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Email: BeyondOpens and Clicks

KCDMA | February 11, 2014

Jeanne S. JenningsVice President, Global Strategic Services

Alchemy Worxa 100% Email Marketing Agency

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Session Overview

• Revenue

• Conversion

• Send Metrics

• Testing Metrics

• Combining Metrics

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Revenue MetricsEmail: Beyond Opens and Clicks

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Return on Investment (ROI)There are a couple different ROI calculations

Data

• Source: Web Analytics and

• Track:

• Revenue generated from the email

• Costs, which may include:

• Marketing cost

• Cost of goods or services sold

• Any overhead, contribution or other costs (salaries, operational expenses, etc.)

Calculation

Revenue

Costs (Marketing or all)

• Which costs are included varies from company to company

• Expressed as “dollars generated for each dollar spent”

• So an ROI of $28 means for each $1 spent, $28 is returned

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List ROIProfitable Lists

• STR Teacher Express ($3.08 )

• TSO Customers ($1.03)

Not Profitable Lists

• Teacher Newsletter ($0.59 ROI)

• SBC Red Apple ($0.43 ROI)

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Revenue per Email (RPE)When true ROI is difficult to track; to combat list fatigue

Data

• Source: Web Analytics and Email Metrics

• Track:

• Revenue generated from email

• Quantity of email assumed delivered (sent and didn’t bounce)

Calculation

Revenue

Non-Bounce Send Quantity

• Easier to calculate (usually) than ROI

• Can be used both for individual sends as well as for all sends in a given week, month, quarter, etc.

• If the number is very low, calculate RPME – revenue per thousand emails assumed delivered

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Revenue per Thousand Emails Assumed Delivered (RPME)

Quarterly – all business units

Source: Client Case Study, JeanneJennings.com, Inc.

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Average Value of an Email AddressHow much is an email address worth to your organization?

Data

• Source: Web Analytics and Email Metrics

• Track:

• Revenue generated from email

• Average number of email addresses on the list

• Usually calculated annually

Calculation

Total revenue generated from email

Average Size of Email List

• Benchmark for improvement

• Useful for determining how much you can afford to spend to get a new email address

Annual Revenue from

Email 12,030,960$

Average List Size 2,023,345

Average Annual Value of

an Email Address 5.95$

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Final Analysis After Tracking Actual Performance

Source Type Cost Per Lead

Actual Value of an

Email Address by

Source (Annual)

Actual Return

on Spend

A LinkedIn Ad 2.28$ 5.75$ 2.52$

B List Rental 5.90$ 2.02$ 0.34$

C Telemarketing 9.48$ 36.27$ 3.83$

Average Value of an Email AddressInitial Analysis After Test Period

Source Type Cost Per Lead

Average Annual

Value of an Email

Address (Current

List)

Estimated

Return on

Spend

A LinkedIn Ad 2.28$ 5.95$ 2.61$

B List Rental 5.90$ 5.95$ 1.01$

C Telemarketing 9.48$ 5.95$ 0.63$

Initial Analysis After Test Period

Source Type Cost Per Lead

Average Annual

Value of an Email

Address (Current

List)

Estimated

Return on

Spend

A LinkedIn Ad 2.28$ 5.95$ 2.61$

B List Rental 5.90$ 5.95$ 1.01$

C Telemarketing 9.48$ 5.95$ 0.63$

Final Analysis After Tracking Actual Performance

Source Type Cost Per Lead

Actual Value of an

Email Address by

Source (Annual)

Actual Return

on Spend

A LinkedIn Ad 2.28$ 5.75$ 2.52$

B List Rental 5.90$ 2.02$ 0.34$

C Telemarketing 9.48$ 36.27$ 3.83$

Source: Leveraging the Value of Your Email List, Jeanne Jennings for ClickZ.com, June 24, 2013

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Lifetime Value of an Email AddressHow much is an email address worth to your organization over its lifetime?

Data

• Source: Web Analytics and Email Metrics

• Track/Calculate:

• Annual average value of an email address

• Average time in years that an email address on your list remains active

Calculation

Annual Average Value of an Email Address * Average Time

Active on List in Years

• Useful for estimating future revenue and anticipating when performance will drop off

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NUDGE EFFECTCross-channel impact of your

emails

Data:

• Source: Purchase

data and Email

Activity Data

• Track by subscriber:

– Purchases online and offline

– Open or Don’t Open

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NUDGE EFFECTTake a holistic view of email success

Revenue from other channels on days when email campaigns were sent vs. days without

Holistic view:

• Look at those campaigns that may be driving subscribers elsewhere.

