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6 Secrets to Unlocking Email Marketing ROI
 

6 Secrets to Unlocking Email Marketing ROI

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    6 Secrets to Unlocking Email Marketing ROI 6 Secrets to Unlocking Email Marketing ROI Document Transcript

    • Whitepaper FEBRUARY 2012Best practices in email marketing6 secrets to Unlockingemail marketing roi© Mailigen Ltd. All rights reserved 02/2012. Mailigen Email Marketing Solutions
    • 6 SecretS to Unlocking email marketing roi 2All successful marketing campaigns are based on numbers. ALL. This is a common mistake for novice marketers. Assessing the ROI foremail marketing starts with understanding all marketing campaigns must ultimately deliver on reinforcing your sales strategy and busi-ness objectives. Email marketing is no different. Email is part of everyday business now, and email marketing is a critical tool for deliveringmarketing objectives.So what is email marketing ROI? ROI is a measure of investment profitability; a percentage return basedon investment not a measure of the investment size. Email marketing ROI is the same, a percentagereturn based on your investment in creating and managing email marketing campaigns. Accordingto MarketingSherpa B2C marketers report an average 256% ROI from the email marketing chan-nel — pulling in $256 for every $1 invested. You can generate significant ROI in your marketingefforts through email campaigns. Using our simple calculations you can easily see the returnon investment from your email campaigns, based on your expected costs and response lev-els.Get the most our of your email campaigns with our 6 best practices to establishing aneffective method for quantifying email marketing ROI. list: 1. planning 2. Using third party tools 3. assessing the VariaBles 4. calcUlating roi 5. increasing roi 6. comparing resUlts© mailigen ltd. all rights reserved 02/2012. mailigen email marketing Solutions Phone: (+1) 718 303 1864
    • 6 SecretS to Unlocking email marketing roi 31. planningWhen planning email marketing campaigns, it is important to carefully think through how you are going to measure your progressand how you will know if your email campaign is moving the needle closer to achieving your goals. The challenge in measuring emailmarketing ROI is in connecting the result to the goal and associating the costs involved. When optimized, email marketing outperformsmost marketing tools with higher ROI. According to research conducted by the Direct Marketing Association, email marketing was ex-pected to generate an ROI of $42.08 for every dollar spent on it in 2010 and 72% of respondents to an Econsultancy survey in early 2011described email’s ROI as excellent or good. Only organic SEO scored better in their survey.Planning is the key to seeing high returns from your campaigns.In planning your email campaigns, take these factors into con-sideration for a high ROI outcome: Craft a clear message with one call to action Use a clean, permission based email list Leverage your list segments for a highly targeted audience For an extensive guide to planning your email Create great content with a strong subject line marketing campaigns use our Framework: Test the message before you send it out Email Marketing Planning Guide2. Using third party toolsYou can use reports and tracking tools to better understand your campaign income and how you are spending your budget. Becauseemail campaigns attract visitors to your site, you can use Google Analytics to tag email campaigns with campaign tags to track how welleach email performs. Campaign tags are available through the Mailigen solution to automatically add information to apply campaigntags to links within the email. When clicked, the tag passes information to Google Analytics and you can analyze the performance of eachemail link. This allows you to optimize your campaign and track your ROI. Google Analytics offers several important capabilities you canuse to increase your email performance.Advanced Segmentation: Google Analytics provides precision “funnels” to design a path you expect visitors to take on theirtools to analyze specific data elements and gain a deeper un- journey toward converting to the goal. Funnels in an ecom-derstanding of your customer. All advanced segment templates merce goal can include landing pages for the checkout process,are associated with visits data and Google Analytics offers out or funneling a customer to your newsletter sign up form.of the box segmentation or customized segmentation. In cus- eCommerce: Google Analytics collects two categories of e-tomizing your segments start by thinking about the segment commerce data: transaction data and item data. The transactionthat you want to design and what kind of visits it will include. data identifies the elements of the overall transaction. The itemYou can identify the appropriate dimensions or metrics for your data specifies the items purchased in the transaction. This datasegment. For example, if you only want to see visits with two or compiles into Google Analytics reports. Using the data elementsmore unique purchases in your reports, you would choose the available, you can vastly increase your segmentation and tailor‘Unique Purchases’ metric. Use the advanced segmentation fea- your email marketing messages based on the preferences of theture to identify key trends and behaviors to anticipate and reactto your customers.Goals: Goals are a page view - serving as conversions for your Learn more about Google Analytics tips for trackingsite, like a thank you page. Goals can be used to track newslet- email marketing campaignster signups, email list subscriptions and contact forms. Goals use© mailigen ltd. all rights reserved 02/2012. mailigen email marketing Solutions Phone: (+1) 718 303 1864
