Email marketing glossary

EMAIL METRICS

Open (view) rate: The number of people who opened the message. Seen as a less reliable figure, as an opened email doesn’t necessarily mean it has been read.

Click-through rate (CTR): The number of people who clicked through to your site. An individual CTR tells you the number of people who clicked on an embedded URL in your email message and were sent through to your site. An overall CTR tells you the number of clicks in relation to the total messages sent.

Conversion rate: Measures the success of your call to action: a purchase or a requested action.

Acquisition rate: The number of recipients of your email who became new paying customers. Can be used to tell you the quality of your list, offer and testing methods.

Bounce rate: How many names on your list bounced back because they were undelivered (hard bounce) or the recipient’s server was too full or too busy (soft bounce). Needs to be monitored to ensure the quality of your list.

Unsubscribe rate: The number of people who received your email but clicked the Unsubscribe link. Tracking this can help you refine your message, frequency and offer.

EMAIL ANALYSIS

ROI: How much your campaign cost against how much you invested in it.

Cost per sale: How much it cost to secure a sale. Divide total cost of campaign by total number of sales.

Cost per response: How much each response cost. Divide total cost of campaign by number of responses.

Cost per message: How much each message cost to create and send. Divide total cost of campaign by number of messages sent.

Total revenue: How much revenue your campaign generated. Multiply the number of customers by the revenue generated per customer.

Recency, frequency and monetary value (RFM): Analysis technique that determines the customers most likely to purchase or frequent your site based on their past ordering history. Determined in part by how recently they ordered, how often they order and how much.

When marketing becomes spam

Marketing via email can often be a cheap and effective way of building brand awareness, driving traffic to a site and even selling online. Yes, that’s right, selling things.

The problem is, though, how do you make sure that your message stays on brand and isn’t lumped in with the various unenticing offers to ‘make your business explode’, or pornographic sites or services?

Elsa Weill asked the UK-Net Marketing list, “I’m currently looking into email marketers and am therefore wondering where ‘email marketing‘ ends and ‘email spamming‘ begins. What are your feelings about such email offerings – are they a good thing or a bad thing for the new media industry? All your thoughts are welcome.”

Andrew Petherick replied, “I can answer this one. Spain is effectively unsolicited mail where the recipient hasn’t requested the email the he or she is receiving; it’s even illegal in many places.

“Next up the ladder comes opt-out, where the recipient has decided to tick a box to say that they would like to be sent emails in the future about that company’s services and products. Giving permission here will sometimes allow that company to pass their email address on to other marketing companies.

“Finally comes permission based email, where a person will specifically ask to receive email on a certain subject until they no longer want it They then remove themselves from the list. With the opt-in method, the consumer is given 100% control of the mail received and the marketer will achieve extremely high response rates (up to 15%).”

Ashley Pomeroy shared his thoughts on the specific makeup of spam. “Although technically spam is any mail that’s repeated over and over again, I think that dullness is the crucial signifier of true spam.

“Dull stuff is marketing, semi-interesting stuff (porn, pyramid schemes, ‘Help Save the Brazilian Rainforests’ and ‘Beware of Good Times’) is spam. I think people assume that ‘multi-level marketing‘ schemes, anything which has ‘THIS IS PERFECTLY LEGAL!‘ in the second line, and adverts for Horny Belinda’s Web-Cam are spam, although amusing to read. I delete this and add the sender to my procmail filter. I don’t know why they bother — perhaps it’s satire.

“A standard dull ‘Hello and welcome to the N newsletter — with lots and lots of promotional guff, plus a competition ‘email would be marketing.

“Does anyone jump for glee when they receive a mail from a company with ‘Dear [client-name]’ at the top? Do they then feel a wave of good cheer as they read about their opportunity to source and buy professional services and register for FREE!’? I doubt it very much.”

The line between irritating time-wasting spam and effective promotional emails is always going to be a difficult one. And this problem will only be exacerbated as companies try new marketing techniques in order to make their email marketing more effective.

Introduction to email marketing

Using email to reach customers is a very targeted method, but make sure you have their consent and your message is relevant, says Greg Brooks.

Email marketing is one of the mainstays of any online marketer’s armoury. The cost-effectiveness of the medium and its ability to reach a wide audience are often promoted as two of its main benefits. But it’s also easy to run bad email campaigns that can damage your brand. So knowing how to run successful email marketing campaigns is vital to the success of your online marketing strategy.

How to get started

The best place to start your email marketing campaign is to determine what your objectives are. Are you trying to generate new business, inform existing customers, or move customers along the purchase cycle? Your answers will determine everything about your campaign.

When you know what your objective is, you must determine how to get the data that you need to contact your customers. If you’re targeting your existing customer base, it would be wise to start with your own customer data, which you should be building up anyway.

Mark Cripps, head of digital at agency Craik Jones Watson Mitchell Voelkel, has been telling his clients that 2006 is the year of the data farm and that they should be making the most of the contact they have with their existing customers.

Every time someone touches your brand, you must get their email addresses – with permission, of course,” he says. These will be the most valuable to you, he argues, as these customers have already given you permission to contact them.

