Prove Your ROI: Measuring Performance to Maximize Email Investment
Guy Hanson [email protected]
www.returnpath.com
uk.linkedin.com/in/guyhanson
@GuyHanson, @ReturnPath
Current Email Benchmarks
Source: DMA National Client Email Report 2015
90% of program owners said email marketing performs a very important / important strategic role for their businesses
Source: DMA Response Rate Report 2015
82% of marketing programs employ email for promotional campaigns
Source: DMA Response Rate Report 2015
Almost 2/3 of marketing budget holders will be increasing their email spend in 2015
Why is email core to your business?
• Our business’ primary revenue source is directly linked to email operations (20%)
• Email is a critical enabler of our products and services (60%)
• Email indirectly impacts our business performance (20%)
Source: SFMC State of Marketing Report 2015
Source: Econsultancy Email Marketing Industry Census 2014
3 out of every 5 respondents
attribute at least 10% of total sales
to their email programs
Source: DMA Response Rate Report 2015
When house lists are used, email has the lowest Cost per Acquisition (CPA) of the media types in
this study
Source: DMA Response Rate Report 2015
Part of the reason behind the
continuing popularity of email must be its ROI, which is the
highest of the media investigated
in this study
Source: Econsultancy Email Marketing Industry Census 2014
66% of email program
owners rank email as
Excellent or Good for ROI effectiveness
Measuring Email Performance Metrics
“If you can’t measure it, you can’t
manage it”Peter Drucker
Source: Econsultancy Marketing Budgets Report 2015
2 out of every 5 email program owners rate their ability to measure ROI from email as Good . . .
Source: DMA National Client Email Report 2015
. . . but almost 50% aren’t confident they can calculate revenue from their email marketing activities . . .
Source: Econsultancy Marketing Budgets Report 2015
. . . and the inability to measure ROI is the third largest barrier to securing
digital investment
What are the key metrics you use to evaluate effectiveness of your email programs?
DMA National Client Email Report 2015
Source: SFMC State of Marketing Report 2015
Average Order Value
$182
Revenue per Email
$0.08
Source: DMA National Client Email Report 2015
Over 50% of email revenue is generated by
segmentation
Another 30% is being produced by triggered
emails – almost doubling in just 12 months!
“Does the majority of your email marketing
revenue and engagement come from
triggered emails? Anecdotally, marketers
tend to hit this mile-marker when more than 5% of their email volume
is triggered emails”Source: Mediapost,
Source: DMA National Client Email Report 2015
Driving sales, acquisition, and lead
generation is the primary objective for
54% of email programs
Engagement, retention, and brand awareness accounts of a further 40%
Source: DMA Email Tracking Report 2014
Just under half of consumers (48%) now say they will
click-through from an interesting email,
compared to 64% 3years ago
Source: DMA Email Tracking Report 2014
3 out of every 4 mobile email subscribers will either occasionally/regularly read the subject
line and then delete
Source: DMA Email Tracking Report 2014
Almost 20% of email subscribers will register a
spam complaint as a result of a bad customer
experience, or loss of trust in the brand
Calculating Email Effectiveness & ROI
Source: DMA Response Rate Report 2015
Metric Baseline UpliftHard Bounces 0.3% 0.27%
Unsubscribes 0.125% 0.113%
Complaints 0.075% 0.068%
Disaffection Index 0.50% 0.45%
Metric Baseline UpliftList Size 1,000,000 1,000,000
Sends Per Annum 104 104
Total Emails Sent 104,000,000 104,000,000
List Churn 520,000 468,000
CLV of Address $8 $8
Depreciation $4.16M $3.74M
Effectiveness & ROI The Disaffection Index
Effectiveness & ROI Brand Value
• Companies are spending . . . 38% of their total marketing budgets on digital
• On average, 12% of digital marketing budgets are allocated to email
• Almost $4 in every $10 spent on digital . . . has a brand-focused objective
