April 14, 2020

Like Taking A Bat To A Beehive

Telling readers what qualifies as a good email marketing program is like taking a bat to a beehive.

Here are three ways to consider if your email marketing program performs well.
  1. 15% - 20% of annual e-commerce sales (or more) come from your Email Marketing Program.
  2. 35% or more of annual e-commerce sales among best customers come from your Email Marketing Program.
  3. You generate between $0.12 and $0.20 (or more) per individual email delivered.
I offered ideas, and you responded. So let's address your frequently asked questions, now that you're angry!! I'm going to answer them in a modestly testy manner in an effort to motivate you to focus more on the least expensive traditional outbound channel you have ... remember, if your sales are -20% or more your CFO is coming after your marketing budget ... this means you have no choice but to get the heavy lifting done via email. No choice.

Away we go.

Question:  It's obvious you are using last-click attribution and that's why your numbers look so ridiculous. Join the real world and use a quality attribution algorithm and you might come up with numbers that make more sense.
  • When I use various attribution algorithms I've developed, I find that email contributes MORE annual volume that last-click gives it credit for. In other words, you buy from email today and it causes you to buy from search in a month. Email should get credit for that, right? This happens all the time in my project work. So I am frequently under-counting the impact of email marketing in the numbers I cite. I am citing under-counted figures.
Question:  We generate $0.09 per individual email delivered. We think we do a great job. Are we doing a great job?
  • You are doing a good job.
  • I'm asking you to be great. Email must do the heaving lifting now that the world has changed. Email is close-to-free, and you need all the close-to-free marketing activities you can find, going forward. Your CFO is coming after your marketing budget if your sales are down 20%.
Question:  I can manipulate the $0.12 to $0.20 figure per email delivered by not mailing the worst-performing email addresses. Isn't your figure biased as a result?
  • You should manipulate the figure.
  • Why not mail your best email addresses 7 times a week and mail the marginal ones twice a week and test the living daylights out of the marginal names to find a strategy that works for them? You'll learn a ton, you won't impact annual sales, and you will improve sales per individual email delivered.
  • You have to manage this metric in relation to 15% - 20% of annual e-commerce sales generated by email marketing. If you cut out the bad names and you lose sales, that's no good.
Question:  We generate $0.04 per email delivered. We think you are nuts to expect $0.20 per email delivered. Our customers are unique and our customers are special. They buy from many channels, like Instagram. Everybody knows you should ignore silos and look at the customer in a holistic manner. Shouldn't you look at our total digital strategy instead of isolating your results into a silo? 
  • No.
Question: Please explain why we should silo email marketing performance?
  • You actually have full control over email marketing (with the notable exception of delivering the email to the inbox). You control creative. You control the merchandise. You control the message. You control personalization. You control the promotional strategy. You control sale vs. full price selling. You control new items vs. existing items.  You control cheap items vs. expensive items. It's all you. Tell me what, exactly, you control when you are bidding for the keyword "khakis"??? You devote excess energy to any marketing channel you have excess control over.
Question:  We're a catalog brand, and as you know the catalog is the center of our marketing strategy. After all, we matchback most email purchases to catalogs, so we'll never achieve great performance. Shouldn't catalogers be held to a different standard, given how productive catalogs are and how unproductive email campaigns are? 
  • No.
  • The best catalog brands gradually stop sending catalogs and gradually improve and increase the importance of the email marketing program. The result is constant sales, reduced expense, more profit, and increased share of e-commerce sales from email marketing. I've watched this trend unfold for more than twenty years across hundreds of brands.
Question:  If a customer buys from a subscription service, how do I measure the lift I get via email marketing?
  • Run a six-week email mail/holdout test.
  • After six weeks, look at how many more subscriptions are renewed in the mail group vs. the holdout group. The difference (and dollars associated with the difference) represent the impact of email marketing.
Question:  Why would I ever execute an email holdout test? In these trying times, shouldn't I generate every penny of sales possible?
  • If you follow that logic, you'll never execute a holdout test. When sales are good, why would you give up even more sales potential? When sales are average, why would you execute a holdout test and then miss your marketing plan? You can always rationalize not executing holdout groups. Email marketing is a much worse offender at this than catalog marketing.
  • Did you know that the smartest marketers know what the exact incremental benefit of any marketing channel is? They know this because they execute holdout tests and/or they greatly reduce spend in non-push channels to understand the impact of that channel. Are you a smart marketer?
Question:  Why would we work so darn hard to personalize email campaigns via the merchandise the customer wants when I can just tell the customer to SHOP NOW and let the customer click on the link and buy whatever the customer wants to buy? Isn't my approach more customer-centric than your approach?
