Email marketers use a wide variety of techniques to improve response in their retention and acquisition email programs. Following email best practices drives strong improvement over the baseline. As in all marketing, however, the devil is in the implementation details, so campaign success varies.
Despite the benefits, response and the key drivers of response are not being actively managed—resulting in erratic success rates, lower performance, and declining response rates. However, the availability of good data and evidence of strong success when testing best practice strategies indicates that marketers are interested in moving well beyond the batch-and-blast tactics that spawned email marketing back in 1999.
This overview will give you an industry baseline for measuring your own 2006 opportunity. Dig into the data directly to benchmark your success against other marketers, and learn (or steal) some great ideas for what works and what doesn't.
Email Marketing Optimization Techniques: Success & Learnings
The 2005 Email Marketing Survey was conducted by MarketingProfs and includes responses from 1,033 marketers, 68% of them in the US or Canada. About 73% of respondents are corporate marketers. Roughly 50% are B2B and 23% are B2C. Another 19% market to both businesses and consumers. The survey was fielded online during November 2005. Analysis is provided by Return Path’s Strategic Services team of email best practices experts.
1. Response Optimization
Findings: 50-70% of marketers manipulate various response elements in every campaign. Primarily, marketers focus on the offer, the call to action, and the subject line. While 84% adjust promotions and content, there is a 30% drop off for custom content or even personalization. Good news: 72% test Subject Lines every time! Between 5% and 40% do not adjust at all the various elements available to them to improve the response.
In addition, 68% say they use landing pages to boost response, and 64% of those who optimize use a dedicated landing page; however, nearly 40% of those still just use an existing Web site page (usually a product page).
Analysis: Response drivers are being managed at the campaign level, not the subscriber level. At the end of the day, marketers are managing little more than a promotions calendar. Despite the number of levers and automation technology under their control, very few marketers are actively managing more than a merchandise schedule, which may or may not be customer-driven.
Recommendation: The problem is that your customers notice when email isn't tailored to their needs. Generic email can work as a reminder service, but that is not going to optimize or let email work hard enough to drive repeated response or up-sell. Instead, provide custom, relevant email experiences for important subscriber segments. This might include triggered emails as well as more sophisticated content strategies.
2. Segmentation
Findings: Great news... half (50%) of marketers say they segment their email file to boost response. Of course, that means half do not take advantage of this powerful technique.
Those who do segment, use it consistently, reporting that segments based on purchase/response drive the highest success. Demographic targeting is used heavily, by 70%, with mixed results, and overall recency and frequency drive milder success.
Why don't the other half of marketers surveyed segment? 24% don't believe segmentation adds enough value and another third (30%) don't know where to start. One-third report they don't collect any data, and half just don't have brain share or resources to devote to testing.
Analysis: This data again suggests that most marketers focus on promotions and the seasonal cycle—and not the interests of the subscriber—in order to segment audiences by past behavior. While a number of segmentation tactics are in use, purchase behavior is used most widely, which is a good indication that CRM databases are talking to email databases. That should open up new opportunity for marketers.
Recommendation: Not all subscribers are created equal. Marketers can increasingly apply direct marketing predictive modeling and response optimization to create subscriber experiences that reflect the value of each. Past purchase is a great start, but creating customized content is a combination of offer strategy and segmentation. At the least, treat customers and prospects differently, as their needs and experiences with your organization are completely different.
3. Integrated Marketing
Findings: Only 35% of survey respondents use email as part of a multichannel effort, and 60% of those consider the impact of multiple-channels with every campaign. The most common multichannel efforts were combinations of direct (snail) mail and offline events combined with email, and online advertising used to boost response of email campaigns. Perhaps not surprising, marketers report that sweepstakes have limited success and are rarely used.
Analysis: So it appears that while few marketers consider using email as part of a multichannel approach, those that do take advantage find it valuable. The power of email seems to be only accentuated when combined with direct mail, events, and online advertising.
