Some come as a result of content from your emails shared by your list members with THEIR social networks. Others come via phone or in-store, or maybe even direct mail, catalog, and DRTV. Email may have played a reinforcing role in a message or offer a customer saw elsewhere, but it didn’t directly generate the sale. Or, you may offer multiple ways people can respond to your email – for example if you’re Delta airlines someone can book a flight on your site, call to book, go to a travel agent, book on Expedia, or go to the ticket counter at the airport.Looking at the example, you can see that when only direct conversions from an email campaign to a web page were tracked there were 1,000 responses. Out of a total of 50,000 people who got the email, this is a 2% conversion rate. But when we make efforts to track how many additional conversions came as the result of shares to social, phone orders, and in-store purchases, we see the email campaign actually generated another 980 conversions, for a total of 1,980 conversions. Now, the total conversion rate for the campaign is close to 4%. Doesn’t 1980 orders sound a heck of a lot more impactful than 1,000? Of course! Again, the reason I’m teaching you all this is I want you to get the maximum credit for the time and effort you’re putting into email marketing so you can show the maximum impact, and no less, it has for your company.
- Of course, one of the most telling measures of performance in email or any direct response channel is return on investment, known as ROI. In email ROI is calculated by first knowing the total cost of a campaign – remembering to include list rental if applicable, as well as landing page design and the cost of any testing done prior to roll-out. Second, we measure all basic process metrics as well as the economic value of each. And third, we subtract the campaign’s cost from the revenue or economic value it generated to see if it was profitable. Because email is so cost-effective, it is not difficult to achieve positive ROI on customer campaigns. However, in prospecting scenarios when an outside list must be rented, which can cost as much as 25 to 30 cents per email address, achieving positive ROI can be more difficult. In either case, ROI is almost routinely measured on individual campaigns to understand their specific value.
- Beyond setting campaign or program goals and benchmarks for contributions like ROI, set a goal for the entire channel.
- When it comes to measuring contribution, even ROI isn’t always the ultimate financial measure of email marketing performance. And again as shown in this example, process metrics don’t always tell the whole story. It’s easy to glance at the statistics from these two campaigns and assume that 7% conversion represents significantly better performance than 3% conversion. But, we must move beyond thinking higher numbers mean proportionally better performance. As you see when comparing Campaign A and Campaign B here, Campaign B’s conversion rate, although more than double that of Campaign A, produced only 20% more revenue. Why? Because the Average Order Value (or you could call it Average Conversion Value) of Campaign A is twice as high as that in Campaign B. Because of this, it takes twice as many sales in Campaign B to generate the same amount of revenue generated in Campaign A. Since the average sale amount in Campaign A is $200 and it is only $100 in Campaign B, of these two efforts Campaign A is a much higher margin effort. Unless you are selling only one product at one price, an Average Conversion Value analysis should be a regular step in your post-email marketing campaign analytics.