• Test subject lines that boost store footfall at key times.

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Four Elements of an Attribution Model

1. Action: sent, open or click (email)

2. Product(s): just those featured, those featured along with anything else in the cart, any product (featured or not)

3. Timeframe: days, weeks, months from action

4. Order of touch: first, last, any

Define too broadly and you’re overstating revenue…

Define too narrowly and you’re understating it…

What percentage of unattributed revenue is acceptable?

Revenue Attribution What Revenue Gets Attributed to Email?

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One Purchase –Different Attribution Models

Attibution Models

Model A Model B Model C Model D Model E Model F Model G

Action Click Click Click

Opened /

Displayed

Opened /

Displayed

Sent /

Displayed

Sent /

Displayed

Timeframe 0 days 7 days 7 days 14 days 14 days 28 days 28 days

Product(s)

Featured

plus

Featured

only

Featured

plus

Featured

only

Featured

only

Featured

only

Featured

plus

Touch Last First First First Last First Any

Total Revenue 45$ 45$ 45$ 45$ 45$ 45$ 45$

Attribution:

SEM -$ -$ -$ -$ -$ 20$ 45$

Email -$ 15$ 45$ 35$ 20$ 15$ 45$

Display -$ -$ -$ -$ 15$ -$ 45$

% Attributed 0% 33% 100% 78% 78% 78% 300%

% UnAttributed 100% 67% 0% 22% 22% 22% -200%

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Hybrid Attribution Model

Hybrid Attibution Model

Direct Indirect Indirect

Action

Click (All

Channels)

Open or

Click

(Email)

Display

or Click

(SEM or

Display)

Timeframe 14 days 14 days 14 days

Product(s)

Featured

plus

Featured

only

Featured

only

Touch Last Not Last Not Last

Total Revenue 45$ 45$ 45$

Attribution:

SEM -$ -$ -$

Email 45$ -$ -$

Display -$ -$ 15$

% Attributed 100% 0% 33%

% UnAttributed 100% 100% 100%

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Conversion MetricsEmail: Beyond Opens and Clicks

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Abandon RateEmail Acquisition Process or any other Conversion FunnelHow effective is my conversion funnel?

Data

• Source: Web Analytics

• Track: people who make it to the initial landing page but don’t convert

• Good to have an overall figure from start to finish

• Tracking page-by-page (for multi-page conversion funnels) tells you where you are losing them

Calculation(Unique Visitors – Conversions)

Unique Visitors

• Unique Visitors to first page of the conversion funnel

• Conversions , the number of people who completed the goal action

• Signs-ups for acquisition process

• Can also be leads generated or sales

• For page-by-page analysis, next page in the process

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• Collect data after each page, not at end

• Partial info is better than no info

• Prioritize the pages

• What’s more critical – lead scoring questions or phone and USPS address?

• Test to lower the abandon rate on the Lead Scoring Questions Page

Start – Page 1

Email Address

and Name

Page 2

Lead Scoring

Questions

Page 3

Phone and

USPS Address

Finish – Page 4

Thank You

Unique

Visitors

Conversion

Rate

Abandon

Rate

Start - Page 1 10,000 80% 20%

Page 2 8,000 19% 81%

Page 3 1,500 67% 33%

Finish - Page 4 1,000

Start to Finish 10% 90%

Abandon RateAny Conversion Funnel

90%

Abandon

Rate –

Conversion

Funnel

could be

better

(Goal: 50%

or less)

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Website Email Conversion RateHow effective is my Website at driving Email Sign-ups?

Data

• Source: Web Analytics

• Track:

• Unique NEW Visitors per Month

• Online Email Sign-ups per Month

Calculation

Email Sign-Ups

Unique NEW Visitors

• Unique NEW Visitors weeds out previous visitors, a high percentage of which have signed up previously

• If you have acquisition efforts in place driving directly to the sign-up page, you’ll want to exclude these folks from both data points

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Unique

NEW

Visitors

Email

Sign-Ups

Website

Email

Conversion

Rate

Website

Revenue

Generated

Control 5,738 748 13.0% 20,024$

Test 5,492 933 17.0% 25,494$

Lift 30% 27%

Website Email

Conversion Rate

Online Email Sign-up

Control

Test

30% lift in Website

Email Conversion Rate

Revenue generated

didn’t decrease, in fact

it increased

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Send MetricsEmail: Beyond Opens and Clicks

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REACHOverall Email Program or Individual Sub-program

How much of my subscriber base is engaged with my program?

