Next Generation Email Metrics & Analysis

Digital Messaging Channels Continue to Proliferate

So What’s Worth Measuring in Email?

Four Categories of Meaningful Email Metrics

• Delivered, opens, clicks, conversions, unsubscribe requests

Process Metrics (Email Diagnostics)

• Forwards, shares with social, cross-channel conversionInfluence Metrics

• Questions, complaints, critique, frustration, problems, praiseFeedback Metrics

• ROI, AOV, LTV, Share of Customer, Measurement against business objectivesContribution Metrics

#1: Utilizing Process Metrics

NEW New RuleMeasure by Subscriber Lifespan

Old New Rule

Measure by Campaign/Program

Three Views of Process Metrics• By Campaign or Program (Point-in-time aggregate response)

• Allows for apples-to-apples performance comparison across different campaigns or programs

• Assess subject line, offer, creative, landing page performance

• By Segment• Allows for apples-to-apples comparison of response history across

different subscriber groups• Trend analysis of response actions by different group segmentation

• By Responder History• Frequency distribution of openers, clickers, converters, repeat

customers• Identifies responder engagement levels, gaps, clusters

Response Analysis by Segment

Source• Is a particular name source

yielding more responders? Better responders? Which?

Date• Are newer or older

subscribers or buyers more responsive?

Permission Type• Is a higher permission standard

translating into better response?

Social Media Connections• Which are connected to you on

social media and does that correlate to email response?

Purchase Channel• Who is more responsive to

email: single or multi-channel buyers?

Subscriber Engagement Analysis• Is the same small minority repeatedly responding to every

campaign?Analyze who they areObjective is to stimulate them to open second time

Analyze who they areAre they the same people campaign after campaign, or a rolling population from across the list?

Take a Longtail View of Subscriber Response

• Examine list reach, not just aggregate response rate

• Measure cumulative response actions per member over a period of time, and over their lifetimes

• Divide list members by response frequency. Examine frequency distribution of openers, clickers, and buyers

• Is there good random distribution across your list?

• Analyze frequent responders for biased clusters

• Goal: Move the needle on less active segments of your list• Focus test efforts here

Process Metric Key Takeaways

• Glancing at a basic report doesn’t cut it anymore– Knowing average open, click, conversion and unsub rates is a start, but

you need to go deeper

• Use both point-in-time and cumulative analysis– By program AND subscriber (or subscriber segments)

• All responders are not created equal– Only through back-end responder segmentation analysis will you find the

hidden gems and response hot pockets in your list or customer base

#2: Measuring Email’s Extended Influence

NEW New RuleMeasure integration with social media,

cumulative cross-channel effects

Old New Rule

Measure forwards or referrals

What Actions Does Email Influence?

• Forward to a Friend/ Email Pass-along

• Share-to-Social• Are you enabling from within your email?• How many people share from email to

social networks?

• Social Commentary/Review• Ratings• Social bookmarking

• Offline actions • Talk about you (WOM)• Shop/buy offline• Attend event

Social Influencers

Active Share Request (from site)• If you need or want to

accurately track email forwards, be intentional about it• Invite-a-friend call to

action online after sweepstakes and contest entries

• Track• # of list member entrants

who shared• Total # of entrants• Average shares per entrant• # of Second (and

subsequent) generation shares

Passive/Standard Share Request

• Dual share calls to action• Email forward• Share to Facebook

Managing FTAF

• Unique tracking codes are embedded in each link so marketer knows who is doing the forwarding

• Email forwards are centralized and controlled via VS

Managing Shares to Social• Facebook shares can be formulated to pre-populate with

preview image, copy and link• Twitter shares are pre-written and the tweet pre-populated

into user field

Comments, Ratings and Reviews• Email subscribers will talk about you online

• On your site/blog via comments• Your social media pages• Their social media pages• Other sites/blogs (especially ratings i.e., Trip Advisor, OpenTable)

• Email subscribers will rank and favorite your content• Social bookmarking (Digg, Google +1, FB “like”)

• These comments, ratings and reviews can positively or negatively impact page views, site visits, and revenue

