December 12, 2016

How Do I Know When Email Marketing Needs To Be Rebuilt?

This one is easy!

There are several metrics to look at.

First, I like to look at the number of customers who clicked through at least one promotional email campaign in the past year. Here's an example.
  • 2016 = 449,384
  • 2015 = 467,198
  • 2014 = 490,559
Easy to see - fewer and fewer customers are purchasing from email marketing campaigns. Do you calculate this metric?

Then, I look at customers who clicked through at least two email marketing campaigns.
  • 2016 = 270,394
  • 2015 = 280,493
  • 2014 = 270,169
Oh oh. We see a different trend. For me, the number of customers purchasing from 2+ promotional campaigns per year is a big deal ... the number needs to increase year-over-year. It's easy to astro-turf one click a year ... it's harder to get 2+ clicks per year.

Then, I look at customers who clicked through at least twelve email marketing campaigns per year.
  • 2016 = 60,381
  • 2015 = 58,994
  • 2014 = 55,005
Ok, now we have a story. The email marketing team is "over-optimizing" the file ... resorting to tactics that appeal to the best email subscribers. The infrequent portion of the file ... the vast majority of the file mind you, does not like the strategy and is beginning to ignore it. But the top of the file loves it.

Two more tables - I like to look at $ per email. How much demand is attributed to each campaign?
  • 2016 = $0.174
  • 2015 = $0.169
  • 2014 = $0.165
You can make an argument that emails are more productive - and are more productive because the best email subscribers are responding.

The final table evaluates gross margin dollars less marketing promotions, per email delivered. This usually reveals success/failure.
  • 2016 = $0.053
  • 2015 = $0.061
  • 2014 = $0.071
That's a big story.

Once we back out cost of goods and marketing promotions, we can see that we are astro-turfing productivity with discounts, promotions, and low prices.

In this example (and this happens all the time), the email marketing team is trashing the value of "the brand". The campaigns increasingly speak to a subset of the customer file, and are less "relevant" to the majority of the customer file. When customers purchase because of email marketing, the customer is spending more but generating less profit - a sure sign that discounts / promotions / low-prices are being leveraged to make opens/clicks/conversions look good. And sure, opens/clicks/conversions will look good, but the bottom line is all that matters, and the email marketing team is hurting the bottom line.

I see this story repeated - often. When I see it, I know that the email marketing program needs to be rebuilt from the bottom-up. Plug this need into the seven initiatives below, and get busy.

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