Oh sure, you can easily articulate the open rates, click-thru rates, conversion rates, and demand per e-mail that you drive to your online channel.
But can you actually determine if the sales you are saying you drove actually happened because of the e-mail campaign, or would they have happened anyway, if no e-mail campaign occurred?
Here's something for you to try.
- Take a random sample of e-mail subscribers.
- Divide that sample in half.
- The first half receive all of your e-mail campaigns for a month.
- The other half receive no e-mail campaigns for a month.
|Received All||Did Not|
|E-Mail Blasts||Receive E-Mail|
|Total E-Mails Sent||400000||0|
|Average Order Size||$125.00||$0.00|
|Non E-Mail Demand||$175,000||$250,000|
|Total Monthly Demand||$306,250||$250,000|
This is an analysis that must be done for all e-mail marketing programs.
This analysis suggests the following:
- When you send e-mail campaigns to this customer segment, you'll get $131,250 of e-mail demand, and $175,000 of non e-mail demand, for a total of $306,250.
- If you do not send any e-mail campaigns, customers increase their non e-mail demand from $175,000 to $250,000.
- Therefore, e-mail campaigns did not truly drive $131,250 of demand. Instead, e-mail campaigns actually drove $131,250 - ($250,000 - $175,000) = $56,250.
- Only $56,250 / $131,250 = 43% of the e-mail demand you are recording in your reporting is truly incremental. The remainder of the demand is being cannibalized from all of the other online orders you would generate.
Our industry needs to incorporate analytical discipline to e-mail marketing strategies. By taking a page out of the catalog analyst's tool-kit, we can better understand the true value of our e-mail marketing activities.