bruceclay.com.au - Email Marketing Campaign Objectives and Analysis

Ten years ago very few people had email addresses; today, very few do not. Consumers are fairly sophisticated in email use and feel more comfortable about the marketing aspects of email. Consumers depend more and more on email as a communication tool as it becomes fully integrated into their personal and professional lives.

While email was launched as an acquisition vehicle, it is becoming a critical tool for customer retention and loyalty marketing. Research shows that 94 percent of consumers currently expect emails to confirm orders, and 90 percent expect to receive shipping confirmations.

DoubleClick's "Sixth Annual Consumer Email Study" revealed that 90 percent of consumers go online to send and receive email several times a day. Forty-four percent reported "constant" e-mail use, up from 33 percent in 2004. Currently, the average consumer receives 361 e-mails per week, a 17 percent increase since 2004.

Step 0: Introduction to Email Marketing

Despite the glut of spam and phishing, email marketing remains a powerful advertising channel. A phishing email purports to be from a legitimate company and is sent to con the recipient into revealing personal information such as social security or credit card numbers. This information will later be used for scams that result in identity theft. If recipients reply to a phishing email, they are directed to websites that appear to be identical to those of the company being emulated. The Anti-Phishing Working Group (APWG) reported in February 2005 that phishing sites increased by 116 percent during the four-month period from October 2004 to January 2005.

Email marketing works best when marketers really know how to use it. Consumers welcome email if it is relevant and of value. In a recent survey, 45 percent of consumers indicated email is a "great way" for companies to stay in touch with their customers.

ROI for email marketing exceeds all other media except telemarketing. While some media generate higher revenues per contact and better response rates, its cost is substantially higher. Among the four media in the chart below with lower costs per contact than email, response rates are extremely low.

When used appropriately, email can balance low cost with high response rates better than other marketing media. However, marketers must maximise effectiveness through improved content, precise targeting and accurate tracking.

A DoubleClick study found that consumers are less concerned about spam these days because they have developed strategies to deal with inbox overflow. Consumers use spam filters, which are also employed by their service providers. Thus spam is not as fearsome as it used to be, which signals a big turnaround in consumer attitudes — and you better believe marketers are taking full advantage.

Email plays an increasingly important role in all aspects of today's marketing and customer relationship management strategies. In fact, email is becoming so accepted that consumers would like to see it replace some of the more annoying traditional marketing strategies.

Fifty-one percent of the DoubleClick study respondents would like to see email replace telemarketing, 44 percent would have it replace in-person sales calls, and 41 percent opted for replacement of direct mail.

Step 1: Determine Campaign Objectives

Email marketing can have two basic objectives: to drive direct response (customer acquisition) and to develop ongoing relationships (customer retention and loyalty). Usually customer retention and loyalty is a major goal because marketers believe the resistance to email impedes customer acquisition.

Two research studies show conflicting results on this. Milward Brown (September 2004) found that 63% of U.S. marketers use email to retain customers and create loyalty, yet 62% reported using email to acquire new customers. These results were unexpected. MarketingSherpa (June 2004) found that that 60% of respondents use email to build relationships with existing customers, while 41% use it to acquire new customers.

We are all familiar with Customer Relationship Management (CRM) systems, but the new kid on the block is Customer Communication Management (CCM). The quote from "The Quiet Revolution in Email Marketing" by Bill Nussey best explains this concept.

If you follow the CCM approach, your email marketing campaigns become part of a communication strategy that is managed over time to influence customer behaviour while promoting customer satisfaction and brand equity. Your email metrics will then include data on relationships as well as on results.

It is wise to ensure that each campaign's objective is in line with company-wide planning to ensure that your email programme is integrated within your overall marketing effort, and that all your campaigns are coordinated company-wide.

Step 2: Creation and Execution

Besides having a permission-based, well-segmented and well-maintained list, email marketers must master the art of sending effective emails. There are three important factors that impact the success of an email campaign. First, there is the creative, not just the copy but the format and other messaging elements. Secondly, there is message timing; and lastly, message frequency.

The creative: This includes a multitude of messaging elements that can impact an email campaign, including the following non-exhaustive list: the "from" line, the subject line, the offer, the format, the message copy, the message category, and message personalisation and targeting.

Response Factors: MarketingProfs research (2004) shows that the majority of marketers (53%) feel the offer is the main reason for recipient response on commercial emails. Marketers also believe variables such as timing (38%) and copywriting (28%) are responsible for recipient response.

Format: Research shows that recipients prefer HTML and rich media messages over plain text.

Content: E-newsletters with original content such as marketing articles are the most common form of email marketing sent by U.S. companies (76%). However, among retailers, sales and specials rule (sent out by 81% of retailers). Retailers also send seasonal emails (68% of retailers), full-price offers (64% of retailers) and branding messages (40% of retailers).

