There have been many books and papers written about how to build or improve an email-marketing program. Making sense of it all, however, can be difficult. I’ve written this article to help novices gain the big picture of email marketing, while giving experienced email marketers a model for organizing their strategies for evaluating and improving existing programs.
Define Your Goal
Although the first step in creating an effective email-marketing program is establishing a clear objective or goal, many companies mistakenly create multiple goals for their marketing efforts. This can lead to a program that’s confusing for recipients and produces less than optimal results. We recommend establishing a single overall marketing goal and determining exactly how email marketing fits within it. Then, you’ll be ready to create your email. To help guide you, keep these two points in mind:
- What do you want your recipients to do when they receive your email?
- Why should they take that call-to-action that you’re asking them to take?
Your email design and copy need to be carefully developed while keeping these ideas crystal clear in your mind.
FulcrumTech’s 5 Metrics of Email Marketing Success
As you develop your email program, you’ll be attempting to establish measurable results or improvements that affect one or more of five primary metrics. There are numerous strategies and tactics for addressing each metric, but they all ultimately boil down to these five. By keeping yourself focused on the measurable result you’re trying to achieve, you’ll be able to establish your tactical priorities much more easily. The critical metrics to follow are:
- List size
Email marketing starts with your subscriber list. If you don’t have a list, you don’t have an email-marketing program. At the risk of sounding clichéd, size does not matter! We have clients doing quite well with lists ranging from a few thousand all the way to millions. What’s right for you comes down to your business model and your goals.
When you begin to develop or improve your list, think about how you might segment your list into groups of subscribers who have similar interests or needs. Equally important, when you start to establish metrics for your list, consider goals for the size of segments, as well as for the collection of relevant information that will help you create those segments with increasing accuracy.
- List quality
This leads us to the quality of your list. While not a metric in itself, list quality can be measured by looking at a variety of metrics, such as open rate, unsubscribe rate, spam rate, click-through rate, and inactive user rate (the number of subscribers who are no longer opening your emails).
If you have an existing email program, you’ll want to understand your inactive user rate first. If it’s high and/or growing—and you do nothing to manage it—your list quality will degrade quickly.
As you grow your list, be aware of the overall trend in your list quality metrics. The trend helps you understand the impact of everything you’re doing to build your list.
Finally, understanding the incremental impact on your list quality from each list-building tactic will guide you in terms of where you should place your investment in list growth tactics. So, every time you attend a trade show, place an ad, or use any other lead-generating tactic, be sure to consider not only the quantity of the leads you receive, but also the quality.
- Open rate
The open rate—the percentage of recipients who actually open your email—is one of the most watched metrics in email marketing. The open rate provides an indication of the following:
- List quality – If your subscribers have no interest in your organization, its products, its services, or its message, they won’t open your emails. It’s that simple. That’s why rented lists typically don’t work.
- Relevance – When subscribers consistently don’t open your emails, you may have potentially violated one of marketing expert and author Seth Godin’s primary rules of permission marketing—relevance. To be successful, the email must be meaningful to your subscribers. If it’s not, your open rate is one of the first metrics that lets you know…in spades.
- Message quality – Sometimes, subscribers like many of your messages, but not all of them. So your open rate may suffer temporarily if one message doesn’t resonate with or provide value to your audience.
At FulcrumTech, we’re often asked what an open rate “should” be. That question is akin to asking what a car costs—it varies. Some of our clients are thrilled when we deliver a level of 20% to 40%, while others are looking for somewhere between 80% and 90%. The bottom line is that the open rate is impacted by many factors. The key thing to look for is the trend of your rate over time.
There are numerous factors that impact the open rate, but it all comes down to the extent that the following elements resonate with your audience. Assuming you have a good-quality list, these are the four primary levers at your disposal to improve your open rate:
- From line – The familiar name that people see in their inbox (e.g. Home Depot)
- From address – The email address your recipients will see (e.g. [email protected])
- Subject line – A suggestion of what the email is all about, which helps readers decide if it’s relevant to them
- Preview pane – The top portion of the email, which can be viewed without opening the entire email.
- Click-through rate
Defined as the number of subscribers who click on a link within the email, the click-through rate tells us that they actually took the first action toward meeting your goals. So, it’s a direct measurement of the relevance of your message to your audience.
Again, there are numerous factors that impact this rate, and there are even more strategies and tactics that can be used to improve it. Some of the elements that may be adjusted can include the following:
- Main text
- Visual design and its impact on the eye path
- Trust-building elements (e.g. testimonials, statistics)
Knowing what to adjust and how to adjust it takes experience, but more importantly, a lot of testing. Such testing needs to be statistically significant. As Director of MECLABS Flint McGlaughlin often says, conducting an invalid test is worse than conducting no test at all. Why? Because if you conduct such a test, you could go off with the confidence that you should NOT have and make decisions that are based upon faulty data. How to set up tests in a statistically significant way is a great topic and one that deserves dedicated treatment in a separate article.
- Conversion rate
The conversion rate is the number of subscribers who take that final step of whatever call-to-action you’re seeking. In email marketing, the email “teases” or generates the interest, while the landing page seals the deal. A landing page is the Web page that people reach after they click on a link in the email. To emphasize, the key to your email is simply to get the click. Seduce them, encourage them, and excite them to click. Selling should be left to your landing page.
The correct way to measure the conversion rate varies by project, but this gets to your ultimate return on investment. How many transactions did you achieve? How much revenue did you generate? What was the revenue per transaction? How many people signed up? How many people filled out your form? Once they filled out that form, how many went on to ultimately purchase something? How many more transactions did that new purchaser typically make over a 6-month period?
How you improve landing-page conversion is again the subject of many books, courses, and articles. To increase your conversion rates, you’ll want to focus on applying rigorous metrics, testing, and leveraging good, solid experience. There’s a lot of science to email marketing, but a little art doesn’t hurt.
When you start to really focus on the metrics that matter to your business, the areas you need to focus on for improvement will become quite evident. You’ll soon come up with your own driving principles for your program and reap the rewards that you desire.
Need help? To learn more about any of these aspects of email marketing, call FulcrumTech at 215-489-9336 or contact us online.