It’s all about permission,” he adds. “Email is such an intrusive medium that if you don’t have permission, people won’t open messages and you’ll alienate them. You can use third-party lists to supplement your data and piggyback on trusted emails through sponsorship or advertising.

Buying lists

If you wish to launch a large-scale email campaign or tap into a new potential customer segment, then you can buy a third-party list of email addresses to send your campaign to.

Jim Downes, who works at BT Retail in the customer information management division, uses digital and direct media planning/buying agency Zed Media to source third-party lists to supplement the telco’s existing marketing programmes. He says that the best way to ensure your third-party data is from a trusted source is to make sure the supplier is endorsed by the Direct Marketing Association (DMA).

We endorse permission-based marketing,” he says. “You want to get the most consent you possibly can prior to launching your campaign. Stay away from anything that comes from a grey source and go for Direct Marketing Association-registered suppliers only.

Richard Gibson, chair of the email benchmarking hub at the DMA, says that using the Association’s trusted suppliers ensures you won’t risk damaging your brand when buying in a third-party list.

The damage to your brand by using a bad email list will be enormous,” he says. “If it sounds too good to be true, it probably is. Due diligence is key. List suppliers that aren’t registered with the DMA should be avoided.”

Creating your emails

When you’ve decided on your strategy and sourced your data, you need to concern yourself with the format of the emails themselves. This process can be handled in-house if you’re a smaller brand and are launching a small campaign, but more often you’ll need to use either a creative agency, an email service provider (to send the emails), a planning agency, or a mix of all three of these.

Stefanie Schmidt, group account director at DNA, which works with large organisations such as the British Heart Foundation, says that it’s important to give the recipient of the email as much control over it as possible, in order to make the communication more effective.

You can put recipients in control by allowing them to pick the topics and frequency of communication,” she says. “People who more consciously opt in will give you a better database of prospects or existing customers.

She says that email is a medium that allows for quick testing and tweaking, so you can get your messages right. Even if you have relatively little experience in this area, you shouldn’t be afraid of trying things out.

It’s about testing and learning and getting results that inform further strategy,” says Schmidt. “It’s not that scary. There are lots of similarities to direct marketing, which is a good starting point. Consider it as a ‘drive to’ medium that also has other elements.”

Rupert Harrison, list broker at Zed Media, agrees that you have to test as you go along, because you won’t know what works until you try it. He says it can be handled in-house as long as you can match the branding of your other channels to your email communications. But there are also plenty of agencies on hand to help. He also points to free online tools like spamassassin.apache.org, where you can test out the ‘spaminess‘ of your email to ensure it’s not blocked by junk-mail filters.

The benefits of bringing in an agency include the ability to make your email marketing work together with your other marketing channels, using emails to uplift other marketing messages and to create spikes of interest around certain products or at particular times during the year. If you do decide to use an agency, or even a range of agencies, it’s important to include them at the earliest planning stages and to ensure they meet your existing agencies so that you get maximum benefit from your email marketing.

However you decide to proceed, there’s still a lot of work that you can do in-house upfront. Everyone uses email these days, but marketers are often wary about paying for campaigns and trying new things. Try putting yourself in the consumer’s shoes and think about how you interact with emails you get from companies.

Measuring your success

The final component of your email campaign, but one that you should have in place before you start, is the ability to measure its success against whatever objectives you’ve set. BT’s Downes says it’s critical to have a reporting mechanism set up before you launch your campaign.

You want your email channel to show more return on investment than direct marketing channels,” he says. “But it’s valueless unless you can prove that ROI, and that proof can get lost in the ether sometimes.”

Harrison says that by correctly monitoring your email campaign you can tweak it to increase its effectiveness and so ensure you’re getting a good return on investment. “Lots of clients track only click-through rates and not who converts to a sale,” he says. “Have a look at the customer journey to see where the drop-off is. Then you can address the problem.”

However, the DMA’s Gibson says you can get too bogged down in metrics and lose sight of your core aims. “Measure your success against the objectives that you set out,” he says.

Conclusion

The efficiency and effectiveness of your email marketing campaign will be based on solid planning and knowing before you begin what objectives you want to achieve.

Gibson calls it ‘direct marketing 101’ but says that, although email is often considered a more cost-effective and cheaper form of direct marketing, it’s still very difficult to get your message read. “Your customer has an inbox that they guard very carefully and you have to be very clever to stand out,” he says.

Downes agrees that there’s more scope with email marketing to do bigger volumes, but says you still have to contact people who are receptive in the first place. “Keep your communication clear and simple. Email sits in front of people for a shorter time than other ads, so it has to be as brief and punchy as possible.”

If you approach your email marketing with a clear objective and target the right people with the right message at the right time, then it will undoubtedly be a success. But avoid thinking that it’s a simple form of direct marketing just because it’s cost-effective. It’s only as cost- effective as you make it.