• Who is tracking and measuring these? • You might need social monitoring/listening help• Resources: Radian6, SocialMention, Google Alerts, Hootsuite

Social Bookmarking Example

• Social share button embedded in email newsletter makes it effortless for subscribers to share or rank content

Email Can Influence Social Bookmarking Rank• Every time someone shares to Digg from your email

messages (plus other sources) you rank higher

Influence Metrics Key Takeaways

• Social extends the life and reach of your email– Whether you actively request shares to social or not, your email

content, offers, and goofs are more share-able and will be more public than ever before

• If you want shares (or viral sharing), be proactive– Always enable and centralize FTAF initiatives– Incent or reward with contests

• Listen, measure and monitor carefully– Hopefully someone already owns this task; remember to tie any

comments, questions or incremental purchases back to email

#3: Contribution

NEW New RuleCount TOTAL Responses

Old New Rule

Count Online Responses

All Responses Not Created Equal

• Actions besides conversions (like shares) have measurable value to you

• Assign a weighted (monetary if possible) value to each action that is meaningful to your business:• Example:

• Share to social = 1 point (or $x)• FTAF = 2 points (or $x)• Landing/Web Site Page View = 5 points (or $x)• New List Subscriber = 7 points (or $x)• Conversion/Purchase = 10 points (or $x)

• Count the number of meaningful actions and multiply them by a weighted value or typical cost to generate for a truer look at the total value of each campaign

Counting Total Responses

Total Campaign Cost Include list, delivery cost, creative, design, testing

$1,000

Valuable Response Actions

Sales 100 X AOV $50 $5,000

Sign-Ups 430 X CPA $2.00 $860

Page Views 1,000 X CPA $.50 $500

Forwards 276 X CPI $1.00 $276

Subtotal $6,636

Simple ROI $6,636 Less $1,000 = $5,636

Multi-Channel Conversion Tracking• Email will both directly and indirectly contribute to offline

purchases• Your back-end may not accurately be able to track conversions

because responders don’t always follow a trackable path• Short-term channel-suppression tests (via hold out groups) is one

way to gauge individual value of a email as a channel• Suppress 5% of regular email subscribers from program for a set period of

time (30 days)• Create a control the same size which receives regular email• Compare purchase behavior of emailed (control) vs. non-emailed (test)

groups• If control converting better than test group, the difference is the incremental

lift from your email marketing

Using Hold-Outs to Gauge Incremental Value of Email

• Caveats– Need to be emailing frequently and regularly (i.e. weekly or more

often)– Sometimes you won’t see a difference between test and control– Seasonality can create bias

• November/December sales volume so high it’s difficult to attribute conversions to only a single channel

– Some emails don’t resonate with online shoppers but do stimulate offline purchases, so the control could underperform the test group in online sales

Critical to measure conversion (sales) FROM ALL SOURCES

Calculating Total ConversionDelivered List Size 50,000

Conversions By Channel

Online – Direct from Email Campaign 1,000

Conversion Rate 1,000 / 50,000 2%

Online – via Social Network (share to social link in email)

430

Conversion Rate 430 / 50,000 .9%

Phone 150

Conversion Rate 150 / 50,000 .3%

In-Store 400

Conversion Rate 400 / 50,000 .8%

Total Conversion All Channels 1,980 / 50,000 4%

Contribution Measurement Key Takeaways

• Multiple response actions have value– Shares, subscribes, page views, friends/follows should all be counted

toward your campaign’s total economic value

• Conversion can happen directly or indirectly – Email creates some online conversions immediately, but influences

others that can be difficult to track– Use channel suppression test to measure incremental life of email

• If multi-channel, track TOTAL vs. ONLINE conversions– While not all off-line conversions can be attributed to a single source,

tracking codes/coupons sent via email can tie them back to a campaign

#4: Comparative Analysis

NEW New RuleProcess Metric Correlations

Old New Rule

Process Metric Raw Numbers

Deep Dive into Process Metrics• Compare week-over-week, month-over-month, year-over-year campaign

performance (head-to-head campaign comparison)

