Catalog and Direct Selling: Evaluate Your E-mail
Do your e-mail campaigns measure up?
It’s time for a New Year’s resolution. Say it with me: “I resolve to no longer send e-mail simply for the sake of sending e-mail.”
Don’t worry; you aren’t alone. Pushing frequent e-mails with tons of offers and messages is an easy habit to get into. Low cost, easy to push, the sales just come in. It seems to be the proverbial “no brainer.”
Are e-mails easy? Sure. They’re easy to create, easy to push, easy to manage. And they also are easy to measure. A good e-mail campaign should have clearly defined goals and objectives, and should be put through the rigors of a comprehensive post-analysis just like a good catalog campaign. As with a catalog mailing, you should define your segments and develop performance thresholds for each based on break-even analysis and profitability requirements. Of course, breakeven for an e-mail campaign will be a fraction of the breakeven for a catalog mailing, but so will the response rate (and average order values are almost certain to be lower).
But what else should be measured? Working with friends from Ohio-based Web-sales strategy group DMinSite, I’ve put together a list of e-mail metrics to help you determine how well your e-mail campaigns are performing.
The basic e-mail reporting metrics include:
Pushed—the quantity of e-mails put into the system. Having a list of, say, 100,000 e-mail addresses in no way guarantees you’ll actually get that many messages through to recipients. Addresses must be clean and domains (such as Yahoo!, Hotmail and AOL, which employ bulk mail folders) must allow your messages through.
Bounced—can be “hard” or “soft.” A hard bounce is the result of mailing to an e-mail address no longer in existence. A soft bounce occurs when an inbox is full or the server is down; the technology pushing the messages generally will try to redeliver the message after a set period of time.
Delivered—the quantity of messages that made it to the intended recipients. Evaluating messages delivered as a percentage of messages pushed will give you an indication of delivery problems that you may be facing.
Opened—the number of recipients who opened the message. Opens can be a touchy data point, since many recipients use Outlook or Outlook Express which allows recipients to preview messages. When the recipient sees the preview, the server alerts you that the message was opened—but you won’t know if it was viewed in its entirety. If you assume your messages are getting through to recipients and opens are low, you probably have a customer-service problem.
Beyond the Basics
Click-through rates (clicks) are among the most telling of initial e-mail stats. In a snapshot, clicks indicate how appealing your initial offer is to the target audience. If your creative, message and/or promotions are relevant and well targeted, high click-through rates reflect it. Unfortunately, there is no standard benchmark for click-through percentages. Use the historical performance of click-throughs from your campaigns to establish benchmarks.
If you find that new e-mail sign-ups are high but subsequent click-through rates are low, your brand and communication consistency may be out of sync. Are customers experiencing your company one way through the catalog and Web site, and a completely different way in your e-mails? Keeping the creative, copy tenor, promotional strategy and marketingrelevance consistent in e-mail campaigns is tremendously important. Creating a disconnect in the customer’s mind may not only impact e-mail performance, but could harm the catalog business as well.
Similar to catalog response rate, order rate is the percentage of orders on pushed, delivered, opened or clicked-through messages. Many e-mail marketers evaluate order rate based on pushed quantities since expenses typically are incurred based on push counts. If you only pay for messages that get delivered, consider evaluating order rate as a percent of delivered. Either way, like response rate, order rate is an indication of the overall appeal of the offer.
If you find through analysis that click-through rates are high but order rates are low, it could be an indication that what you’re presenting in the e-mail and what you’re showing online aren’t, um, “clicking.” If you present a product or special offer, make sure the live links in the e-mail take customers directly to it. If you have customers clicking an e-mail that leaves them lost on your site, or lingering at the home page, session-abandon rates will rise, and sales won’t come.
As with mailed catalogs, average order value (AOV) also is an important metric to evaluate with e-mail campaigns. Most catalogers find that online AOV generally is lower than phone, fax or mail. Several theories exist to explain the difference:
• People pinpoint things they want via the Web, but don’t necessarily buy them online.
• Many typically shop sale items online.
• Online shoppers are inclined to make more frequent low-ticket purchases than other channel shoppers.
Whatever the reason, evaluating fluctuations in AOV are important when measuring e-mail campaign successes. What happens to AOV when specific types of offers are presented? What can be done to manipulate AOV—special bundles, offers with purchase thresholds? Do customers primarily shop certain product categories (e.g., low-end) when they respond to e-mail? Are you setting up the e-mails to encourage that type of response?
Sales per e-mail delivered is the combination metric for order rate and average order value. Simply calculated as sales divided by quantity delivered, this metric is used for comparison to your break-even benchmark. E-mail campaigns have a much lower success threshold—you don’t need nearly the response to pay for an e-mail campaign as you would a catalog mailing. But you should have key requirements for return on investment and breakeven.
Additionally, look at the impact that e-mail campaigns have on your other marketing communications. Does a frequent e-mail program negatively affect catalog sales? You must measure the overall impact of all customer communications, and the sales and costs associated with them to determine the overall profitability of your integrated communication plan.
A final “must” metric for e-mail evaluation is the opt-out or unsubscribe rate. A telltale sign of over-contacting customers with e-mail is a ballooning unsubscribe rate. As customers are bombarded with frequent e-mails and ever-increasing amounts of unsolicited e-mail, it’s critical to make sure messages are timely and relevant.
Also important: Give the customer the ability to opt out of certain types of messages. For example, she may not want to receive the newsletter, but may still want to get special promotions. Giving customers the ability to manage the way you communicate with them is imperative to maintain a sizeable file. As a rule, if your unsubscribe rates reach 1 percent, you’re in trouble.
In addition to any analysis uniquely tailored to your business, there are a couple of other actions you might consider evaluating during your post-analysis program.
If your customers are responsive to your e-mails and proceed to place items in their shopping carts but
abandon them along the way, you probably have a customer-service problem on the Web site. This is important to note because your offer can be perfectly crafted, creative, well-executed and perfectly timed, and still fail because the site wasn’t suited to facilitate a good customer experience.
If that isn’t the case, and your customers have a tendency to fill and abandon carts, consider putting together a follow-up e-mail campaign that goes to the customer stating,”Hi. We see you’ve selected some items, but didn’t buy. So you know, we’re keeping those available for you. Just click here, and we’ll take you right back to your cart.” It’s important these messages be “softer” with more of a customer-service slant and less of a selling angle.
An analysis of the navigation paths of customers who come to your site via e-mail campaigns can be fascinating. Do e-mail customers come in on a promotion and jump straight to the sale section of your site? Do they come in on what’s new and immediately search out more new products? How does what they click on affect the way they buy?
The implications in creative presentation, offer development and promotional strategies can vary widely depending on the way customers use your site once they get there.
Steve Trollinger is senior vice president of client marketing at J. Schmid & Associates, Shawnee Mission, KS. He can be reached at (913) 236-8988 or email@example.com.