email profits down - how to analyze and fix it (jeanne jennings)

1Plan to Engage Webinar | March 11, 2014

Email Profits Down?How to Analyze Why and

Fix The ProblemMarch 2014

Jeanne S. JenningsVice President, Global Strategic Services


What is a Revenue Tree?

A. A visual way to delve into your email marketing program and see areas of year-over-year change

B. A good way to present data to those who aren’t spreadsheet geeks

C. The topic of today’s Webinar

D. All of the above


Revenue Tree


Where we Start…


For the Sake of Our Webinar

• Single company or business unit sending…• 1 Stand-alone Promotional Email a Month

• 1 Email Newsletter with a mix of Editorial and Promotional Email a Month

• A Welcome Message to New Subscribers with promotional content


First… Isolate Email Efforts


First… Isolate Email Efforts

This will help you focus

your analysis – and not

spend time where there

aren’t issues.


Stand-alone Promotional EmailEmail Profits Down?How to Analyze Why and Fix The Problem


Stand-alone Promotional Email



It’s the number of orders,

not the average order

value, that is to blame for

the decrease



The clicks are converting

at the same rate… but the

conversion rate from

quantity sent is way down



The click-through rate is

down – but the open rate

isn’t.


Next Steps…

The problem lies with the body of the email –people are opening but they aren’t clicking like they did last year

• Continue the Revenue Tree analysis looking at the links in the email

• Look at individual links – compare YOY by placement and call-to-action language

• Also look at the copy around the call-to-action links; what was there last year that’s not here this year

• Test incorporating your learnings on the links into a test for your next send


How Are We Doing?

Pretty well. We’ve pinpointed the primary cause of the first month’s revenue variance; we know what to focus on to try to correct the problem.

Year 1 Year 2 Dollars Percentage Dollars

% of

Variance

Month 1 1,034,960$ 711,411$ (323,549)$ -31% (383,549)$ 119%

Month 2 1,066,792$ 837,578$ (229,214)$ -21%

Month 3 1,118,050$ 866,120$ (251,930)$ -23%

YOY Revenue VarianceRevenue

Month

Stand-alone

Decreased Click-

through Rate


Email NewsletterEmail Profits Down?How to Analyze Why and Fix The Problem


Email Newsletter


Email Newsletter

Once again, It’s the number

of orders, not the average

order value, that is to blame

for the decrease


Email Newsletter


Email Newsletter

The conversion rate from clicks was

down both months… but was it down

for the same reason both months…


Email Newsletter


Email Newsletter

The click-through rate on

promotional links was down

dramatically in Month 3… time to

dive into a deeper link analysis. But

what about Month 2?


Email Newsletter

In Month 2 the problem didn’t lie with

the email – it was the landing page

that caused a drop in conversions


Next Steps…1. One problem lies with the promotional links in the body of the email – people are opening and clicking on editorial links but they aren’t clicking on the promotional links like they did last year (Month 3)

• Continue the Revenue Tree analysis looking at the promotional links in the email

• Look at individual promotional links – compare YOY by placement and call-to-action language

• Also look at the copy around the promotional call-to-action links; what’s different from last year

• Test incorporating your learnings on the promotional links into a test for your next send


Next Steps…

2. There’s also an issue with the landing page –people are clicking through but they aren’t converting like last year (Month 2)

• Continue the Revenue Tree analysis looking at how visitors are engaging with your landing page

• Where are they going instead of converting? Can you close these exits?

• Are there elements of that landing page that make visitors more likely to convert? If so, make these more prominent

• Test incorporating your learnings in the landing page for your next send


How Are We Doing?

Pretty well. We’ve pinpointed the primary cause of 86% or more of the variances in all three months; we know what to focus on to try to correct the issues. But it still makes sense to look at the welcome message.


% of

Variance Dollars

% of

Variance Dollars

% of

Variance

Month 1 1,034,960$ 711,411$ (323,549)$ -31% (383,549)$ 119%

Month 2 1,066,792$ 837,578$ (229,214)$ -21% (219,830.85) 96%

Month 3 1,118,050$ 866,120$ (251,930)$ -23% (216,538)$ 86%


Month

Stand-alone

Decreased Click-

through Rate

Newsletter

Decreased Landing

Page Conversion

Decreased Promo

Click-through Rate


Welcome MessageEmail Profits Down?How to Analyze Why and Fix The Problem


Welcome Message


Welcome Message

Both the number of orders and

the average order value

decreased in Month 3; so we

know we have to look into AOV…

but what else?


