In today's world, knowing how an individual email campaign performed on a one-time basis is not enough. To learn whether your company is deriving true value from email marketing, you need both broader and deeper perspectives offered by program- and list-level analyses.
Though email campaign process metrics such as delivery, open, and click-through rates have their place, if you don't look beyond them... the true impact of your email marketing—and opportunities for continuous improvement—will go undetected.
It's high time for email marketers to assess email marketing performance in relation to goals, objectives, and contribution expectations that matter.
So, what matters?
Determining what matters most requires a clear understanding of your organization's strategic goals and objectives for email as a marketing channel. In other words, why are you using email marketing, and what do you want it to do for you?
- Do you want it to accomplish softer marketing goals, such as generating brand impressions, communicating with customers, and influencing purchase decisions?
- Or do you want it to drive harder revenue-producing goals, such as generating new leads, inquiries, and direct sales?
Whether your purpose for email marketing is "soft," "hard," or a combination thereof, the following three types of email marketing analyses should become standard practice, because they're so powerfully effective in measuring the impact of your investment in this channel.
1. Responder Segmentation Analysis
Are you analyzing who your email responders are by unique attributes such as gender, age, geography, past buying behavior, time on list, source of name, and social media connections? If not, you should be!
The beauty of such "back-end" analysis is you don't have to divide your list into multiple segments before deploying a campaign. Provided your email database is searchable by those subscriber characteristics (and more), you could categorize responders post-campaign to begin developing a detailed profile of who they are.
For this type of analysis, you could create responder profiles by different response actions (open, click, and conversion), but to keep it simple, define what your desired call to action is (the thing you most want people to do) and profile only those who completed that call to action (your "converters").
Also, don't stop at conducting responder analysis on a campaign-by-campaign basis. Conduct it in aggregate for all campaigns deployed quarterly, semiannually, and annually.
For example, a responder-analysis by time on list might reveal that established members (who signed up more than six months ago) convert at a higher frequency than new list members (who signed up within the last six months). Knowing that might lead you to increase the frequency of email to new members, or test an onboarding campaign to new members as a way to get them familiarized, engaged, and converting faster.
Or, you might find that analysis by age indicates that your subscribers 45-55 are more responsive than 25-35 year-olds. Knowing that would change how you position your offers, and it would affect your creative choices for email copy, images, font size, etc.
What do you do with what you learn from responder segmentation analysis?
Use responder profiles to...
- Understand how demographic or geographic differences affect response.
- Improve targeting and segmentation on future campaigns.
- Vary offers and creative to improve response on less-active segments.
- Develop or test different frequency to different segments.
2. Email Subscriber Engagement Analysis
Having a performance report for each email message you deploy is great, but you'll also want to know how your entire list of subscribers behaves in response to your email over longer periods of time.
This type of analysis relies on measuring cumulative actions by responder (opens, clicks, conversions) during defined time periods (usually quarterly or annually) both to uncover the best, most active responders and to uncover inactive list segments for re-activation or culling.
Unlike a responder segmentation analysis, which tries to "paint a picture" of who responders are, an email subscriber engagement analysis is more concerned with measuring the total reach and effectiveness of email marketing to your list.
For example, how many people across your entire list have ever clicked on an email? How many have done so more than once? How many click on every message? Analyzing the frequency distribution of response actions such as open, click, and conversion across your list over time tells you a lot about both the depth and breadth of your email program's impact.
What do you do with what you learn from email subscriber engagement analysis?
Use the data to...
- Offer incentives to increase response from infrequent openers, clickers, or converters.
- Increase frequency on less-active segments to see if it improves engagement.
- Identify weak or nonresponsive list segments for reactivation campaigns, or for suppression.
- Create a "premium" program for your best responders. Reward them with exclusive offers, content or other special treatment.
3. Channel Contribution Analysis
What's the bottom-line impact of email as a marketing channel on your business? This analysis seeks to determine economic impact.
"Economic impact" doesn't have to mean direct sales revenue. It could, but it might instead be measured in increased site traffic, leads generated, new subscriptions attained, social media connections made, or gross brand impressions. Or, it could be measured in the cost savings and efficiency gains of email vs. more expensive marketing channels such as traditional direct mail.
So, understanding the economic value of each response action that an email marketing message generates is key! For example, what do you have to pay to get a page visit? What about a qualified lead? How about a new customer? Or a purchase from a repeat customer?
Do you know your allowable maximum cost for any of those actions (known as your cost-per-action or CPA)? If you do, you can attribute it to those your email program generates.
For example, if an email campaign produced 1,000 unique site visits that would normally cost you $0.25 each when using paid search marketing to drive traffic, then your email campaign just saved you $250 on search (or contributed $250 in value, depending on how you want to measure it).
What do you do with what you learn from this analysis?
Use the data to...
- Determine return on investment (ROI): Is email generating more economic value than it costs, or is it costing more than it contributes?
- Determine average response/order value (AOV): How much economic value—in soft or hard dollars—does a conversion via email contribute? If it's sales, what's the average order amount from email?
- Calculate revenue per email: If your email marketing generates sales, how much is each name on your list producing in revenue each year?
- Calculate value per email: if your email marketing does not generate sales but DOES drive site traffic, social media connections, or new leads, what would each of those be worth to you if you had to pay to get it? Assign that value to each name on your list and add it up annually.
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Remember, measuring what matters is not necessarily as easy as just glancing at those simple email campaign process metric reports that come your way after every message you send, but it's not rocket science either.
And, at budget time, when you're clamoring for more staff or money, having the results of these analyses at hand is absolutely worth it.
(For a free Digital Marketing Breakthrough Session revealing how to generate more visibility, revenue, and results from your e-marketing click here.)