I've mentioned many times that email marketing remains the leader of cost-effective, digital marketing channels. Email is one of the best channels to nurture your B2B leads, generate key referrals, and stay top of mind with your non-purchasers.
However, many marketers want to know how they can demonstrate email's value to their organizations. This is especially important for marketers who support sales organizations, market products with long sales cycles supported through many marketing channels, or who drive both online and offline sales without a clear connection from the email campaign to the sale.
If you aren't an online-only retailer, it's often difficult to identify direct revenue attribution from the email channel to your sales. Complex sales and those closed in other channels often don't get credited back to the email message that piqued customers' interest.
Assessing Your Success
Determining the value of an email campaign is an essential part of any email marketing strategy. If you don't have a clear objective, or if you can't measure your results, you're hard-pressed to gauge your email program's success.
If you can't establish value, your program is vulnerable to budget cuts and staffing changes. Developing a method to measure success is the key to demonstrating the true value email has in your organization.
Below, I will present some alternatives for measuring the value of the email channel.
Direct attribution is the most accepted way of determining the email channel's value. Attribution is typically tracked using a campaign code that passes through the transaction process to tie the campaign to the revenue generated.
However, email-generated revenue often gets overlooked by direct attribution when your subscribers don't click on the coded link in your email. This prevents the campaign code from passing into the transaction process.
This disconnect happens when customers read your email but go to your website on their own via a bookmark or search result instead of clicking the email link, or buy from a salesperson or call center.
Influence of Email
Gauging the influence of email has become more widespread because of these direct-attribution issues. This process compares the revenue generated from email subscribers with revenue from non-subscribers over a specific time period, such as a year.
This process allows you to isolate your email program's influence on revenue because the email program is the only unique variable. However, marketing executives don't accept this process as widely as direct attribution. They say that revenue using this method can be attributed to several channels at once because a customer might have received email, direct mail, phone solicitations, and messages from other digital marketing channels such as display or search during the same time period.
My response is that the most effective marketing strategy today is multi-channel. It's important to gauge the influence of all channels rather than try to isolate revenue directly to one channel.
Multiple touch points can influence the purchase decision. Your goal should be to determine your optimal multi-channel campaign mix.
The Value of a Lead
Marketers who support sales organizations can also try calculating the value of a qualified lead that's generated by the email program.
Qualified leads can be defined when email subscribers "raise their hands" in response to your email marketing efforts and provide key data points that indicate they are "in-market" for the product via an online form or a call center interaction.
Calculate the average value of these leads by taking the overall revenue generated from a certain product and dividing the total by the number of qualified leads generated via email. Use this value to estimate the revenue value generated by your email campaigns.
If all else fails, use the "point value" method to determine the value of your email program. Your first step is to work with your stakeholders to determine the value of a click on a specific link in your email.
Clicks on the main call to action, such as completing a lead form or downloading a white paper, can have one value. Secondary content, such as cross-sell or category links can have another slightly lower value.
Clicks to the social links or navigation can have a third, even lower, value as determined by the objective for your email campaigns. Clicks to the unsubscribe link can even hold a negative value.
Next, calculate the value of your email campaign by totaling the number of points earned based upon the clicks driven by the campaign. If you've done a good job linking your email campaign objective to the click values, the higher the value earned, the more successful your campaign should be at achieving your objective.
The Last Word
As I've shown, many creative ways can demonstrate the value of the email channel to your organization. Address this challenge with one of the methods outlined above.
When you get it right, you'll not only demonstrate the value but also continue to build and optimize your email program so that it's laser-focused on your marketing objectives.
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Mike Hotz is a senior strategic consultant for Responsys, working with clients to design, develop, and execute cross-channel digital marketing strategies that contribute to their cross-channel digital marketing success. As an industry veteran, Mike has worked in e-mail marketing since 1998, designing, building, and executing e-mail and multichannel direct marketing strategies focusing on increasing customer engagement, nurturing leads, supporting sales organizations, and driving revenue for companies such as CDW, OfficeMax, Grant Thornton, and Digitalwork.com.
March 19, 2014