“Show me the money”, is what we hear these days. Marketers walk around using reporting tools and spreadsheets to measure what works best.
Email marketing ROI is a metric that shows how much the Return On your email marketing Investments are. How much money is earned in relation to the money spent.But knowing your ROI isn’t enough. 3 experts give tips for measuring and increasing your email marketing ROI.
Email marketing has a good ROI
First the good news: Email is a channel that generally offers a good return on investment, with 70% of companies rating email marketing ROI excellent or good in 2012. No other channel, except SEO, is rated that high.
I had the good fortune to speak to some ROI and email marketing experts just recently. Here is what they had to say about measuring and increasing Email marketing ROI.
Jim Lenskold: Clicks are not enough, you need incremental sales
Key point in ROI thinking is to measure your outcomes and connect it to your incremental sales. The main metrics are Incremental sales, Customer Value and Cost per Purchase. In some businesses it is easy to measure for example with a click and buy e-commerce. Some other businesses it is not that easy. It might take more modeling and analytics.
Measure using groups One way to measure is to look at the difference between marketed and not-marketed groups. This big picture ROI measurement is something that you can only look at periodically.
On a daily basis you can look at the Patch to Purchase and how clicks and engagement flows through to incremental sales. You can do email marketing testing with frequency, content and designs to increase that. But please avoid to let those e-mail statistics become goals on their own.
Just clickthroughs is not enough, you want to focus on high impact measurements. You can be very effective in the middle of the sales funnel, which might not translate into sales or revenue. Ultimately everything is in service of your ROI and how your work in different channels will add to that.
Jim Lenskold is writer of the book Marketing ROI: The Path to Campaign, Customer, and Corporate Profitability and president of the Lenskold Group
Oliver Blanchard: A simple way to measure email marketing ROI
Basically the top e-mail marketing tips are also pretty broad: don’t spam, make your e-mails more interesting and make them stick. But a how does social media and e-mail relate to each other when it comes to ROI?
If you are running a cross-channel marketing campaign and using media like e-mail, print, Facebook and your own website in the e-mail marketing campaign. To know what channels adds to the revenue there are different ways, but one of the simplest is my also favorite.
Using discount codes
So distribute a different discount code to each channel, that can be a real code, but online it can also be included in a link. You should capture those codes on the point of sale, or registration in case of an event. So now you seeded each channel and can see which contributed. Now this is something that you could do each day, but you don’t want to give a discount each day. One of the ways is to do a burst of 24 hours and do a sale each month. Alternative to giving discounts is doing a sweepstake. These discount code gives hard data. Another way is to ask. Everybody can do it.
Oliver Blanchard is writer of the book Social Media ROI: Managing and Measuring Social Media Efforts in Your Organization and also goes by the name The Brand Builder.
Kath Pay: If it’s worth marketing, it’s worth testing
With regards to E-mail marketing ROI, one of the most important factors is to test. There are so many factors to test within your email programme – and that includes the entire customer journey – from the PPC ad, to the email to the landing page to the buying process to the after purchase communications. All of these steps have an influence on ROI and all need to be tested and optimised. Email Marketing isn’t just about the email and it should be viewed holistically and all barriers to conversion need to be removed.
Be sure to measure the appropriate metric when testing as well – if it’s sales you require then be sure to use that as your metric when determining whether a subject line, a Call to Action or an image is the most successful one to use – don’t just assume that if an email gets the most opens that it will then convert into producing the highest conversions.
Kath Pay is an email industry expert. Currently Kath is Chair of the Events and Communications Hub of the UK DMA’s Email Marketing Council as well as being the Advanced Email Marketing Course Tutor at the IDM and busy at her company Plan2Engage.
Thanks Jim, Oliver and Kath! If you have any ROI advice or have questions be sure to share them in the comments.