Quotes from survey respondents tell a strong story, although not everyone has had success with multichannel efforts. Samples: "When we do this [multi-channel marketing], it always gives us better results than email alone." "The more diverse the campaign, the more successful it is." "Integrated online and offline worked best." "Multi-channel seems to reach and get a response from a different set of people." "We use multiple channels to create a push/pull effect for our catalogs."
Recommendation: Marketing must reach where prospects/customers work, live, and play. Look to see where surveyed marketers people are finding success—tradeshows, invitations for events, and banner/email promotions for the same sale. This is a good start.
Best practice email marketing has always called for marketers to be subscriber advocates. Clearly, it's more important than ever if you want to break through. Engage with customers at a personal level; tap email's potential as a relationship tool. Use the data and technology that is readily available today. Online advertising, especially email, is more about context and consumer choice, than it is about placement.
Finally, marketers need to be able to track ROI across channels, and back to customer behavior. This may mean discarding existing data management tools that are inadequate for multi-channel decision making, and using more relevant analytics that reflect the diverse and extended realm of multi-channel marketing.
4. List Growth Optimization (Organic and Paid Strategies)
Findings: Survey respondents have done limited experimentation to actively expand their email house files, with mixed success. For many, viral marketing is temperamental. Introducing new content newsletters (e.g., a women's apparel or .NET programming) was "successful" 85% of the time for improving response rates. (See segmentation-strategies findings above). Other successful list growth strategies include purchase processes, sweepstakes, telemarketing, borrowed partner lists, and kiosks.
Significantly, 70% use their house file for prospect marketing. Once on the house file, many prospects get the same information as customers. Some 30-50% do not segment based on purchase behavior.
Paid email list growth strategies are less frequently used. Only about 15% use third-party email list rental to find new prospects. Marketers surveyed are primarily not convinced of the value or response rates or are not familiar with a reputable vendor. Significantly, 64% don't use it because they are concerned about protecting their Sender Reputation.
Analysis: Hope is not a strategy! Nearly all marketers want to grow their email files, but 26% of those surveyed focus on email growth only quarterly, and 15% not at all. There are many opportunities for growth that are not being taken advantage of by most marketers. In addition, invitations are (generally) not aligned with subscriber interests.
Recommendation: A strong value proposition, prominently displayed, will drive higher subscription rates. But interesting, relevant content will keep subscribers active and engaged. Retention starts at email one. Make list growth a priority. Always send a welcome message, and consider an "engagement series" at start and three months to be sure your email remains relevant.
Remember that subscribers may not be "in market" at the same time. Marketers can now use pull strategies, made possible by the emergence of better targeting software, to trigger email campaigns designed to move prospects (and customers) to the next stage of the sales or product lifecycle. Develop messaging around the customer life stage using email series and triggered messages. Quality, not quantity, will determine the success of your email file.
The current value proposition is clearly not embraced for email list rental or lead-generation programs by most marketers. However, paid acquisition is an effective "push" online marketing balance to "pull" online marketing like search. It's worth testing with a reputable vendor email acquisition programs that provide a customer experience well suited to your brand and products. Develop a baseline response for your own business, and then optimize. Always employ testing strategies that range from simple subject line optimization to custom content strategy, dynamic rendering and target segmentation.
5. ROI and Success Metrics
Findings: Revenue per campaign is the most-utilized metric, used by 39.8%, for success of email marketing. File size is a close second with 38.3%, and revenue per email third, at 25.8%. In fact, 35% do not set clear success metrics for their efforts. However, for those who do measure, among the most utilized strategies, email earns the highest ROI of 40%, followed by search (28%) and direct mail (18%).
Analysis: Per-campaign or per-email metrics dominate the landscape, suggesting that short-term analysis (and revenue) drive most email marketing efforts.
Recommendation: While revenue per campaign will always be important, a better metric is subscriber value. Consider these questions: Are email subscribers better customers? Do they purchase more frequently? Do they stay customers longer? Do you have deeper relationships (multiple layers or departments) with email subscribers than other customers? Does email drive higher conversion from prospects? How active are the subscribers on my file (not just how many, but how engaged)?
Want to work with the data directly? Click here to view and filter the Email Marketing Benchmark Survey Results.
