Marketers talk a lot about return on investment, but when it comes to e-mail marketing, many don't fully understand the very thing that can help them determine it: metrics. Often, they either stick to simple metrics—such as opens and unique clicks— or they don't use them at all.
“E-mail marketers need to not only measure e-mail engagement via metrics such as click-through rate but also use that measure as a segmentation attribute to divide subscribers into two buckets: those that are engaged and those that are not,”said David Daniels, VP-principal analyst at Forrester Research. “This will allow marketers to drive more meaningful and relevant conversations with their subscribers.”
Basic e-mail metrics are important but don't measure the complete impact of e-mail on the business, said Loren McDonald, VP-industry relations at Silverpop, a provider of e-mail marketing services. “The fact is, if you make decisions based on e-mail metrics alone, they can be wrong. You could have a lower open rate but more conversions because you engaged with fewer people but those people who did click through were more engaged.”
But once marketers start understanding what e-mail metrics can do and how to couple them with other company or industry data, the results can help shape a company's direction. Everything from research and development to sales to customer service can change for the better, experts said.
One of the most powerful ways a company can use e-mail metrics is to identify its best customers; another is to uncover potential new-product needs.
“One of the key metrics that our client Sony [Corp. of America] uses e-mail metrics for is value per registrant,”said Nicholas Einstein, director of strategic and analytic services at Datran Media, a digital marketing technology company. “We see a lot of companies doing this—leveraging e-mail data to make informed business decisions because it's data that can be generated quickly and reacted to quickly.”
Companies can, based on click-throughs, see when interest in a particular product is fading and merge that information with sales data to provide a better picture of future development. If sales are down but people are still clicking through, they may be waiting for the next version or choosing a competitor's offering instead.
E-mail can also be a tool to mitigate supply chain risk, said Yun-Hui Chong, VP-strategic services for Experian CheetahMail, an e-mail service provider. “Companies can offer discounts via e-mail for early product reservations and then use those conversions to project out product sales,”she said. “The idea being that it can also show which products are going to be slow sellers.”
And then there's the art of the upsell, said Dan Forootan, CEO of e-mail marketing solutions provider StreamSend. Click stream data can reveal when salespeople should follow up with a particular customer, he said. “If a client is clicking on five articles about a product they don't own, the interest is definitely there for some reason,”he said.
Still, none of these decisions should be made on the face value of e-mail analytics, he said. “You have to be tracking analytics on the Web, too,” he said.
Marketers also should be careful about making sweeping generalizations, such as lumping all customers and prospects into the same category. You may have only a small cross section of your prospect list subscribed to your e-mail newsletter, and those who do subscribe may be more or less savvy than the average customer or prospect. This means that if you base decisions only on the metrics that you have in front of you, you may be missing broader trends.
Those executives who aren't comfortable letting e-mail metrics shape their R&D or sales efforts may be willing to use them in the customer service realm. Marketers can track what people are clicking on as well as what types of in-bound e-mails they are seeing to help shape online FAQs as well as help direct customer service scripts, said Ben Rothfeld, global director for marketing strategy at marketing services company Acxiom.
For example, if you combine e-mail metrics—such as which terms or subjects are most commonly clicked on in a newsletter—with Web analytics, you can create a flow chart of other issues or questions a customer may have.
Marketers can then use that information to help reduce the number of calls coming in, McDonald said.
“We have one client that found it was getting a significant number of calls into the call center about really basic stuff,” he said. “The marketing team used e-mail to educate those customers by creating an FAQ and using e-mail reminders. That marketing executive's CEO loves him because he is saving the company a lot of money. An e-mail is 1/65 of the cost of a telephone call.”
But none of this is possible, said Ivan Chalif, director of e-mail product marketing for Alterian, a provider of integrated marketing software, unless you've defined what you want to measure. E-mail metrics are the start, but there's much more out there, especially with platforms that let you bridge e-mail, Web and database data, he said.
“If the marketing team is keen on driving and measuring the most revenue from their e-mail campaigns, tracking opens and clicks is not going to mean much to them when they have to validate their efforts,” he said. “You have to have access to metrics that confirm or refute the effectiveness of your program. If it's revenue that's important, it's revenue you have to measure. Imagine going to your VP of marketing's office and she asks how much revenue a campaign generated and all you have are clicks and opens data. That's not going to be a fun conversation.”
Originally published July 20, 2009