By Karen J. Bannan
ROI is the acronym marketers live by, and yet few are actually aware of whether or not their newsletter or e-mail marketing message measures up.
This week Andrea Fitting, CEO of Pittsburgh-based marketing and communications firm Fitting Group, and Steve Latham, CEO of Houston-based Spur Digital, an online marketing strategy and consulting firm, explain how marketers can best assess if their e-mail efforts are on the mark.
E-mail secret: Establishing a baseline response rate is crucial, but few companies actually do it.
If you don’t have a starting point, you’ll never know if your ROI is good or if results are improving or lagging, Fitting said.
"Do you just go by every dime you spend designing and distributing your message and try to get some multiple of your expenditure?" Fitting asked. Testing would be a smarter option, she said.
Fitting recently used this strategy for one of her clients, a career site. She sent out four different offers, each targeting HR managers with a different twist. One offered a white paper. A second gave responders a movie DVD, and the third entered responders into a DVD player giveaway. The fourth ad went out without the promise of a gift. By looking at initial responses, Fitting was able to tweak future e-mails so everyone got the message that received the most responses, which was, interestingly enough, the DVD offer.
E-mail lie: All metrics are the same.
Southwest Bank of Texas launched an e-mail campaign targeting its corporate customers; the company was advertising its treasury management services. The campaign, which Spur Digital oversaw, had a 70% open rate and a 10% click-through rate. Its net response rate was 4% or 15%, depending on how you manipulate the numbers, Latham said.
"You can have a range of response rates based on which numbers you’re including," he said. "If you look at Southwest’s numbers, of those who clicked through—the 10%—30% of them filled out the form. That sounds more impressive than saying you have a 4% response rate based on the original number of people it went out to."
The numbers get even more tricky when you’re dealing with very small or very large lists. The lesson? Don’t take someone’s word on your ROI or response rate at face value. Get all the facts.
In Southwest’s case a 4% response was still extremely valuable, Latham said.
"If you compare this campaign to a direct mail campaign, we got 10 times the response rate for one-fifth the cost," he said. "That’s a 50 times improvement in ROI."