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E-mail metrics

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Accrue Software, a provider of Web site measurement software, needed a way to sign up attendees for its promotional Web seminars, and direct mail wasn’t cutting it anymore.

Postage and printing costs were high, and there was that big jump that customers had to take from the mailbox to their computers. Figuring the shortest path for customers might be a direct one, Accrue, in conjunction with e-mail software and services provider BoldFish, moved its marketing campaign online and began sending e-mail invitations.

The results were immediate, said Barbara Tallent, BoldFish’s president-CEO. "They were able to get people to their seminar series for a very low cost as opposed to [using] other advertising or direct mail. The company had an instant return on their investment," she said.

Accrue’s experience mimics what’s happening in marketing departments all over the country. As companies scale back budgets, the mantra of smaller investment, thus better ROI, is taking hold. Unfortunately, in their rush to the e-mail marketing world, some companies are losing focus and money on ineffective campaigns. In some cases, such companies—even those that work with professional e-mail marketing providers—are also losing customers.

"Anyone who is savvy can get you great click-throughs and opens for about six months; but, at the end of the day, if you haven’t thought about what you want to do, you could be in trouble," said John Funk, CEO of Quris, an e-mail outsourcing agency. "E-mail relationships are incredibly fragile. It takes a long time to build credibility, and once you’ve turned someone off, it’s really hard to re-engage them."

There are, of course, ways to track an e-mail marketing campaign’s success: metrics including click-throughs, the number of e-mails opened in a mailing, viral pass-alongs and conversion—the holy grail of any marketing campaign. But before companies send out a campaign and start slicing and dicing results, they should set goals so they have something to compare metrics to, experts say.

Unfortunately, setting goals isn’t as easy as it sounds. Conversion will vary, depending on the type of company and the services and products it sells. It will also depend on the quality of the e-mail database the company is using. From the beginning, companies should decide on the desired result of their e-mail contact and tailor their messages accordingly, something analysts say is falling to the wayside in the e-mail realm. Without planning, companies can’t tweak programs appropriately.

For example, some marketers argue, if the goal is selling products or services, companies should limit the number of messages sent each month. Conversely, if brand recognition is the goal, more frequent
messages that mesh a company’s name with positive, useful information might be what the marketer needs. Unless you know what outcome you want, the action you take could be the wrong one.

Planning should also include several e-mail tests so that companies have some idea of how well a particular program might do. Analysts say marketers should aim for response rates of between 3% and 15%. Using those numbers as a guide, they can tell if their program is worth rolling out on a full scale.

"The key to testing is do it carefully and never change more than one value at a time," said John Rizzi, CEO of e-mail marketing provider e-Dialog. "You might want to send e-mails to 500 or so addresses in groups of 100 and see which one has the best response. Without testing, you’re sort of throwing your money away."

It’s during this testing phase that metrics take a more prominent role in an e-mail marketing campaign.

Marketers usually look first at how many e-mails were opened. Many erroneously think that if potential clients open a message, they’re interested in what the marketer has to say. However, this is a risky leap to take. Most tracking programs receive information about whether and when a message is opened, but they don’t take into account e-mail clients that automatically open all incoming e-mail.

In addition, some returns are omitted when e-mail programs don’t have return receipt capabilities or results are lost at the server level, where corporate IT departments often block such responses.

Reliable metrics

A more reliable metric, said Gaurav Verma, an analyst with research firm Doculabs, is click-through, which can help companies find live bodies. "Click-through is definitely No. 1 to see what hard dollars you did get. You’re obviously going to send your next campaign to anyone who opened the last one," he said.

Paul Soltoff, president-COO of DirectNet Advertising.net, agreed, but offered one caveat: "A click-through means someone was interested enough to take an additional step. But impressions and clicks don’t translate into completed actions."

Soltoff said he analyzes the mail delivered for how many "unique" opens there were, thereby not counting someone who opened the message more than once.

And, he said, click-through doesn’t mean anything if the pages that people are clicking to don’t result in a sale or other action. "We look at click-throughs on the page that the offer is actually located on."

That fact brings most marketers to the final metric—conversion—although even conversion metrics can be deceiving. How can this be? A sale is a sale, right? Not exactly.

There are some deals, said Quris’ Funk, that customers simply can’t pass up. That doesn’t mean, however, that you’ve seen a return on your investment. "It’s a slippery slope if you start bribing customers. If I can get a 10% better click-through rate and a higher conversion rate but that coupon cost you 20%, that’s a bad thing," he said.

In addition, Funk said, so-called bargain shoppers are just as likely to take the next great offer, which might come from a competitor. "Bargain shoppers aren’t your best customers," he said.

Because so many e-mail marketing metrics are ambiguous at best, industry experts agree that ROI isn’t easy to calculate.

"We haven’t found a thing that gets down to the nitty-gritty of ROI," said David Hallerman, senior analyst with research firm eMarketer Inc. "This is one instance that CRM [customer relationship management] is really useful. E-mail marketing is just another channel for contacting customers and prospects. Companies need to remember that, because divorcing the technology from the process could cause problems," he said.

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