Kick off the new year by finally putting those new year’s marketing resolutions into action. To help improve your insights and marketing performance we have put together a set of metrics that will help move you past the traditional vanity metrics (a.k.a. onametrics) and improve your bottom line. Many marketers rely on these top of the funnel metrics because “this is what we have always used” or because their organizations struggle to access their point of sale data to turn it into something actionable across their outbound communication channels. Of the hundreds of custom metrics that have been developed to solve marketers’ challenges, a handful stand out as ones that have broad applicability across programs and will have value for most marketers. If your email program is mostly “mass blast” or your access to data is limited, then these metrics are for you.
One of the most frustrating things to see is a marketer who knows they should be creating more relevant, personalized communications, but continues to serve up one-size fits all communications. There are often good reasons for this, but it perpetuates the challenges that keep them from getting to segmented or 1-to-1 communications, which in today’s era of Big Data and real time technology are realistic options for all marketers. This article highlights common marketer challenges and provides metrics that help measure the problem and can help build your case for investing in data and technology integrations to support more effective marketing as part of the long-term vision all marketers should be pursuing.
Are you unwittingly damaging your mailable customer base?
A mass-blast email message may be considered profitable at first glance, but standard metrics can mask major damage to a marketer’s mailable audience. This is an all to common problem. According to Michael Fisher, former President of Yes Lifecycle Marketing (formerly known as Yesmail) “Should marketers take their proverbial blinders off, many will see growing problems in their customer base. Far too often we see excessive promotional activities that lead to reduction in audience size. Simple reporting based on metrics you can derive from standard data points and a view of inactive members vs. active members measured month over month, and year over year, provides an immediate view into the health of a business, and quite often points to challenged acquisition strategies. Far too few businesses have this kind of insight.”
One of the most egregious examples I have ever seen was a well-respected retailer whose post-holiday campaigns were profitable, but they didn’t realize the impact it was having on their unsubscribe rate. These campaigns resulted in 9 subscribers removing themselves from all future touch points (negative engagement), per single click (positive engagement). Not even for a conversion, just a click. Considering this was more than 31x their normal unsubscribe rate and nearly an inversion of the email channel benchmark ratio (10 clicks per unsubscribe), the damage to the customer lifetime value was significant. Sure, the short-term revenue looked good, but when tens of thousands of repeat customers negatively engaged with those messages to stop all future communications the impact on the brand’s marketable audience and lifetime value far outweighed the short-term benefit. Unfortunately, standard and vanity metrics made it easy to overlook this.
Are you over communicating and turning customers off to your brand?
If you are sending more than one promotional message per day, odds are you are. A great metric that all email teams can start to monitor to guard against email burnout, without any cross-system data integration work, is the Click to Unsubscribe Ratio. This metric compares two types of engagement and should be calculated at all levels of measurement (campaign, program, message type, offer type, audience segment, etc.). Based on a positive interaction (a click) and a negative interaction (an unsubscribe), it is calculated simply by dividing number of unique clicks by the number of unsubscribes. If this is less than one it means you have more unsubscribes than individuals clicking which is a pretty obvious red flag, even if it is profitable in the short term. For reference, based on Mail Chimp’s current benchmarks their 46 tracked industries range from 4 to 39 clicks per unsubscribe with an average of 10 clicks per unsubscribe.
Can’t get to the data to calculate an individual ROI?
Getting the penny pinchers to invest in marketing technology that actually helps you hit your goals is rarely an easy task, and in fairness it is their job to ask the hard questions. Often real-world results are more compelling than logical reasoning. Let the results do the talking. True campaign ROI and customer level LTV is channel agnostic, but in the absence of that, the ability to show a limited version in the form of Revenue per Active Record can be very powerful, as can the lift generated by more data driven tactics. This metric can be applied to broad-spectrum use cases including measuring prospect source performance, determining the incremental impact of new relationship building programs (i.e. non-revenue programs), and projecting the revenue impact if customer retention or engagement improved.
Concerned your acquisition program is under performing?
Take a page from the catalog world where each touch often costs 1,000x more than a single email touch by tracking the percent of new customers who return for subsequent conversions. This view of customer behavior was necessary as often very few catalog acquisition audiences were profitable with the initial touch so a longer-term perspective was necessary to determine which leads ultimately turned out to be profitable. Tracking prospects by source, ideally by time cohorts to measure the % of Prospects with 2 Conversions and % of Prospects with 3+ Conversions provides marketers with additional insight into which source drives the best long-term engagements and the highest lifetime value.
Does your organization’s fear of losing revenue make it hard to change the status quo?
If you think you aren’t getting as much as you could out of your subscriber base, you are right but the fear is unjustified. Analysis of over a hundred brands at the individual subscriber level showed that, on average, an appalling 19% of email subscribers EVER clicked on ANY email from an individual brand. Nearly half had opened one or more emails but most never clicked. Never. Not even once. Tapping into this 81% represents a key opportunity to grow email-based revenue for all marketers, and should be the subject of creative and aggressive testing efforts. If they have never clicked and they have never converted, the risk is non-existent. Start to monitor this by looking at the % Who Have Ever Clicked on 1 or more email messages in the last 12 months. You can also use the metric’s associated data attribute as a flag for testing escalating offer values, non-financial incentives, and within existing forms of targeted outreach such as Reactivation programs.
It’s a new year and with another year of blue sky goals on the horizon, it is time to figure out how you will reach them. These metrics are a good starting point to help you not only identify immediate opportunities and threats but also help build your case for greater access to siloed data. Move beyond vanity metrics in 2020 to build a stronger foundation for continued growth and an improved customer experience!
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