In Part 1 of this article, I defined process metrics and contribution metrics, explained the difference between them, and identified the most-common measures in each category. In part 2, we'll explore the key actionable insights determined from those metrics and how to best employ them.
There are many approaches to using email-campaign metrics to measure and improve marketing performance. The following are the top five approaches I recommend, along with appropriate measures and usable insights for each.
1. Message or Campaign Diagnostics
This approach measures the performance of a single email message or campaign (which may be a series of messages). It answers basic questions, such as "Was the message successfully delivered?" and "Did we meet our campaign goals?" and allows you to gather the performance statistics necessary for benchmarking the message or campaign against past or future ones. It also helps you identify issues that may be causing reduced email delivery and higher-than-usual unsubscribes or complaints.
Metrics: This approach relies primarily on process metrics, such as the open rate, click-through rate, bounce rate, spam-complaint rate, delivery rate, engagement rate (length of time on landing page, conversions), and unsubscribe rate.
- Gauge how the subject line is performing (open rate)
- Measure effectiveness of targeting, offer link strategy and creative (click-through)
- Determine effectiveness of email vs. landing-page content (click-through rate, conversion rate, click-to-conversion ratio)
- Monitor deliverability
- Determine overall relevance (unsubscribe and complaint rates)
2. Post-Campaign Response Analysis
This approach analyzes audience behavior by unique segmentation scheme, such as by demographics, geography, past buying behavior (RFM, or recency, frequency, monetary), past email engagement, source of name, or time on list. After a message or campaign is run, it views response by segmented audience group.
For example, analysis by time on list might reveal that established members (those who signed up more than six months ago) have higher click-through rates on average than newer members (those who signed up within the last six months), creating an opportunity for different email frequency to different list segments. You can test an onboarding campaign to new members as a way to increase engagement and conversion. Or you might find that analysis by age indicates that twentysomethings are more responsive than thirtysomethings, allowing for greater positioning of offers and creative to the younger group.
Metrics: This approach also primarily uses process metrics, such as the open rate, click-through rate, conversion rate, forward/share rate, etc.
- Understand how demographic or geographic differences affect response
- Improve targeting and segmentation on future campaigns
- Test offers, creative, or frequency to improve response on less-active list segments
- Develop or test frequency strategies
3. Longitudinal Audience Engagement Analysis
It's great to have a process-metrics report for each message or campaign, but you'll also want to know how segments of your list respond from a process-metrics standpoint over longer periods of time.
Such an analysis relies on measuring cumulative actions by the responder (opens, clicks, conversions) during defined time periods (usually quarterly or annually) to uncover both best responders and inactive list segments for reactivation or culling.
Metrics: Like the previous two approaches, this one uses process metrics such as the open rate, click-through rate, conversion rate, and forward/share rate but views them from individual-subscriber perspective rather than a campaign perspective. Essentially, it requires subscriber email interaction (i.e., a response history) to be present in your database.
- Identify weak or nonresponsive list segments for reactivation campaigns
- Map a frequency distribution of list members by key action (open, click, conversion, forward) and target low-frequency groups for testing
- Position or test offers and creative based on responder propensity history
- Test frequency strategies in an attempt to shift the frequency-distribution curve
4. Contribution Analysis
What's the bottom-line impact of an email message, campaign, or program on your business? This analysis seeks the answer in terms of economic impact.
"Economic impact" doesn't always mean direct sales revenue. It could, but it might instead be measured in increased site traffic, leads generated, new subscriptions attained, or gross brand impressions. Or it could be measured in the cost savings and efficiency gains of email vs. more-expensive marketing channels.
Metrics: Unlike the previous three analyses, this approach relies on contribution metrics such as leads generated, revenue, cost savings, pageviews, signups, etc.
- Determine return on investment (ROI): Is email making more money than it costs, or is it costing more than it makes?
- Understand where abandonment in the response process is occurring
- Improve landing pages with high abandonment rates
- Streamline conversion, forms, and opt-in processes
5. Business Objectives Analysis
Finally, it's essential to measure how your email program is delivering against your overall marketing and company goals. Of the five approaches presented here, this one will best help you demonstrate email's value to your company.
Metrics: Email list growth, customer growth, customer retention rate, campaign profitability, cost savings, share of wallet, and customer RFM purchase rates.
- Are the results of your email marketing contributing to your company's overall business goals or detracting from them?
- Calculate the average order value (AOV) or customer channel value (CCV) specific to email
- Determine how the adding of email to the marketing mix has affected ROI, customer retention, or another key measure
- Justify increased email-program budget and resources
The Final Frontier
To get the most holistic read on your email-marketing performance, you'll have to look beyond email, especially if offline conversion is the norm. Work with other departments to collect data that measures email's impact.
For example, email can reduce call-center expenses by providing educational content, FAQs, operating instructions, contact information and procedures, payment reminders, and other information, all of which can reduce your customers' need to call support for help.
Only when you expand your measurement horizon beyond process metrics to include benchmarking, diagnostics, and actionable insights plus progress toward business goals—and when you integrate feedback from across the company to get a measure of email's cross-channel impact—do you have a true sense of your email program's influence and performance.
And that's the best possible defense of your email program and justification for growth!
Continue reading "Measuring What Matters in Email Marketing, Part 2" ... Read the full article
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