E-Mail by the Numbers

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Many recent e-mail columns offer a slew of tactics to help improve e-mail results. Subjects include how to optimize creative, improve strategy, grow a database, and make customers feel bonded to you. But how do you know which will drive the biggest return?

By practicing e-mail by the numbers.

When my team sees me go to the whiteboard, I can almost hear them cringe. They know I'm going to talk numbers. E-mail is a two-way dialogue. Success is driven by strategies based on solid metrics. Here are some great lessons learned when we did e-mail by the numbers.

If the Math's Too Easy or Results Are Too Good, You're Missing Something

A client wanted us to forecast 2007 sales using her current e-mail program as a base. She wanted to see how far from her goals she might be. When we first looked into her current program, the numbers seemed simple. We determined the conversion rate from the current list:

100,000 addresses at a 1 percent conversion rate = 1,000 sales at $50 each = $50,000 per month

Then, we factored in list growth and attrition. The list of 100,000 addresses had an estimated loss of 30 percent (30,000) over the course of one year. The average unsubscribe and bounce rate totaled 10 percent of the list (10,000). Then we added in estimated new subscribers, about 0.5 percent a month (6,000 a year). Using that calculation we can up with a much lower revenue potential: only 66,000 names.

Every Campaign Element Has an Important (But Different) Effect on Results.

Figure out which elements are key to campaign success; they're not always the same.

When we went back to the client with the two scenarios, she said we absolutely needed to figure a way to make the numbers close to the first set of results. We used our numbers-based approach for every campaign variable.

Beginning with basic response rates, we looked at how revenue would be affected if we doubled open rates, increased click-throughs by 15 percent, and reduced landing page attrition by 40 percent. We also factored in spending to drive new subscribers. In the end, not only did we learn which elements would provide the biggest revenue impact, we prioritized our focus for improvement using these results.

The client was thrilled, and we were able to help her meet her goals. I doubt we would have been able to prioritize our focus as effectively without going through the numbers.

Sometimes, Numbers Bring You Back to Reality

Another client recently told us its e-mail campaign was performing horribly because of poor creative. Instead of weighing in on the creative, we asked for a bunch of numbers: the base it was sent to, delivery rate, open rate, click rate, click-to-open rate, unsubscribe rate, and conversion rate. We discovered the open rate was 1 percent. Aha! Could this e-mail creative have been so terrible no one dared even open it for fear of what it might say? I seriously doubt it. Instead, we reviewed the list's deliverability and the subject lines.

When There's No One Else to Blame, You Can Usually Blame the Numbers

A final example is from a client who said they wanted to use e-mail rental, because it's cheap, to grow the e-mail list to 2 million names in six months. At the time, the client had less than 50,000 names. If you do the math on this, it simply doesn't work. For instance, if the market size is about 5 million, the client's trying to capture opt-in on one-third of the entire available market. Given standard opt-in rates on third-party list rentals, even with multiple mailings, trying to get 2 million names in six months is an unrealistic goal. Unless we e-mailed everyone on the planet several times, the conversion would never provide this client with what it needed. Instead, we made alternative recommendations and reset expectations.

If you haven't taken a numbers-based approach to prove your current theories, to forecast, or to prioritize your testing focus, take a few minutes to try it out. You'll find results can be pretty compelling and very addictive. And they just may uncover something new.

Want more e-mail marketing information? ClickZ E-Mail Reference is an archive of all our e-mail columns, organized by topic.