Since email marketing is a relatively new media, many copywriters don't have the know-how to craft email messages. Just as writing website copy is not like writing magazine copy, email copy is not like direct mail. Below are some tips.

Subject Line: You have 40 to 60 characters in a subject line, so you need to make every word count. And if your recipients use PDAs, you only have 15 to 20 characters to work with. The subject line used to be the most important element in an email message, but now it's the "from" line. So make sure that the "from" line clearly identifies your company and brand.

Start by jotting down a list of mandatory subject-line info. For instance, if you are promoting a trade show, include the show's name, location and date (e.g., ad:tech San Francisco April 26-28, 2006). That leaves room for being creative since you have another 20 characters to go (try ad:tech San Francisco at the new Moscone Center in San Francisco April 26-28, 2006). Oops, 84 characters, too long. It takes work.

When writing an email subject line, make the content of your message absolutely clear or users will never open it. Online headers are very different from print because they are used differently. Online headers are often displayed out of context as part of a list of articles, such as your email programme's list of incoming messages or a search engine listing. Even if the header is displayed with related content, the reduced amount of available information at a glance makes it hard for users to learn much from that data. Therefore, your subject line must make sense and stand on its own. It is also important to put the most vital and compelling information first in case the subject line is truncated.

Message Copy: It is important to show a sense of urgency, encouraging your recipient to act now. Two-thirds of all purchases are impulse buys. And while B2B products and services have a long sales cycle, you can still entice your recipient into acting now on the next step in the sales cycle.

Remember that recipients get a lot of email and they're not looking for long, persuasive copy. They will scan and sometimes have an "aha" about seeing something they must have or do now. This is why you want to highlight benefits at the top, in the headline, first line of copy or in the first graphic, as well as in a callout for emphasis. Be creative in triggering an immediate response because once attention is diverted elsewhere, that email has lost its glitter.

Limit your message to several important points that must be communicated. Call attention to them up front in the email screen by means of banners, white space above the banner, sidebars, hyperlinks and menu bars. You might want to study past successful email messages or read online articles about email marketing. Last, but not least, write several different versions of your message and test to identify the best performer.

Message frequency: This question is hard to answer as it varies depending on a number of factors. Consumers don't mind receiving email from you if the message is relevant. ClickZ columnist Jeanne Jennings wrote recently, "There is no quick answer to the frequency question. It depends on the goals for your emails and the type of content you send." Her five guidelines for email frequency include:

In a final word on frequency, an Internet Retailer report (2005) found that sending frequency alters response rates considerably. Among online retailers who send out messages more than once a week, the response rate peaks at 3% to 4%. On the other hand, retailers who send out messages 2 or 3 times a month get response rates in the 7%+ range.

Step 3: Timing and Execution

Sometimes timing is everything, and picking the right day of the week to execute your email campaign can be a no-brainer if you know the research. A 2005 study by eROI reported that the day of the week was an important factor, besides creative execution and offer, in achieving email marketing success. The study found that open and click-through rates are lowest at mid week, while the highest rates occurred on Sunday and Friday.

When the day-of-week statistics were broken down by list size, it was found that large lists (over 100,000 recipients) got better results with execution on Monday through Wednesday, posting a 32% increase in reads and a doubling of click-throughs compared to the other days of the week. As size increases, so do bounce rates, while the read and click-through rates decline.

eROI found that list volume is inversely related to read and click-through rates. As list size increases, so do bounce rates, while read and click-through rates decline. However, one exception was found -- lists of over 200,000 recipients experience spikes in read rates on Saturday because most of the larger lists belong to B2C marketers that target consumers when they are likely to make shopping decisions.

This suggests that large lists should be broken down into smaller segments, perhaps targeting the consumer segments and personalising the message. Another tactic is to remove individuals who do not read your messages, or put them into a separate list that receives email less frequently.

Other list sizes studied were "micro mailers" (lists under 5,000), "small mailers" (lists of 5,000 to 24,999 and "midsize mailers" (lists of 25,000 to 99,999).

The micro mailers got read rates that averaged about 35% and click-through rates between 5% and 9%. Those results compare well to the general average of 27% and 4.4%. Weekends were the best time for click-throughs, averaging 8% to 9% versus 5% to 6% for Tuesday through Thursday.

Small mailers had average read rates and click-through rates of 27.8% and 4.7%, respectively. Friday was the best email execution day, with a 31.2% read rate and 5.3% click-through rate.

Midsize mailers had wide variations in read and click-through behaviour, with Monday and Friday being the most productive days (24.4% and 3.85%) and 26.4% and 7.6%), respectively).

There probably is no universal "best day" to execute an email campaign. Industry experts recommend that marketers create their own hypotheses and then test and adjust.