• Examine correlations as well as standard process metrics• Campaign A may have produced more opens and clicks than Campaign B,

but not necessarily more conversions or more money

• Correlations to Measure• Opens to clicks• Clicks to conversions

Campaign A Campaign B

Open Rate 48% 40%

Click-Through Rate 12% 5%

Conversion Rate 3% 4%

25% of those who opened clicked

12.5% of those who opened clicked

25% of those who clicked converted

80% of those who clicked converted

Another Scenario• Side-by-side campaign comparison should go beyond basic process

metrics to the bottom line• Correlations to Measure

• Opens to clicks• Clicks to conversions• Conversions to AOV

Campaign A Campaign B

Starting Total 10,000 Names 10,000 names

Open Rate 35% 55%

Click-Through Rate 15% 15%

Conversion Rate 5% 3%

Average Order Value $150 $250

Total Revenue $75,000 $75,000

43% of those who opened clicked

27% of those who opened clicked

33% of those who clicked converted

20% of those who clicked converted

Comparative Analysis Key Takeaways

• Higher or lower process metric percentages don’t always translate into more or less money

• Higher or lower ratios of process metrics to one another don’t always translate into more or less money

• Higher initial response does not always translate into higher final revenue• You have to take the analysis all the way through to the bottom line

(revenue) to see which campaign was a winner• But!

• You can learn which subject lines, email creative, or offers pull best and test a combination of best efforts from across multiple campaigns

#5: Economic Impact

NEW New RuleRPE & AOV

Old New Rule

ROI

The Longstanding Email Contribution Measure: ROI

• But with send costs so low, is this really the best way to measure financial impact?

Step 1: Figure Cost

• Copy and creative design

• List rental• Transmission Fees• Landing Page design

or website revisions• Tests

Step 2: Count Response

• Know your starting total

• Click-throughs• Conversions• Unsubscribes• Undeliverables

Step 3: Calculate Return

• Subtract total campaign cost from total sales to calculate return on sales

• Did your campaign generate a positive return on sales? On profits?

Revenue Per Email (RPE)• Perhaps even more important than ROI as a measure of channel success

• Revenue generated divided by (email quantity sent minus number of bounces)• Example:

• $100,000/(20,500 emails sent – 500 bounces) =• $100,000/20,000 emails presumed delivered = • $5.00 per email address

• OR to simplify• Multiply by 1,000 to determine Revenue per Thousand Emails (RPME)

• $5,000 per 1,000 emails sent

• Calculate by• Individual email campaign• Goal period (monthly/quarterly/annual)• Life of email program or series (important if testing a frequency strategy)

The Bottom Line: AOV & Total Revenue• Look beyond Process Metrics and ROI by calculating both Average

Order Value (AOV) and RPE regularly• Higher conversion rates alone don’t matter if AOV is below average

• Example:

• Campaign B required twice as many sales to produce the same revenue as Campaign A• Something is motivating responders to spend more per sale in Campaign A • Find out what, then work on raising conversion rate

Campaign A Campaign B

Delivered Total 1,666 1,714

Conversion Rate 3% 7%

Number of Orders 50 120

AOV $200 $100

Total Revenue $ $10,000 $12,000

RPE $6 $7

Economic Impact Key Takeaways• ROI a useful measure, but also look at top-line revenue (and other

response value) directly attributable to email– Revenue per email (RPE) an important benchmark metric to gauge the health

of your program over time– Measure it campaign by campaign, but also for the life of a program; YTD for

program

• Beware apples to oranges comparisons– Higher conversion rates don’t necessarily equal more revenue– Average order values can and do vary and will impact the bottom line

• At the end of the day, it’s about how much money email marketing contributes to the coffers!– Higher open and click rates don’t mean squat if they don’t clearly correlate to

higher conversion rates, more RPE, and better AOV

Next Generation Email Metrics & Analysis

Questions?

Contact Information

• Karen Talavera• Synchronicity Marketing (www.synchronicitymarketing.com)• Email: karen@synchronicitymarketing.com• Phone: (561) 967-9665• Facebook: www.facebook.com/SynchronicityMarketing• Twitter: @SyncMarketing

• Austin Bliss• FreshAddress (www.freshaddress.com)• Email: austin@freshaddress.com• Phone: (617) 965-4500• Twitter: @FreshAddress