One of the first things I do when I begin working with clients is to identify benchmarks to measure future performance against. There are two high types of benchmarks: internal, based on the past performance of your own email campaigns; and external, based on what others in the industry are seeing. Here are tips for identifying and using both.
If your organization has been sending email, even for just a short while, you can and should use data from these past sends to create internal benchmarks. Bounce rate, open rate, click-through rate, and click-to-open rate are standard benchmarks that are easy to develop; with my clients we go beyond these standard email metrics to benchmark conversion rate, revenue-per-email-sent (RPE), and, when possible, return on investment (ROI).
These additional metrics go more to bottom-line goals than the traditional email metrics. You'll need to pull in data from your web analytics and/or shopping cart program. It's a little more work, but they will give you a better view of how your email marketing is impacting your bottom line.
I start by developing benchmarks for all sends by month or by quarter; you can also develop more specific metrics that provide more detailed insight into sends:
Internal benchmarks are very powerful; the data comes from your performance so you can see where your email marketing is more effective than in the past - and where it is not. What internal benchmarks don't allow you to clearly identify are macro trends in email that may be impacting the success of your marketing campaigns. This is where external benchmarks are useful.
External benchmarks are somewhat controversial and I understand why. With external benchmarks you have less information about the source of the data. Which companies' email campaigns are included in the data? What is the make-up of their lists? Why should you assume that their email marketing programs bear any resemblance to yours?
It's true, you don't know. But that doesn't mean there isn't value here. For example, let's say your average click-through rate fell from 4.9 percent to 4.6 percent quarter-over-quarter - a 6 percent decrease. You'd be concerned. But if you saw that the benchmark you use fell from 4.6 percent to 3.9 percent quarter-over-quarter - a 15 percent decrease - that would provide some insight. It would suggest that macro factors - not your house list or your creative - were behind the drop. You'd still look to improve your performance, but you'd be less concerned that there was a problem with your list or creative.
How do you choose a benchmark? I start by looking at the source of the data. Find out what types of companies, in both size and industry, are generating the data. You want the data sources to match your organization as closely as possible.
Start with size; most organizations providing benchmarks are email service providers (ESPs). It's rare to find an ESP that caters to both very large and very small organizations, so narrow the field by determining which has clients most like your organization. Most of my clients are enterprise-sized companies, but I am also editor of the newsletter for my not-enterprise-sized church. I use different benchmarks for each, based on their size.
Next, look at industry sector breakdowns; it's always nice when you can use an external benchmark based on data from companies in your own industries. Most benchmark reports provide both aggregate and industry-specific data, but the choice of industries varies. For instance, Epsilon separates "business publishing/media general" from "consumer publishing/media general," while Experian has a single "publishing" industry benchmark. Identify benchmark reports that include sector benchmarks that are appropriate for your industry.
Finally, track your historic performance against the benchmarks you are evaluating. Here I'm looking for patterns, not necessarily whether your organization's performance is better or worse than the benchmark's performance. See which benchmark your performance has most closely tracked historically to get an idea of which you should be using in the future.
Here is a list of some available benchmarks you can evaluate to compare your own email campaigns against:
Until next time,
Email image on home page via Shutterstock.
Meet Your Favorite ClickZ Contributors
Many of ClickZ's leading expert contributors will be at ClickZ Live, the new online and digital marketing event kicking off in New York (March 31-April 3). Hear from the likes of: Jeremy Hull, Lisa Raehsler, Andrew Goodman, Bryan Eisenberg, Mathew Sweezey, Aaron Kahlow, Stephanie Miller, Simms Jenkins, Jeanne S. Jennings, Dave Hendricks and more!
Jeanne Jennings is a 20 year veteran of the online/email marketing industry, having started her career with CompuServe in the late 1980s. As Vice President of Global Strategic Services for Alchemy Worx, Jennings helps organizations become more effective and more profitable online. Previously Jennings ran her own email marketing consultancy with a focus on strategy; clients included AARP, Hasbro, Scholastic, Verizon and Weight Watchers International. Want to learn more? Check out her blog.
March 19, 2014