December 10, 2007

Multichannel Retailer E-Mail Performance

This post talks about a study from eROI about 3rd quarter e-mail marketing performance, suggesting that multichannel retailers have an opportunity to improve performance.

If you are a retailer, you know that the vast majority of e-mail analytics tools significantly undercount multichannel opens and clicks.

Retailers have a huge advantage when it comes to e-mail ... it is called stores!

I've analyzed maybe four hundred different e-mail tests in a retail environment. In all cases, the open and click rates are below industry average. But over a five day period of time, conversion is literally doubled if you count the "incremental" orders driven to stores.

If you are a retailer, and want to demonstrate how effective e-mail marekting is, try this:
  • Randomly sample 10% of your e-mail list.
  • Split that segment into two groups. One receives your next campaign. One is held out, not mailed your campaign.
  • After a week, measure incremental performance between the mailed group and the holdout group.
You will see very different results than you are used to seeing. That's because traditional metrics don't include phone volume (which, interestingly, are often cannibalized) or store sales, in the results analysis.

The table below illustrates the poor results that vendors will tell the world about, vs. the accurate results you'll see via your test and control results.

Traditional Measurement Technique:

Open Rate


Click-Through Rate

Website Conversion Rate 1.50%

Average Order Size

$ per E-Mail Campaign

Incremental Benefit Of Multichannel E-Mail Campaign
Traditional Measurement = $0.09 Per E-Mail
Test Measurement Indicates $0.20 Per E-Mail

Phone Website Stores Total
Mailed Group $0.50 $0.50 $3.00 $4.00
Holdout Group $0.53 $0.39 $2.88 $3.80
Incremental Lift ($0.03) $0.11 $0.12 $0.20

Do you see the big difference?

When measured like the vendors measure results, you get $0.09 per e-mail. When measured via test/control groups, you get $0.20 per e-mail, because you observe the incremental increase across all channels --- fulfilling the promise of "multichannel" marketing, huh?!

To my multichannel marketing audience --- please don't get discouraged by folks who suggest your e-mail performance is poor. Just keep measuring things in an accurate manner, across all channels. Your performance is much better than the experts tell you it is!


  1. Anonymous11:15 PM

    Kevin, nice post and I agree, too many marketers at retailers or etailers only look at performance within each channel not holistically across channels. I am curious can you speak to us about vendors that you feel "get" multi-channel analytics and can report back to us marketers how many emails, direct mail pieces and DRTV ads produced a sale, for example.

  2. I don't think the e-mail vendor community is well-equipped to do this ... this community is so focused on one channel that they simply don't think about other channels.

    In the catalog world, Abacus and Experian have matchback algorithms that will tell you the multichannel return on investment of catalog or e-mail marketing activities. The matchback algorithms can be biases, but are better than nothing.


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