Email marketing proves solid in uncertain times

While many businesses lock horns with economic uncertainty, we’re seeing email marketing offer a practical and stable means of beating the odds. According to a recent Forrester Research report, ‘State of Retailing Online 2009‘, 89% of marketers say email marketing is a reliable staple for generating leads. It’s maturing as a sustainable revenue contributor and its place in overall strategy has become crucial to meeting business goals. During a recession, email’s proven performance can be a lifesaver to many businesses forced to scale back in other ways.

Email marketing is durable for many reasons: it’s a proven, established online channel; it enables quick speed to market; it’s easy to test and measure; it involves lower overhead than traditional media; and it produces quantifiable results. It therefore continues to hold a top spot in marketer’s purview. While some grapple with cutting spend during tougher economic downturns, savvy marketers will keep their higher-performing, lower-cost programmes running at a steady clip to generate leads and revenue and shift traditional, more expensive brand marketing into a lower gear to maximise return on investment.

Struggling to stay vital in a tough market raises the stakes of any investment. While budgets may be tightened, it’s still critical for email marketers to maintain their long-term programme vision and continue to invest in growth. To help clients avoid pitfalls, we carefully strategise with each to formulate a plan that not only focuses on the basic foundational elements of email programmes, like welcome campaigns and thank you messages, but doesn’t overlook the importance of revenue generation and growth using organic, cost- effective strategies. With consistent revenue generation in mind, it’s important to engage customers early with activation campaigns and incentives embedded in triggered messages. Focusing on simple, scalable tactics like these while conserving in other areas enables long-term viability.

We’re also helping our clients adapt to consumers’ changing communication needs by developing and testing integrated social media and mobile strategies. Email is incredibly complementary to the Web 2.0 world as a driver of traffic to multiple destinations, such as web- based widgets on commerce sites, location-based offers delivered to mobile enthusiasts, and a smartly planned deal-of-the-day message shared on Facebook. To take advantage of the social media trend, marketers should monitor customer’s social media behaviour and dedicate time to learning about technology trends still on the rise. The future is never certain but strategic and innovative email marketing today is what will pay off later. Simple numbers reinforce this advice: Forrester finds email marketing listed as a high priority by 88% of retailers who are using it largely to retain customers, by 71% who plan to send segmented emails to customers based on purchase data and preferences, and by 55% who plan to gather customer feedback.

As we head into 2015, budgets may still be tight but we expect investment in email and multi-channel marketing to grow as marketers continue to focus on top revenue-generating tactics to keep business on course. The high ROI promise of email marketing affords ample opportunity to seize this moment and, when tides shift, marketers will be ready to invest in the next generation of email and interactive channels just around the corner.

Email makes its mark

It’s often the new kids on the block who get the most attention. In digital marketing, that has meant IPTV, podcasting, blogging and community networks. Email has a far more substantial heritage than other forms of digital marketing, though, and is an object lesson in how persistence and innovation can overcome challenges these others have yet to face.

The first email was sent in 1971. Its potential for marketing was recognised early on: in 1978 a company later bought by Hewlett-Packard was attributed with sending the first marketing message by email. It really took off as a means for interpersonal communication around the time of Hotmail‘s arrival, but until now has failed to meet its potential for legitimate marketing.

So why the sudden upsurge in interest? After all, email has been dogged by problems that have impeded its growth. Consumer and therefore client confidence was severely dented by the issue of spam. The first case was allegedly an anti-Vietnam protest distributed to a community of connected researchers in the US.

The content of unwanted email became distinctly more lowbrow and originated from dubious practitioners. Correspondingly, filters became tougher to bypass and click-throughs declined, suggesting responses were in terminal decline. Further, direct marketing budget holders proved slower than their colleagues with an online advertising remit to grasp the potential of the Internet, meaning email lagged its siblings.

Now, however, the tables have turned. In a climate where clients are switching spend to advertising that allows them to target individuals, encourages them to perform an action and measures the response, digital channels are seen to accomplish these tasks more effectively. Opt-in email is transparent, allows geodemographic targeting, can be personalised and can communicate far more than some rival ad formats.

Deliverability issues are being addressed by list owners working more closely with ISPs. Creatives drawn from traditional direct marketing are honing messages and calls to action. Most importantly, perhaps, dedicated agencies are emerging with the requisite DM planning skills, understanding of technology, buying power and knowledge of list performance to build effective campaigns that hit client CPA targets. That’s why email ad spend is surging – I’m working with the IAB’s new Email Marketing Council to calculate by how much.

In adversity, email has grown stronger to the point where both consumers and brands are more prepared than ever to include it as part of the way in which they communicate with each other.

The industry should be doing its best to capitalise on the fact that email is still one of the most popular reasons for people to go online, without alienating them. Marketing communications have to be relevant and timely in order not to be blocked by ever-more sophisticated filters or, if successful in being delivered, not discarded. However, the industry should raise its game still further and indulge in more responsible practices, or risk ISPs taking the initiative with guaranteed delivery schemes like Goodmail that will force more careful targeting and raise costs.

Email has proven staying power and its evolution is promising for consumers and marketers alike. Digital marketing upstarts look out: it’s the tortoise to your hare.