Hillstrom - Hillstrom’s Email Marketing Excellence

Hillstroms Email Marketing Excellence

Using Email Forensics t o Prove Email Marketing Isn t Dead

Kevin Hillstrom

Acknowledgements

I would like to thank more than eighty clients who have hired me to analyze customer behavior during the past six years. Their projects greatly contribute to a broader understanding of the role of email marketing in the customer ecosystem.

Copyright 2012 by Kevin Hillstrom

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, email, Internet, or any information storage and retrieval system now known or to be invented, without permission in writing from the author.

3 Digit ISBN: 978-1480232433

Published in the United States of America by Kevin Hillstrom

Available from Amazon.com and other retailers.

Manufactured in the United States of America

First Edition

Cover Design: Kevin Hillstrom and Createspace.com

Cover Art: Kevin Hill strom

A Story from t he Trenches

I want to tell you a brief story about the difficulties email marketers face.

Earlier this year, I was invited to a meeting that, on the surface, should have been terribly boring. Ninety minutes. Half of the executive team was in attendance. The email marketing director arrived five minutes late, and had a look in his face suggesting that this meeting wa s the last place in the world he wanted to be.

Soon enough, this meeting would be the last place in the world that the email mark eting di rector wanted to be!

Folks were invited to the meeting to discuss information they wanted included in a new customer database. As you know, however, meetings seldom stay on topic. Meeting topics evolve and change, as questions are asked and answered.

The question that started the discussion was simple, easy to answer. The resulting discussion was painful. Lets call the email marketing director Mark. Lets call the executive Dale. The dialogue went something like this:

Dale: Mark, what do you want the new customer database to tell you about email marketing subscribers?

Mark: We already know everything we need to know about our email subscribers.

Dale: We do?

Mark: Absolutely.

Dale: How many email subscribers purchase in our retail stores?

Mark: Oh, we dont know that.

Dale: Wouldnt we want to know that?

Mark: I suppose. But thats not really important. Engagement is important.

Dale: Engagement?

Mark: Yes. We want our email subscribers to be engaged with our content. Ultimately, were content marketers, and if our content is engaging, the customer will continue to opt-in to our campaigns.

Dale: I thought we wanted to generate sales and profit from our email campaigns?

Mark: Sure. And we do just that. We do it via engagement and relevancy.

Dale: Relevancy?

Mark: Yes, relevancy. Relevancy is so important to email marketing. If our messages are relevant, then sales will increase.

Dale: How many versions of an email campaign do we send to customers?

Mark: J ust one.

Dale: Wouldnt it be more relevant to send multiple versions of email campaigns, based on what customers purchased in the past?

Mark: I supp ose. But we dont have the resources to do that.

Dale: If you could show me the return on investment of email marketing, maybe I could get you the resources to execute different versions of email marketing campaigns?

Mark: The Direct Marketing Association says that email marketing has the best return on investment of any marketing channel.

Dale: But what is the return on investment for our company?

Mark: Oh, its fantastic! On average, 0% of customers open our email campaigns.

Dale : Are you telling me that 8 0% of customers completely ignore our email marketing campaigns?

Mark: Well, I dont think

Dale: Y oure telling me that our email ca mpaigns are so irrelevant that 8 0% of customers completely ignore them. Doesnt that speak to the need to have multiple versions of email campaigns, so that each campaign is more relevant to the customer?

Mark: I dont think we should look at open rates in iso lation. You see, after opening an email message, customers click through the campaign to our website. In our case, on average, 10% of customers who open the email campaign click-through to our website.

Dale: Wait, what?

Mark: Yes, 10% of those who open our email marketing campaigns click-through to our website. Thats a lot of engagement.

Dale: Is 10% good?

Mark: I think so. It used to be 8%, so weve made a lot of progress.

Dale: So only 10% of those who open a campaign visit our website. And only 20% of those who receive an email campaign bother to open the message? That means only 2% of customers who receive a campaign actually visit our website.

Mark: Ok.

Dale: And you think thats a good metric?

Mark: Look, Ive poured over a lot of industry data. Were right where we need to be.

Dale: Two out of one hundred is right where we need to be?

Mark: Yes.

Dale: Once the customer gets to the website, what percentage purchase merchandise?

Mark: Ten percent. Thats double our normal conversion rate. Email marketing works. We deliver highly qualified traffic to the website.

Dale: Twenty percent of those who receive the message even bother to open it. Ten percent of those who bother to open the message choose to visit the website. And of those who visit the website, ten percent choose to purchase merchandise. Is that correct?

Mark: Yes.

Dale: According to my calculations, only one out of five hundred recipients b other to purchase merchandise.

Mark: Thats good, sir.

Dale: Thats a disaster!

Mark: Come on.

Dale: What about retail stores? Surely we drive traffic to retail stores, right?

Mark: Absolutely.

Dale: How much traffic?

Mark: I dont know.

Dale: How can you not know that?

Mark: We dont have the right tracking tools.

Dale: Why dont we just execute a mail and holdout test? Well take thirty-thousand customers, mail half, not mail half, then measure the incremental difference between the two groups in retail stores? That will tell us the answer, right?

Mark: We dont want to do that.

Dale: We dont?

Mark: No.

Dale: Why?

Mark: Because well lose sales if we do that. Maybe worse, well lose engagement if we dont contact our customers. I dont think you understand how critically important engagement is. All of the trade journals tell us we have to maximize engagement. You dont maximize engagement by executing a holdout test.

Dale: Fine. Maybe well just double email frequency next month to make up for it.

Mark: No, no, we cant do that. If we contact customers too much, theyll opt-out, and thats fatal for an email marketing program.

Dale: So you dont want to mail customers less, and you dont want to mail customers more, is that right?

Mark: Thats correct.

Dale: It sounds like you don t want to do anything different!

Mark: We just want to employ best practices. Trust my team. Were the experts.

Dale: Who subscribes to our email marketing campaign?

Mark: Oh, all kinds of customers. Prospects. Best customers. You name it.

Dale: What percentage of our email subscribers click through at least one email marketing campaign per year?

Mark: I dont know the answer. Thats not the way email marketers measure performance.

Dale: What percentage of our email subscribers purchase from at least one email marketing campaign per year?

Mark: I dont know the answer. Thats not the way email marketers measure performance.

Dale: What happens to sales if we double email marketing frequency?

Mark: I dont know the answer. But its not a good idea, I can tell you that.