Optimizing email communications is one part art and one part science. This is the fourth installment of a five-part series that explores the essential elements of creating effective and efficient email communications. In the first part, we looked at strategy. Next, we talked about relevancy. Last time, we discussed the importance of creating valuable email dialogues with your customers. Today, we’ll tackle how to analyze your email communications program, discussing what tangible and intangible metrics you should measure.
Part 4: Measure and Analyze
Email is every marketer’s dream. From testing to segmentation to optimization, no other medium can compare when it comes to delivering real-time, actionable data and intelligence.
In an economy where marketers are rigorously accountable for every dollar spent, the ability to attach hard numbers to a marketing program to calculate return on investment (ROI) is essential. However, just because email is generally more measurable than other media, including TV, print, and outdoor, using it doesn’t mean you will automatically produce clear results at the conclusion of each campaign. As we emphasized in the first installment of this series, it is critical to set up your goals, objectives, and measurements of success prior to launch. Doing so will allow you to implement the appropriate tracking mechanisms, which will help you gain a greater understanding of your results through ongoing analysis and testing.
Results and metrics can fall into two general categories: tangible and intangible. By measuring both types of results, you can more easily analyze a campaign and pinpoint how successful your efforts were — in relation to your goals and objectives and in comparison to industry benchmarks.
Measuring and analyzing tangible results is the bread and butter of a smart testing strategy. Top-flight email technology platforms track most tangible results automatically for marketers and allow for split-offer testing.
Tangible results may include:
- Deliverables, bounces, and undeliverables
- HTML open rates (subject line performance)
- Clicks and responses (actions and inactions)
- Offer performance
- Copy and creative performance
- Format performance (text versus HTML versus rich media)
- List performance
- Segment and test cell(s) performance
- Viral marketing referrals
- Conversions and sales
- Cost per sale
- Cost per acquisition/cost per lead
- Repeat purchasing
Marketers may also consider implementing advanced tracking technologies that provide additional intelligence — including click-stream tracking and analysis to measure conversion. It is important to understand the most popular navigation routes from your messages to the transaction point, and to determine your effectiveness in closing the deal at the point of sale.
Another key area to measure is the impact and influence of email communications on other online and offline channels. An increasing number of consumers use multiple channels to transact business. In fact, Jupiter Media Metrix estimates consumers will spend $647 billion offline by 2005 as a direct result of research it conduct on the Web.
Conversions and sales generated by email can be tracked and analyzed across multiple customer touch points — such as call centers, physical retail locations, and e-commerce sites — by doing customer match back analysis.
A technique growing in popularity in tracking cross-channel transactions is the use of unique code numbers in emails — similar to those used in coupons — which the email recipient redeems in an online or offline transaction environment. These codes provide an easy and accurate way to track the effect of email promotions on other channels.
Marketing is never a one-dimensional environment. Care and consideration should be given to measuring the intangibles. Even though they are typically less simple to track, measure, and analyze, customer research — such as surveys, questionnaires, and focus groups — can be enormously insightful, particularly if research is conducted before and after the marketing initiative. Measuring changes in the intangibles may include looking at a variety of important attributes that can differentiate you from the competition, improve the total customer experience, and build equity for the enterprise.
Intangible results can include:
- Customer satisfaction
- Brand awareness and perception
- Brand preference
- Brand consideration
- Brand enthusiasm
By analyzing your tangible and intangible results in tandem, you can do a better job building “best customer” profiles, determining the lifetime value of customers, and measuring your efforts to solidify your presence in this emerging customer communication channel.
Furthermore, remember to create best practices by analyzing your full results — not just on an individual campaign basis but also in comparison to similar campaigns and programs over time. By implementing and updating these best practices on an ongoing basis, you will be on the road to optimizing your email communication efforts, isolating key elements of a winning strategy, and replicating success in the future.
Case Study: A Major Telecommunications Provider
Background. Traditional mail-based billing costs at a major telecommunications provider were mounting significantly due to rising printing, paper, and postage prices — on top of customer service and operational costs. The company sought to increase the efficiency of its billing system to help reduce costs while creating new cross-sell/up-sell revenue streams. Additionally, in an industry where fickle customers tend to frequently switch providers, improving customer loyalty and reducing churn were also key issues.
Solution. The company embarked on a large internal initiative to test and potentially migrate as many customers as possible to an online billing system that featured highly personalized email statements and alerts. An email communications program was developed and launched as part of an integrated marketing initiative to help encourage more customers to enroll in the e-billing service.
Results. Over the course of several months, nearly 35 percent of the customer base moved to the e-billing program, saving the company more than $2 million in direct mail costs and operational efficiencies. Customer loyalty also improved, which was critical on many fronts. As Yankee Group recently pointed out, customers who take the time to register for an online account are less likely to jump ship to a competitor.
Lessons learned. By establishing clear and measurable goals on the front end, the company analyzed its program’s success with a high degree of accuracy on the back end. In addition to lowering costs, improving efficiencies, and building stronger customer loyalty, the company was also able to more effectively cross-sell and up-sell customers with highly relevant offers in each email, thereby building additional revenue.
Next up for part 5: We’ll discuss how to integrate your email communications with other elements of your marketing mix to help boost your overall ROI.
Note: ClickZ Email Strategies takes place next Monday and Tuesday, May 21 – 22, in New York.
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