Data:• Source: Email activity data• Track: Number of unique

subscribers who open an email.

– Typically measured email by email over a Quarter and/or a Year.

De-duped list of all email

addresses that opened

De-duped list of all email

addresses that were delivered

OpenReach =

De-duped list of all email

addresses that clicked

De-duped list of all email

addresses that were delivered

ClickReach

=

Calculation:

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REACHFocus on subscriber

behaviour

• Goal depends on your

program

– Weekly or less: 50% Open Reach

– More often: 70% Open Reach

• Look out for the emails that

give you those new Engagers

vs. attracting repeat.

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Lifecycle of an Email Address

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Mobile View Rate

Source: Mobile Maintains 51% Majority; Gmail Gains 3%, Justine Jordan for the Litmus Blog, January 9, 2014

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Mobile v. Desktop View RateHow much effort should I make to address mobile?

• Reported, not calculated

• Device type as well as operating systems

• Match your resource expenditures on mobile to your current and projected mobile view rate

• Responsive design vs. narrow fixed width

Source: SubscriberMail

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Responsive DesignUsually Best…

But Think it

Through

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Testing AnalyticsEmail: Past Opens and Clicks

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Estimated Sample SizeHow many emails should I send to have a good chance of getting statistically significant results?Data

• Source: Email Metrics and Assumptions

• Track:

• Average expected conversion rate (CR)

• Minimum lift you’re looking for (Lift)

Calculation

31.38 * CR * (1-CR)

(Lift * CR) * (Lift * CR)

• Split the quantity returned between 2 cells

• My rule: minimum of 20,000 per test cell (over multiple sends if necessary)

1.0%

25%

49,706

24,853

24,853

Average expected conversion rate

Minimum lift desired

Total Send Quantity Needed (Control + Test Cells)

Control Cell

Test Cell

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Statistical Significance (95%)Are my test results valid?

Calculations (Excel Formulas)

• Conversion Rate (CR: Control and Test)=Conversions/Quantity_Assumed_Delivered

• Standard Error (SE; Control and Test)=SQRT ((CR*(1- CR)/Quantity_Assumed_Delivered)

• Z-Score (Z_Score)=(Control_CR-

Test_CR)/SQRT(POWER(Control_SE,2)+POWER(Test_SE,2))

• P-value (P_Value)=NORMDIST(Z_Score,0,1,TRUE)

• Statistical Significance=IF(OR(P_Value<0.05,P_Value>0.95), “YES”, “NO”)

Or…

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Statistical Significance Are my test results valid?

Use a Free Online Calculator

• Hubspot.com

• TheKeystoneSolution.com

• UserEffect.com

• VisualWebsiteOptimizer.com

Most use Website terminology – but they work just fine for email (visits = quantity assumed delivered)

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Combining MetricsEmail: Past Opens and Clicks

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Combine Metrics to Set Goals and Prioritize Time and Resources:Bubble Chart

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Source: Diagnosing a Common Email Malady: ‘Revenue Failure,’ Ed Henrich (ClickZ), March 4, 2010

Combine Metrics to Identify Areas ofStrength and Weakness:Data Tree Analysis

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Additional ResourcesEmail: Past Opens and Clicks

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Additional Email Marketing Resources (Free)

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

www.ClickZ.com

The Alchemy Worx email newsletter;

Read past articles and sign-up at

www.alchemyworx.com/emailworx/

@JeaJen to follow Jeanne

@AlchemyWorx to follow the agency

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Additional Email Marketing Resources (Paid)

The Premier Email Marketing Association, part of the DMA; Resources and Annual Conference

www.EmailExperience.org

A Private Community for Email Marketers; Discussion Lists and Meetups (Feel free to say I referred you); Look for Jeanne’s monthly post on the blogwww.OnlyInfluencers.com

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Alchemy WorxA 100% Email Marketing Agency

• Services offered include strategy, creative, production and deployment

• We are ESP agnostic – we handle deployment for many clients through a variety of ESPs

• Headquartered in London; US Headquarters in Atlanta

• Founded in 2001 by Dela Quist, CEO

• Jeanne joined the team in 2013, after having her own email marketing consultancy for 12 years

• Call us! We’d love to help make your email marketing more effective and more profitable

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Email: Beyond Opens and ClicksKCDMA | February 11, 2014

Thanks for Joining Us Today!

Questions?Jeanne S. JenningsVice President, Global Strategic Services

404.922.7448 | JJennings@AlchemyWorx.com

Alchemy Worxa 100% Email Marketing Agency

www.AlchemyWorx.com