ExactTarget recently polled its customers, asking what metric their bosses used to judge the success of their company's email marketing program. Though clicks, conversions, and revenues were at the top of the list for most (thankfully), many said they were also judged by the size of their list.
Research and testing have shown that focusing on list size as a success metric can be damaging to the success of your email program. Optimizing around list size is grounded in an old-media advertising model, not one-to-one, direct email marketing. This misplaced energy can drive marketers to draw the wrong conclusions, take the wrong actions, and, in the end, it will lead to a less successful program.
Direct mail drove marketers to be more efficient and cost-conscious, but those same marketers often approach email marketing like drunken sailors -- sending every mailing to every subscriber on their list. Most cite the low cost as the reason, since an additional email is a fraction of a penny. At the lowest end -- say 50 cents -- an incremental catalog is going to cost 100 times as much.
The truth of the matter is the same caution and targeting necessary for catalog marketing also needs to be used in email marketing. The costs are still there, they just aren't as obvious. Hard costs associated with direct mail are easy to see compared to the opportunity cost of poor email practices caused by blocked or undelivered messages.
Two key metrics have emerged as king in determining the ultimate success of an email program: complaint rates and engagement.
First, complaint rates are measured directly by major ISPs, or accessed from third-party monitoring technology powered by Cloudmark, Brightmail, and others. Essentially, ISPs have allowed users to be the ultimate judges of what they consider to be spam and what they consider acceptable email by giving them the power to report any piece of email as "spam" or "junk" simply by clicking a button. As Michelle Eichner, VP of client services at deliverability monitoring firm Pivotal Veracity, put it in a recent article, "Even tiny spam complaint rates can have a deadly impact on your deliverability. AOL's complaint threshold is 0.1 percent, or 1,000 complaints per million messages, meaning if you send 100,000 emails to AOL subscribers and as little as 100 click the 'Report Spam' button, AOL may block the remaining 99,900 emails."
How's that for sobering? AOL is just one of more than 10 ISPs that publish a complaint "feedback loop" -- often called an FBL. Any marketer sending high-volumes of email should set up to receive these complaints back from the ISPs and monitor them continually to ensure their messages are below thresholds.
Second, email "engagement" is becoming another way you are judged by ISPs, and something you should be monitoring anyway to fine-tune your email program. Engagement is any action a subscriber takes to show they are interested in your email program, such as opening or clicking on an email, but also includes purchasing or visiting a store as a result (if you can measure it). Heck, I even consider an unsubscribe somewhat of a positive measure of engagement. I'd rather have someone tell me they no longer want my email than complain and drive up my complaint ratio, or ignore my email and raise my costs.
Guess what, ISP's are watching engagement too. Yahoo and Gmail, for example, may send a portion of a mailer's email to the junk folder and then watch what percentage of recipients pull it out of that folder by clicking "not spam." If too few subscribers open your email, you'll have problems.
Similarly, if no subscriber pulls your email out of the spam folder, but lots of subscribers complain about your email, then you're going to stay in the junk folder for a while, or at least until you fix your complaint and engagement problems. To fix these issues, you must first monitor these metrics, and then be willing to take action when thinks go awry.
One of our customers, an on- and offline retailer, was encountering some intermittent deliverability challenges, driven by ISP blocking and spam folder placement. Upon analyzing their list, it was determined less than 10 percent of their subscriber list was engaged in the email program (meaning the consumers opened more than one in five emails sent in the past 12 months).
There are three options for solving this problem. Option A was to just stop mailing the unengaged names altogether. Though this would likely fix the delivery issues, it could also affect sales.
Option B was to conduct a re-opt-in campaign and ask each subscriber to click the "yes" button to continue to receive emails. This would also likely fix the delivery issues, and it is a tactic we use often for older lists, or when the initial list source or permission level is suspect. However, in this case, permission was good, so the client wanted to test another option.
Option C was to reduce the contact frequency for the unengaged subscribers to see if subscribers were fatigued by the email frequency, rather than terminally unengaged in the program.
We decided to test both options B and C. Two equal and random groups of subscribers were pulled for the test. One segment was sent an email asking to confirm their subscription and desire to continue receiving emails. This was terminal, since names that did not opt-in to the mailing would be set aside and no longer mailed. The opt-in mailing yielded a 4.2 percent re-opt-in rate for that test segment.
A second segment was pulled, and mailing to this segment was reduced from weekly to monthly. Engagement was monitored after three months, and a full 16.5 percent had re-engaged in the program, a 397-percent lift over the re-opt-in campaign.
Depending on your situation, it's generally a good idea to try some combination of a re-opt-in campaign and reduced frequency to solve deliverability or engagement issues. However, we have seen cases where 80 percent of the list was cut after a re-opt-in campaign without any negative impact on site traffic or direct sales. In addition, the money saved from not sending to unengaged subscribers could then be directed toward making additional improvements to the program that could additionally increase ROI.
When it comes to email marketing, less is definitely more.
Chip House is vice president, industry & relationship marketing, ExactTarget.
