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:
- For a specific division or product
- To a specific audience or segment of your list
- Of a specific type of email, like newsletter or promotion
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:
- Data source: tends to be small companies, including many non-profits
- Wide variety of industries, which are very granular, including “nonprofit: religious organization,” “nonprofit: arts organization,” and “salon and spa”
- Not a report, per se – benchmark data provided along with email metrics for customers; it’s perpetually there, no idea how often it is updated
- Data source: more than 700 Eloqua B2B and B2C customers; tends to be larger companies that rely heavily on marketing automation
- It publishes benchmarks by sector, including “consumer services,” “education,” and “manufacturing”
- Free; the most recent report I can find is from April 2011, although it says the reports are published bi-annually
- Data source: Epsilon customers, who tend to be large companies
- “Business publishing/media general,” “consumer publishing/media general,” and “retail specialty” are three of the industry segments they provide data on
- Free; published quarterly, most current available report is Q3 2012
- Data source: CheetahMail customers, who tend to be medium to large companies
- Includes breakdowns by “catalogers,” “multi-channel retailers,” “travel,” and other industry segments
- Free; they call it a quarterly report, but the most current I could find was for Q2 2012
- Data Source: over 700 large and mid-sized associations that are Informz clients
- Breakdown is done by type of association and industry, which include “business and trade associations: banking,” “professional and trade associations: marketing,” and “other organization types: labor unions”
- Free; it’s published annually
- Data source: over 9,000 sends done by companies renting MDR lists to reach educators
- No segment breakdown that I’m aware of
- Sold for $499; the report is published annually
- Data source: billions of emails per month sent by more than two million MailChimp users; only includes send of 1,000 quantity or more; customers range from one-person start-ups to Fortune 500 companies
- Industry segments include “beauty and personal care,” “ecommerce,” and “pharmaceuticals”
- Free; last published in December 2012
- Data source: over 1.2 billion opt-in email newsletters; customers tend to be small to medium-sized organizations
- “Computer,” “large business,” and “religious” are three of the many segments it breaks its data down by
- Free; published bi-annually or annually
- Data source: surveys of MarketingSherpa readers
- While it publishes a benchmark report, it doesn’t include the traditional bounces, opens, and clicks metrics; it’s more about how budgets are increasing or decreasing, which tactics users are having the most success with, and things of that nature
- $397 for PDF version; published annual, with 2012 report (from October 2011) being the most current available
- Data source: Marketo clients, who are primarily B2B, using marketing automation for lead generation and lifecycle marketing
- Report is customized; you provide information and it publishes a report based on the industry you are in (so no list of industry segments to report here)
- Free; not certain how often the data is updated but appears to be annually
- Data source: sends by 1,124 brands in 20 countries that are Silverpop clients over the course of a year or more; clients tend to be medium to large companies
- Industry segments include “consumer software,” “nonprofits,” and “real estate and construction”
- Free; published annually
- Data source: all messages sent by Yesmail clients, who tend to be large to enterprise-sized
- “Entertainment,” “publishing,” and “retail” are three of the industry segments it covers
- Free; but may only be available for clients (I couldn’t find a current report online)
Until next time,
Email image on home page via Shutterstock.
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