  • No.
  • The reason email marketing doesn't work is because we all just tell the customer to SHOP NOW. Do we really think that the customer, after 250 email marketing campaigns a year for 15 years across a dozen brands a day doesn't realize that the customer can SHOP NOW?
  • Lead the darn customer. 
  • Be a marketer!
  • Tell the customer what to buy.
  • Tell the customer WHY the customer should buy something.
  • Show the customer the merchandise you already know the customer loves (via prior purchases and website visits/views).
  • Work hard.
Question:  Is it possible that everything you are saying is wrong and the entire email industry has evolved to a point where it is optimized and is "right"?
  • Yes.
Question:  You're telling us all about email metrics because you want us to buy your QuickScores product at a time when the world is coming to an end. You are just trying to stay in business, aren't you?
  • That's been the case for the fourteen years I've written this blog. Yes, I have to stay in business. And I have a sense of urgency about keeping my job, just like you do.
  • But I've also given you free information that you can take back to the virtual office. You can implement free learnings at no cost, and then generate profit without ever paying me a penny. Why wouldn't you go do that right now, making yourself look good in the process? Remember, I don't get paid, but you'll look good. How do you lose in that scenario?
Question:  We don't link email clicks to customer_ids. Is that bad?
  • Yes.
  • "Good" performing email marketers store each email click, date, and page landed on in their customer data warehouse. They use this information to personalize email campaigns. They use this information to suppress expensive print campaigns. They use this information to better target loyal customers in loyalty campaigns.
  • We linked this stuff when I worked at Nordstrom in 2006 ... in 2006!! You can do this today, it's not hard.
  • Odds are your email service provider will JUMP at the opportunity to help you integrate email data with your customer data warehouse. Odds are 90% or greater. Partner with your vendor ... right now!!
Question:  Email personalization is just too hard with too little gain. We're not doing it, ok? What else do you have up your sleeve that we could implement? Do you have any ideas for improving open rates?
  • Look at it this way. Say you send 200 email campaigns per year. Say you generate $0.07 per email delivered (good performance, not great). Say you'll get a 20% bump from merchandise personalization. Say you have 500,000 email subscribers.
  • Without merchandise personalization, email delivers 200 * $0.07 = $14.00 per customer, $14.00 * 500,000 = $7,000,000 net sales per year.
  • With merchandise personalization, email delivers 200 * $0.07 * 1.20 = $16.80 per customer, $16.80 * 500,000 = $8,400,000 net sales per year
  • Let's assume that 40% of sales flow-through to profit. Let's say you have to spend $100,000 to get a vendor (not me) to help you personalize email campaigns from a merchandise standpoint:  Profit = ($8,400,000 - $7,000,000) * 0.40 - $100,000 = $460,000 profit.
  • At $460,000 profit, tell you CFO that you'll split the profit with her ... $230,000 for you, $230,000 for her.
  • Why would you sit there and do easy work when you could work a little harder and help your company generate $460,000 of profit?
  • Think you'll get to keep your job if you generate $460,000 of incremental profit in the middle of a plague?
Question:  Surely you agree that mobile/social is important and that email is marketing relic from the late 1990s?
  • No.
  • Now having said that, why can't you personalize the merchandise assortment in the mobile world to improve conversion/response?
Question:  I can make my email metrics look great ... all I have to do is offer 50% off and free shipping and BOOM look at me, I'm a genius. Of course, I won't have any profit, but that's the issue when you make dumb, sweeping statements.
  • Ok, then change the metrics to better fit your business, since you like to cheat.
  • Instead of $0.12 to $0.20 of net sales, shoot for $0.05 to $0.08 of profit per email delivered.
  • Now what do you have?
  • I'll bet you under-perform the $0.05 - $0.08 metric. Now the onus is back on you to improve.
Question:  Nobody at our company cares about email marketing except for Cyber Monday. Why work hard on something nobody cares about?
  • Why do you think it is that nobody at your company cares about email marketing?
  • Could it be that because you and your marketing team don't have any passion, and that leads to nobody else having any passion as a consequence?
  • What would happen if you screamed about the positives of email marketing twice a day for two years to anybody who matters at your company?
Question:  Where are you getting your metrics from? I've read a ton of Forrester Research papers, and I've read a ton of white papers from Leading ESPs and none of them cite the data you cite. Is it possible you're just biased by a sample of clients that aren't representative of commerce as a whole?
  • Yes.
  • I've worked with 225+ companies and I've measured share of e-commerce volume for those companies. I know how companies perform, from an overall standpoint and from an email marketing standpoint.

I'm trying to communicate that this email stuff is really important ... and from what I'm hearing readers are not taking email marketing seriously enough. You can generate a ton of profit without a ton of work ... you just have to do some work. Money is just laying there. Go pick it up!!! Do it before your CFO trims the budget so far that your brand is struggling to succeed beyond what the plague is causing.

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