Sending out an email blast and watching open rates blow up, click-throughs go through the roof and conversions skyrocket makes marketers happy. Conversely, getting all psyched up for your next email campaign — carefully planned to emulate the winning elements of your previous blast — only to watch your metrics fizzle out is less inspiring.
You worked hard crafting pithy, compelling subject lines. Your calls-to-action were well introduced and relevant. Your creative was top-notch. You targeted the right people. So what happened?
Maybe customers were fatigued from your previous offers. Maybe their appetite for a particular type of product you were promoting was satisfied for the time being. Maybe your competitors sent a similar campaign to the same audience. Maybe it was something else entirely. But how many insights into these issues can you actually glean from open rates, click-throughs, conversions and the like? How useful are these metrics for predicting future success or achieving specific goals such as higher retention and better margins?
Lots of data, few answers
Many marketers are data rich, but knowledge poor. They have a CRM or email software that can tell them what people clicked on in past emails, what they bought, their age, their gender and so on, but past a certain point they can’t really make sense of the data.
Some, including PCmag.com’s John C. Dvorak, doubt the value of what they see as information overload. Dvorak points out that, “The key is not the data, but the challenge of how to handle the data and what to do with the data itself.”
Indeed, you can probably discern a number of patterns in your CRM or ESP. For example, a certain segment may have a greater affinity with certain products than other segments do. But how useful is this beyond maintaining the status quo? Does knowing that women tend to like women’s products and men tend to like men’s products give you an edge over your competition who are probably privy to this same insight?
When everyone is reacting to the same patterns, they tend to do similar things. This is how your competitors’ email calendars end up looking very much like your own while the people who receive such emails become jaded and fatigued.
Your data can be used to allow you to differentiate yourself from competitors and meet both your near-term and strategic objectives in a lucid and deliberate manner, but new methods are required to do so.
Intuition vs. science
According to a recent email marketing survey by Econsultancy, the majority of marketers aren’t even keeping up to date with the latest best practices and methods, let alone leveraging data-science solutions. Of those marketers surveyed, only…
- 30% use content personalization beyond “Hello [FIRST NAME], you’re a unique and valued customer”
- 22% use life cycle programmes
- 21% use advanced segmentation
- 20% use behavioural targeting/triggers
As the above figures demonstrate, most email marketing still depends on intuition, creative dazzle and rear-view mirror thinking — this worked last year, so let’s try it this year in a shiny new template. There are limitations to this method.
First, as will be shown below, email metrics are not the best predictor of future success and are often misleading. Second, intuition can cause you to overlook subtle but important patterns in favor of the obvious. For example, you may send an email campaign promoting women’s apparel to a segment of 25-34 year old women and achieve decent open rates of 17% and click throughs of 2%. However, within this broad category of 25-34 year old women there is probably enough variation to justify further segmentation, which could allow you to be more relevant to these people and achieve greater results both in the near and long term.
Fortunately, data science has evolved to the point where it’s now possible to understand customer behaviour far beyond one-off events like open rates, click-throughs and conversions. At Coherent Path, for example, we map and optimize customer journeys, which allows us to gently nudge those journeys towards the products that result in specific outcomes like firmer loyalty, cross-sells, higher margins or increased purchase frequency.
(To learn about the science behind Coherent Path’s predictive analytics and personalization technology, click here.)
Metrics vs. business goals
Email metrics measure one-off events — clicks, open rates, conversions and the like. Business goals refer to long term strategic imperatives. Some examples of business goals include achieving more diverse product exposure, attracting high value customers and securing customer loyalty.
While virtually everyone would like to do well in both areas, it’s important to distinguish between near-term metrics and business goals because the success of the latter can mask the health of the former. For example…
Discounts boost conversions but attract low value, disloyal customers
We conducted a study that examined the value of customers obtained through cyber monday sales. It was found that even though discounts and special offers reliably produced short-term boosts in sales, they did little to attract customers who were loyal beyond the first transaction. Customers whose first transaction involved a special offer or discount were 50% less likely to return to make a second purchase. In other words, while near-term metrics indicated success, strategic objectives were being undermined.
The above is just one example of how near-term metrics are not reliable predictors of future success. In the coming weeks, we’ll go into further detail about how you can go beyond these metrics to achieve goals that are actually important for your business.
Email metrics are sufficient for gauging near-term performance. And near-term performance is important: as a marketer your own performance is often evaluated according to such metrics. Nevertheless, effective marketing is about more than just the near-term. It’s about achieving strategic goals to ensure the health of your business in the long run. By understanding your strategic goals and knowing how to achieve them, you can design more effective campaigns that will win, engage, convert and retain customers both today and tomorrow.