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Creating an Engagement Index

  |  December 19, 2011   |  Comments

How to establish a scoring system to assess the health and performance of your email subscriber list.

As an email marketer, it is vital to understand the overall engagement of your list of subscribers. While based on a single mailing it may be easy to view aggregate measures, such as unique click-through rate, often I find that many are not looking at such audience engagement measures over time.

Understanding audience engagement on both a macro and subscriber level is important to determining which subscribers have churned or are showing signs that they are about to leave. A consumer survey conducted by my consultancy found that 30 percent of consumers changed or created a new email address in the past year. Developing key performance indicators and using them to build an engagement index is a necessary tool to determine how many of these address churning subscribers are on your list. Here's how to do it.

First, develop key performance indicators. Although rates for open, click-through, conversion, and delivery are useful to know, they are also the necessary ingredients for developing an engagement metric to trend the health of a mailing list or segment over time. Along with the aforementioned metrics, add the unsubscribe rate, spam complaint rate, new subscriber rate, and hard bounces to a quotient that directionally indicates the quality and performance of the mailing list. Each sub-metric can be individually evaluated, but rolling all of them up into one metric is an easy way for marketers to gauge the health of subscribers over time. With these key metrics in place you are ready for step two.

Next, take all the key performance indicators, and score them on a three-point scale, with the value of 1 when you are below your benchmark average, the value of 2 when you are at or within 2 percent of your benchmark average, and the value of 3 when you are 2 percent or more over your benchmark average. Apply this approach to all your major key performance indicators, and sum them up. The higher the number, the better your list is performing. It signals that your audience is relatively engaged with you. For the purposes of illustration, your engagement metric calculation may look like the following.

How to Create an Engagement Scorecard
Note: These numbers are for illustrative purposes only. They are not industry average benchmarks.
  Score
Delivery rate = 95% 3
Open rate = 24% 1
Click-through rate = 12% 2
Conversion rate = 1.5% 2
Percent of list clicking within past month = 50% 3
Opt-in rate = 3% 3
*Spam complaint rate = 10% 1
*Unsubscribe rate = .01% 2
Total engagement score 17
*With the spam complaint and unsubscribe rates, the higher the number for these metrics, the lower the score should be

The overall engagement score in this example is 17. Although each metric is a key performance indicator, rolling up the metrics in a scoring system like this will give you a quick snapshot of the audience's health and its performance. If there is a big change from mailing to mailing, it is easy to identify which individual key performance indicator is dragging you down.

From here you can begin to focus on subscriber behavior when creating audience segments. Create engagement rules (for example, the number of subscribers clicking at least one link during past three or four mailings vs. those clicking more frequently and those not clicking at all). This approach will create a behavioral segmentation framework to drive subsequent mailings and remarketing campaigns and in turn provide an overall effective means of targeting subscribers based on their engagement. Applying this approach to reactivation mailings can help spot dormant subscribers and with the right offer breathe new life into dying ones.

Until next time, keep on mailing.

David

This column was originally published on Sept. 12, 2011 on ClickZ. 

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ABOUT THE AUTHOR

David Daniels

For more than 20 years, David has been an industry proponent. Direct Magazine said David is "one of the most influential experts in email marketing, if not the most influential." Co-author of "Email Marketing An Hour A Day," David has held senior level positions at Forrester and JupiterResearch, Apple, Anthropologie, MacWarehouse, Proteam, and retailers that dotted the early days of CompuServe. David advises many industry organizations including the OTA, DMA, eec, and has been a contributor to the Weekend Today Show on NBC. Learn more about connected marketing and download free research with registration here. Follow David on Twitter @emaildaniels and learn more at www.relevancygroup.com.

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