This is a re-post from a Marketing Sherpa document on the effectiveness of email. Read and enjoy...
Gauge Email’s Impact on Indirect Sales: 5 Metrics to Monitor
SUMMARY: Email marketing isn’t just a direct sales source. Email promotions and newsletters sent to prospects are also enablers of delayed purchases and sales generated through other channels.
Read how one marketer expanded the list of email metrics his team follows to assess their campaigns’ impact on delayed or indirect sales. That data helps them plan campaigns, design subject-line tests, and segment lists to maximize campaign ROI.
Email is such a strong direct marketing channel that most marketers are focused on measuring their campaigns’ impact on direct sales. “There’s nothing really wrong with that, but if you are looking at email just through a direct-sales point of view, you’re missing out on all the other indirect sales email is generating in other channels”, says Rok Hrastnik, International Internet Director, Studio Moderna.
Hrastnik will be sharing a Case Study at MarketingSherpa’s 2009 Email Marketing Summit titled, “Targeting and Messaging Strategies that Affect Behavior: Making Email a Branding Powerhouse to Sell More.” His presentation outlines a strategy to maximize email’s impact on sales and lead generation, including tips on:o Content developmento Subject-line testingo List buildingo Message segmentation
Making that strategic shift requires marketers to broaden their approach to one of the fundamental building blocks of email marketing -- monitoring campaign metrics.
We spoke with Hrastnik to get his take on why the basic email metrics, such as open rate, clickthrough rate and conversions, don’t capture enough data to measure the indirect impact of your campaigns.
Five additional metrics to monitor to adapt campaign tactics for cross-channel and indirect sales:
Metric #1. Readership and engagement
Measuring clickthroughs is not enough. Hrastnik recommends digging deeper to understand how your subscribers are interacting with your email messages and Web pages, and what that interaction reveals about their propensity to buy.
- Measure how much time each respondent spends on newsletter articles or website pages featured in email links. A subscriber who spends only a few seconds on a page is less engaged than one who spends several minutes on that page.
- Rank the links in your emails according to the value of the click. For example, a reader who spends several minutes on a product information page may have a higher propensity to buy than a reader who spends several minutes reading a newsletter article not related to the brand.
- Also, measure actions visitors take on your website after receiving an email, such as:o Adding a product to a wish listo Using a product configuratoro Recommending a product to a friendo Saving a product for latero Adding a product to the shopping cart (without completing the purchase)
As with articles and Web pages, rank those actions according to their potential long-term impact on sales. You can do that by analyzing your historical campaign and sales data to determine which actions a customer took before a purchase.
For example, you can determine what percentage of customers added a product to a wish list and then completed an order within 30 or 60 days. By comparing the result for each action, you can see which ones made the most significant contribution to long-term sales.
Metric #2. Churn rates by source of email address
Measuring the churn rate of your email lists helps you determine whether your subscribers are happy with the messages they’re receiving. But you should always look at churn in relation to original source of the addresses that are unsubscribing from your list.
The expected and acceptable churn rate will depend on the technique you used to acquire those addresses:
- A higher churn rate is expected for lists that were generated through viral campaigns or sweepstakes offers that may have attracted subscribers who aren’t likely buyers.
- However, a higher churn rate for a seemingly well-qualified list, such as catalog requesters, is more problematic. It indicates that your email messages aren’t delivering relevant content.
Metric #3. Delayed conversions generated or supported by email
Calculating indirect email sales requires marketers to collect email addresses for all online sales, and then map those addresses back the specific email campaigns to which a subscriber responded. But Hrastnik cautions marketers to set up their analytics systems to capture the complete scope of indirect sales.
Here are two tactics for using your analytics system to highlight indirect sales:
- Set a longer expiration time for conversions related to email campaigns. Don’t simply measure email conversions for a few weeks or months after a campaign. Create rules that continue logging conversions for up to a year after a campaign.
- Don’t allow your analytics system to overwrite email conversions when a prospect re-engages through another channel, such as paid search. Set up your system to continue associating that lead with an initial email campaign or ongoing nurturing.
“We live in multichannel world, and there is no single channel that does it all,” says Hrastnik.
Metric #4. Short-term cross-channel measurements
Email marketers performing cross-channel analysis often rely on other departments for data, such as the database analytics team. If you’re getting those reports only on a weekly or monthly basis, you could be missing important information.
Instead, work with data providers to have them supply daily reports, so you can see the immediate impact of an email campaign on other channels.
Metric #5. Users’ behavioral changes
Email marketers typically see the strongest response rates from new opt-ins within the first few months of acquiring that address. But, in addition to general response rates, you also should monitor what kinds of content they access, and how those patterns change over time.
For example, a newly acquired subscriber may begin by clicking on general interest content in email newsletters. Then, over time, they may click through to more brand-specific content, such as product details and shopping guides.
Those behavioral changes can be used as triggers to move subscribers into new phases of email marketing, such as identifying a newsletter recipient as a qualified prospect for a specific sales promotion.