When you are ready to execute, your message will be formatted in text only, HTML or perhaps rich media. Some programmes will let you format for AOL. At this point, test various combinations of offers, subject lines, creative designs, etc., against a small subset of your list. Then select the target audience from your master list and send. Your distribution solution will vary on how you manage these details and you should check with the user's guide for any programme.

Step 4: Testing Message Effectiveness

Email has always been compared to postal direct mail. Just as direct marketers tested different messages, formats, timing and other postal mail variables; email marketers can test relevant variables quickly and interactively.

Email campaign effectiveness can be tested against other email campaigns, other forms of online marketing and against offline marketing strategies. However, 26 percent of U.S. marketing executives do not have formal marketing measurement systems in place (CMO Magazine 2005).

The same study reports that companies who do measure email marketing results have a competitive advantage over those who don't. Customer satisfaction was tracked by over 50 percent of respondents, followed by market share vs. competitors (44%) and website traffic generated (43%). Feedback from sales channels (36%) and brand awareness (34%) were also monitored.

When testing, it is best to isolate one variable at a time. Following is a list of potential variables for testing:

Design changes

Graphics use and style

Format (HTML, plain text, rich media)

HTML formatting in different email clients

Subject line

From line

Offers, discounts, coupons

Landing page

Time of day/day of week

Mailing Frequency

Copy style

Copy Length

Link placement in copy (top, middle, bottom)

Personalisation (presence and degree)

List segmentation factors (gender, zip code)

Step 5: Analysis

Web analytics reports on email marketing campaigns can provide key insights by evaluating past campaign performance. Marketers can evaluate the following core metrics on a regular basis:

Delivery Rates: Email delivery can be a challenge because of spam filters and the fact that not all bounces are reported. This causes an increasing number of false positives. More and more permission-based emails end up blocked or redirected because of spam filters. It is believed that 20 percent of permission-based email messages are mistakenly blocked. You can improve your delivery rates by (1) asking your recipients to white list your email address, (2) performing careful list hygiene and (3) respectfully investigating spam complaints. Unfortunately, many marketers fail to implement these strategies (e.g., only 2 out of 10 email marketers ask recipients to add their email address to their address book).

Open Rates: Open rate stats are dependent on HTML images, but a large number of email clients do not support HTML or suppress it. This results in lower open rates. Because sender recognition influences open rates, you should use your company name in the "from" line and the subject line to increase the likelihood that your message will be opened. JupiterResearch estimates prevailing open rates at 30 percent. If yours are lower, you should elevate your brand image and ensure your messages are relevant to customer interests.

Click-Through Rates: JupiterResearch estimates average unique click-throughs at 12 percent. The key to getting click-throughs from your message is relevance and personalised content. Address recipients by name. Segment recipients by offers based on demographic or geographic variables. Segment by past behaviour (e.g., purchase history, email click history, site visits). Keep your content simple, direct and targeted. Too many elements or offers divert reader attention, lowering response. Focus on one main offer that is short and compelling. Pay attention to the look and location of your links. Make your desired action clear to recipients with prominently displayed links and big "click here" buttons surrounded by compelling copy to encourage action. Create urgency by providing incentives to act now (e.g., limited availability, offer expiration dates).

Unsubscribe Rates: Analyse your unsubscribes carefully. Separate new addresses from old ones and evaluate each list separately. If you see a lot of new subscribers opting out, it may be because you didn't deliver what was promised when they registered. Review your call to action to determine if it accurately reflects the information promised. If old customers begin to drop off, evaluate your past email messages for promotion freshness and merchandising persuasiveness. Unsubscribes can be reduced by offering preferences (e.g., frequency of emails and updates, choice of topics or product offerings). You need to build relationships with customers and prospects, putting them in control.

Conversion Rates: Your goal is to encourage action (e.g., purchase, newsletter sign up, white paper download, phone call, etc.) Your conversion rate is a measure of relevancy. JupiterResearch puts the average unique conversion rate for email marketing at 4 percent. This is a healthy return compared to response rates for other marketing strategies. Make a clear call to action and make it easy for recipients to comply. Customise the text, forms and buttons to reflect the current campaign when designing landing pages. Inclusion of a photo or graphic of the product can increase conversions by over 40 percent. Make the conversion process easy by populating forms with name, shipping address and other available customer information.

The following metrics are tracked less frequently, depending on company and/or campaign objectives:

Unique opens

Unique click-throughs

Bounce rates

Referral rates

Click to open rates

Net subscribers

Subscriber retention

Website actions

Number of orders/downloads

Total revenue

Average order size

Average dollars received per email delivered

Review the metrics within your web analytics programme, noting the results of key performance indicators. This will allow you to optimise for future campaigns. For more information on how to measure effectively using analytics, please visit our Web Analytics section.