Welcome Message


Welcome Message

Neither of the conversion rates

are down, in fact they’re up from

last year…what else should we

look at?


Welcome Message


It’s the send quantity – that’s what

decreased and caused revenue to

drop

Welcome Message


Next Steps…

1. One issue is that the average order value has dropped significantly• Take a look at the promotional offer in your welcome

message – was it for a lower cost produce in Month 3?

• Or were people less likely to add additional items to their cart?

• Test different products – incorporate popular products which are near (not far below) the average order that a new subscriber is willing to purchase

• Test incorporating your learnings in your future welcome messages


Next Steps…2. There’s also an issue with your acquisition process –your list isn’t growing as quickly as it was last year. While this is a small revenue problem now, it will turn into a larger one as fewer new people are added to your list

• Time to analyze and optimize your sign-up process• Look at your online sign-up form – are fewer people starting

the process or is it that fewer people are finishing it once they start?

• If fewer people are starting it, you need to look at your calls-to-action and other sources driving traffic there

• If more people are abandoning before they complete the process, you need to do an analysis of the flow the look to close the exits

• Test incorporating your learnings on your acquisition process


How Are We Doing?

Very well. We’ve identified what’s causing more than 96% of the variance each month. Now we just have to make qualitative adjustments to correct it.


% of

Variance Dollars

% of

Variance Dollars

% of

Variance Dollars

% of

Variance Dollars

% of

Variance

1,034,960$ 711,411$ (323,549)$ -31% (383,549)$ 119%

1,066,792$ 837,578$ (229,214)$ -21% (219,830.85) 96%

1,118,050$ 866,120$ (251,930)$ -23% (216,538)$ 86% (14,949)$ 6% (30,526)$ 12%


Stand-alone

Decreased Click-

through Rate

Newsletter

Decreased Landing

Page Conversion

Decreased Promo

Click-through Rate

Decreased Average

Order Value

Welcome Message

Decreased Send

Quantity


Now the DataEmail Profits Down?How to Analyze Why and Fix The Problem


Where You Usually Start

Total

Quantity

Sent Orders Revenue

Average

Order

Revenue

Variance ($)

Revenue

Variance (%)

Month 1 5,550,185 7,451 1,034,960$ 139$

Month 2 5,744,580 7,713 1,066,792$ 138$

Month 3 5,925,637 8,272 1,118,050$ 135$

Month 1 6,062,292 5,238 711,411$ 136$ (323,549.00) -31%

Month 2 6,180,595 5,811 837,578$ 144$ (229,214.12) -21%

Month 3 6,138,871 6,246 866,120$ 139$ (251,929.69) -23%

Q1, Year

1

Q1, Year

2

List Size

Beginning List Size End

Average List

Size

List Growth

% List Growth

List Attrition

% List Attrition

Month 1 2,654,321 2,757,840 2,706,080 5.2% 138,024.69 -1.3% (34,506.17)

Month 2 2,757,840 2,851,606 2,804,723 4.9% 135,134.14 -1.5% (41,367.59)

Month 3 2,851,606 2,940,006 2,895,806 4.7% 134,025.48 -1.6% (45,625.70)

Month 1 2,940,006 3,001,746 2,970,876 4.1% 120,540.24 -2.0% (58,800.12)

Month 2 3,001,746 3,061,781 3,031,763 3.9% 117,068.09 -1.9% (57,033.17)

Month 3 3,061,781 3,031,163 3,046,472 1.5% 45,926.71 -2.5% (76,544.52)

Q1, Year

1

Q1, Year

2


Granular DataStand-alone Promotion

Quantity

Sent

Assumed

Delivered

Rate Open Rate

Click-through

Rate

Click-to-

Open Rate

Click-through

Rate on

Promotions

Click-to-

Open Rate on

Promotions

Conversion

Rate from

Clicks

Conversion

Rate from

Sent

Conversion

Rate from

Promotional

Clicks Orders Revenue Avg Order

Month 1 2,657,531 98.9% 20.9% 3.9% 18.7% 3.9% 18.7% 3.84% 0.15% 3.84% 3,936 562,829$ 143$

Month 2 2,761,050 98.6% 21.5% 3.7% 17.2% 3.7% 17.2% 3.99% 0.15% 3.99% 4,019 562,670$ 140$

Month 3 2,854,816 99.1% 21.1% 3.9% 18.5% 3.9% 18.5% 3.92% 0.15% 3.92% 4,325 601,198$ 139$

Month 1 2,943,216 98.9% 21.5% 1.1% 5.1% 1.1% 5.1% 3.87% 0.04% 3.87% 1,239 179,279$ 145$