• An email program that supports a $10M brand is likely contributing ± $200K
Sources: Marketing Charts /eMarketerSource: Econsultancy Marketing Budgets Report 2015
Effectiveness & ROI External Measurements
Strategies to GrowEmail ROI
Source: DMA National Client Email Report 2015
Discounts are the single biggest
reason subscribers sign up to receive
emails (38%)
Strategies to Grow Email ROI List Growth
Source: DMA Response Rate Report 2015
Strategies to Grow Email ROI List Growth
Source: Fastmap Consumer Attitudes to Data
Strategies to Grow Email ROI List Growth
Source: DMA National Client Email Report 2015
Strategies to Grow Email ROI List Growth
Source: RP Labs Frequency Finder
Strategies to Grow Email ROI List Growth
Source: Experian Marketing Services - 4 Tips to Smarter Email Marketing
Source % Primary % Secondary Dead
A 17% 60% 23%
B 18% 59% 23%
C 8% 30% 62%
D 11% 44% 45%
E 39% 43% 18%
F 19% 64% 17%
Revenue
$7,520
$7,600
$3,680
$5,280
$9,680
$8,160
Strategies to Grow Email ROI Get Delivered
IP Address Permanence
Spam Complaints
Unknown Users
Infrastructure
Spam Traps
Subscriber Engagement
Strategies to Grow Email ROI Get Delivered
Source: Return Path Case Study Red Letter Days
Strategies to Grow Email ROI Frequency Optimization
Strategies to Grow Email ROI Frequency Optimization
Source: E-Mail Tipps - What’s your best email frequency? Here’s the math : Mailchimp - Sending Frequency: More Is Not Always Better!
Strategies to Grow Email ROI Triggered Emails
Strategies to Grow Email ROI Triggered Emails
Source: Epsilon Q3 2014 Email Trends & Benchmarks
“Triggered open rates were 76.7% higher than BAU
emails, with triggered click rates reporting 151.9%
higher”
Strategies to Grow Email ROI Triggered Emails
Source: RP Labs Strategy Mapper
Source: SFMC State of Marketing Report 2015
Strategies to Grow Email ROI
Win-Back
Strategies to Grow ROI Email Win-Back
Source: Econsultancy Cross-Channel Marketing Report 2014
70% of companies say it’s cheaper to retain a customer than acquire one and 49% say that, pound for pound, they achieve better ROI by investing in relationship marketing over acquisition marketing.
Source: Experian Marketing Services – 4 Tips to Smarter Email Marketing
Metric Actives Inactives
Subscribers 100,000 100,000
Revenue per Email
$0.08 $0.00
Email Frequency 2 x per week 0 x per week
Revenue per Year $832,000 $0
Revenue Opportunity $116,480
“The overall Read rate for win-back emails was 14%”
Strategies to Grow Email ROI Win-Back
Strategies to Grow Email ROI
Think Mobile
Strategies to Grow Email ROI Think Mobile
Source: Yesmail
Emails that make use of responsive design techniques
see an average uplift in click-to-
open rates of 21% for mobile
subscribers
Strategies to Grow Email ROI Think Mobile
Source: Knotice
Strategies to Grow Email ROI
Eliminate Fraud
Strategies to Grow Email ROI Eliminate Fraud
Source: Return Path EFP Security Report
Strategies to Grow Email ROI Eliminate Fraud
Source: Marketing Charts - Low Click-Through Rates A Top Challenge For Email Marketers
A meaningful call-to-action offer is rated by 65% of program owners as the most effective driver of
email click-throughs
Resources
• Return Path Placement Benchmarks
• Return Path Email Win-Back Programs
• Return Path EFP Security Report
• DMA (UK) Email Tracking Report 2014
• DMA (UK) National Client Email Report 2015
• DMA (US) Response Rate Report 2015
• Econsultancy Email Marketing Industry Census 2014
• Econsultancy Marketing Budgets Report 2015
• Econsultancy Cross-Channel Marketing Report 2014
• Experian Marketing Services Quarterly Email Benchmark Report Q1 2015
• Experian Marketing Services 4 Tips to Smarter Email Marketing
• Salesforce Marketing Cloud State of Marketing Report 2015
• Epsilon Q3 2014 Email Trends & Benchmarks
• Fastmap Consumer Attitudes to Data
Prove Your ROI: Measuring Performance to Maximize Email Investment
Guy Hanson [email protected]
www.returnpath.com
uk.linkedin.com/in/guyhanson
@GuyHanson, @ReturnPath
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