    • 6 SecretS to Unlocking email marketing roi 43. assessing the VariaBles Each of these variables tells you something about how much your email campaigns are costing you and will enable you toROI cannot be judged solely by performance clickthrough and calculate your ROI. If this is your first email marketing campaign,conversion rates. For Marketing ROI, you need to determine use it to obtain a baseline of these figures. Building your baselinewhat you view as the “return” in the equation. Is it total revenue will give you insight to how you are trending and improvementgenerated, profit, new Fans, coupon redemption? opportunities.To prepare for calculating the ROI, there are several importantvariables to gather and define as they relate to your businessmodel: 4. calcUlating roi Creative development costs (templates, images) There are several third party tools on the market to calculate complex ROI equations using the variables we have suggested. Email Service Provider costs However, here are some simple calculations we recommend: Campaign management time Return on Investment: Net revenue / costAlso, you may need to gather email specific variable data: Return on Investment: Gross Profit-Marketing Investment/Marketing Investment # of contacts Revenue per email sent: Net revenue / # of emails sent Average cost per contact Customer Lifetime Value: CLV-Marketing # of Responders Investment/Marketing Investment # of Buyers Revenue Generated Customer Lifetime Value is a measure of the profit generated Profit by a single customer or segment of customers over the lifetime of their engagement with your company. Using this equation Cost per Responder will help determine customer segments and how you position Cost per Buyer offers to each segment. Since ROI is usually expressed as a per- Campaign Audience Size centage, for each of these equations multiply the result by 100. Campaign Cost Any of these simple calculations will track the campaign level Response Rate (what % do you expect measures to reveal which campaigns brought an increase in based on prior performance) sales rather than clicks. Conversion Rate (what % of responders will buy based on prior performance) Average Buyer Purchase Amount (How much will buyers spend based on prior performance)
    • 6 SecretS to Unlocking email marketing roi 55. increasing roi 6. comparing yoUr resUltsOnce you have assed the variable factors contributing to the Email is a huge part of interactive marketing and is very valuableoverall ROI, you should be able to glean information related to compared to its more expensive marketing tools. Want to knowincreasing the ROI of your campaigns. Use this 10 step checklist how much ROI campaigns are generating for others? Comparingtoward increasing ROI: your results to industry best practices and averages will give you more insight to your campaign performance. Review industry Review your analytics performance on email conversions, revenue conversions, land- Integrate (or review) Google Analytics to track conversions ing page conversions, retention and email marketing costs. The Compare campaigns and levels of success emailstatcenter.com is an authority on email marketing metrics and a valuable resource for campaign comparisons. Through this Optimize list segmentation site and others, you can research important comparisons such Consider customer re-engagement campaigns as the average revenue per delivered message. Thoughtful com- Test new approaches parisons will provide a benchmark for your current ROI vs. your Test subject lines and call to action goal return for future campaigns. Use more automation capability Test email designs in different email clients and devicesEmail marketing is a great way to increase your brand awareness,engage with customers, and remain top of mind. To ensure thatthe ROI on your marketing campaigns is high the more informa-tion you can gain from your customers, the better. Segmentingcan be highly beneficial when setting up your campaigns andboosting your ROI.As with any ongoing calculation, obtaining as many metricsand statistics as possible can help you see where opportunitiesand faults may lie. If you’re making changes to try to affect yourROI, ensure that you have a baseline to work off of. Try differentavenues to see what your audience responds to, and your ROIshould replicate those trends. Once you find a winning formula,don’t placate – things change, and you must always be willingto innovate.For more information on boosting your email marketing ROI,visit the Mailigen Resource Center. SUMMARY So why should you calculate email marketing ROI? Because all successful marketing campaigns are based on numbers. ALL. And your marketing campaigns need funding to implement. By clearly attributing revenue to email ROI, calculating the ROI will convince executives and you of the efficiency and cost benefits of delivering marketing through email campaigns. Mailigen has the easy to use tools you need to generate action with powerful email messages and newsletters and robust analytics for measuring your ROI. If you want to learn more about Mailigen, take it for a test drive before choosing your email marketing solution, we offer a 30 day free trial!© mailigen ltd. all rights reserved 02/2012. mailigen email marketing Solutions Phone: (+1) 718 303 1864