Month 2 3,004,956 98.5% 20.9% 3.4% 16.3% 3.4% 16.3% 3.91% 0.13% 3.91% 3,935 554,816$ 141$

Month 3 3,064,991 98.8% 20.2% 3.8% 18.8% 3.8% 18.8% 3.82% 0.14% 3.82% 4,396 637,384$ 145$

Newsletter

Q sent

Assumed

Delivered

Rate Open Rate

Click-through

Rate

Click-to-

Open Rate

Click-through

Rate on

Promotions

Click-to-

Open Rate on

Promotions

Overall

Conversion

Rate from

Clicks

Overall

Conversion

Rate from

Sent

Conversion

Rate from

Promotional


Month 1 2,754,630 98.7% 24.9% 4.4% 17.7% 2.9% 11.6% 2.6% 0.11% 3.88% 3,059 382,402$ 125$

Month 2 2,848,396 98.5% 27.5% 4.5% 16.4% 2.8% 10.2% 2.6% 0.11% 4.10% 3,221 409,055$ 127$

Month 3 2,936,796 99.3% 26.6% 4.6% 17.3% 3.0% 11.3% 2.6% 0.12% 3.99% 3,491 429,361$ 123$

Month 1 2,998,536 96.2% 27.9% 4.8% 17.2% 3.1% 11.1% 2.6% 0.12% 4.00% 3,577 443,535$ 124$

Month 2 3,058,571 95.9% 26.6% 4.8% 18.0% 2.8% 10.5% 1.1% 0.05% 1.80% 1,478 189,225$ 128$

Month 3 3,027,953 95.6% 25.6% 4.9% 19.1% 1.5% 5.9% 1.2% 0.06% 3.89% 1,689 212,823$ 126$

Welcome Message

Q sent

Assumed

Delivered

Rate Open Rate

Click-through

Rate

Click-to-

Open Rate

Click-through

Rate on

Promotions

Click-to-

Open Rate on

Promotions

Overall

Conversion

Rate from

Clicks

Conversion

Rate from

Sent

Conversion

Rate from

Promotional


Month 1 138,025 93.3% 40.1% 4.3% 10.7% 3.1% 7.7% 8.2% 0.33% 11.41% 455 89,730$ 197$

Month 2 135,134 93.6% 42.0% 4.5% 10.7% 3.3% 7.9% 8.3% 0.35% 11.33% 473 95,067$ 201$

Month 3 134,025 93.5% 41.5% 4.6% 11.1% 3.2% 7.7% 7.9% 0.34% 11.36% 456 87,492$ 192$

Month 1 120,540 93.3% 42.3% 4.2% 9.9% 3.4% 8.0% 8.9% 0.35% 11.03% 422 88,597$ 210$

Month 2 117,068 93.6% 41.2% 4.1% 10.0% 3.2% 7.8% 8.9% 0.34% 11.35% 398 93,537$ 235$

Month 3 45,927 93.8% 41.9% 4.0% 9.5% 3.5% 8.4% 9.3% 0.35% 10.66% 161 15,914$ 99$

Parsing the Revenue Lost in Month 3 by the (a) decrease in send quantity and (b) decrease in average order value

A Month 3 134,025 93.8% 41.9% 4.0% 9.5% 3.5% 8.4% 9.3% 0.35% 10.66% 469 46,440$ 99$

B Month 3 45,927 93.8% 41.9% 4.0% 9.5% 3.5% 8.4% 9.3% 0.35% 10.66% 161 30,863$ 192$

Q1, Year

1

Q1, Year

2

Q1, Year

2

Q1, Year

1

Q1, Year

2

Q1, Year

1


Additional ResourcesEmail Profits Down?How to Analyze Why and Fix The Problem


Additional Email Marketing Resources

Look for Jeanne’s column on email marketing every other Monday

www.ClickZ.com

@JeaJen to follow Jeanne

http://www.clickz.com/


Additional Email Marketing Resources

The Premier Email Marketing Association, Part of the DMA; Dela and Jeanne usually both speak at their annual conference

www.EmailExperience.org

A Private Community for Email Marketers offering Discussion Lists and Meetups; Look for Jeanne’s monthly posts on the blog

www.OnlyInfluencers.com

http://www.clickz.com/

http://www.onlyinfluencers.com/


Email Profits Down?How to Analyze Why and Fix The

Problem

March 2014

Thanks for attending! Questions?

Jeanne S. JenningsVice President, Global Strategic Services202.365.0423 | [email protected]

email profits down - how to analyze and fix it (jeanne jennings)

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