B2B Email Marketing Effectiveness Benchmarking Report

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Research conducted earlier this year by Demand Metric confirmed that email is still the most favored marketing channel for businesses. Even with the growing popularity of social media, email remains …

Research conducted earlier this year by Demand Metric confirmed that email is still the most favored marketing channel for businesses. Even with the growing popularity of social media, email remains at the top of the heap.

This report details results from the Demand Metric study on B2B email marketing effectiveness, whose goal was to understand how effective email is as a marketing channel, and specifically to understand the impact of multiple factors known to negatively impact email marketing effectiveness.

To obtain this document, visit us at http://www.demandmetric.com/register

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  • 1. B2B Email Marketing Effectiveness Benchmarks, Insights & Advice Navigating the Minefield to Inbox Placement © 2013 Demand Metric Research Corporation. All Rights Reserved.   Sponsored By: Benchmarking Report  
  • 2. TABLE OF CONTENTS 3 4 5 6 9 11 Introduction Executive Summary Research Methodology Email Marketing Landscape Email Performance The Email Marketing Minefield 20 21 22 Analyst Bottom Line Acknowledgements About Demand Metric 16 18 Email List Maintenance Email Reputation
  • 3. INTRODUCTION Research conducted earlier this year by Demand Metric confirmed that email is still the most favored marketing channel for businesses. Even with the growing popularity of social media, email remains at the top of the heap. Does email remain popular, email effectiveness in B2B environments and measure the impact of forces working against it. This report details results from the Demand Metric study on B2B email marketing effectiveness, whose goal was to understand how effective email is as a marketing channel, specifically to understand the impact of each of these factors known to negatively impact email marketing effectiveness: Catch-all email addresses. These are addresses set up on a mail server to catch email sent to any address at that domain, whether the address is actually associated with a real person or not. The purpose of a catch-all address is to prevent email message was delivered, when in fact it sits in a catch-all inbox which is rarely, if ever, checked by a human. Expired or invalid email addresses. Quite simply, these are emails that may have once been valid, but are no longer, often due to employee retirement or departure. High-risk email addresses. These are email addresses of individuals who have previously opted-out of other email campaigns, not necessarily yours, or they have reported email as spam. Including these individuals in your email database poses risk for your email marketing effectiveness. Thank you to all those who participated in the survey. We really appreciate your input! Jerry Rackley, Chief Analyst Demand Metric
  • 4. EXECUTIVE SUMMARY A survey was used to collect the data for this study, and its analysis provides these key findings: Email However, only 28 percent of survey respondents report that their email marketing or lead generation efforts are becoming more effective. A participants (61 percent) reported average email open rates of below 15 percent. By comparison, the - average email open rate of 19.7 percent. Participants from different industries reported significant variation of open rates, with Financial Services doing the worst (71 percent reporting an open rate of 15 percent or less) and Manufacturing doing the best (54 percent reporting an open rate of 15 percent or less). Ignorance abounds with respect to understanding of the impact of catch-all, invalid and high-risk email addresses. Thirty six - -risk emails addresses that are in their databases. A majority of marketers (62 percent) in this study do not know what their digital reputation is as an email sender, as measured by Sender Score (www.senderscore.org). Of those who claim to know, they have a dramatically inflated view of it, with merely three percent reporting a Sender Score of 70 or lower, compared to a recent Sender Score rolling average of 38.3. This is despite the fact that it takes only minutes to obtain a Sender Score online, and it is free. This report details the results and insights from the analysis of the study data.
  • 5. RESEARCH METHODOLOGY The Demand Metric B2B Email Marketing Effectiveness Survey was administered online over a period of July 5th through July 16th, 2013. During this period, over 530 responses were collected, 478 of which were complete and not duplicates and were therefore included in the analysis. All members of the Demand Metric community received email invitations to participate in the survey, and participation was encouraged through a random draw incentive for an iPad Mini. While respondent email addresses were collected in order to facilitate the prize drawing, no identifying information was considered in the analysis of the survey data. Summarized below is the basic information that was collected about survey respondents to enable filtering and analysis of data: Number of Employees: Zero to 25 (48%) 26 to 100 (13%) 101 to 250 (12%) 251 to 1,000 (11%) 1,001 to 10,000 (12%) Over 10,000 (4%) Type of Organization: B2B (64%) Both B2B and B2C (30%) B2C (6%) 5
  • 6. EMAIL MARKETING LANDSCAPE A recent Demand Metric study identified email as the top marketing channel for the organizations surveyed. This B2B email study took a slightly different approach in trying to understand the email marketing landscape with the question: Which of the following statements best describes as a marketing or lead generation tool Most organizations 91 percent in this survey continue to market using email. Of generation, they are primarily small companies, 12 percent of which reported not using it, compared to only three percent of large companies.     6 9% 26% 42% 23% 0% 10% 20% 30% 40% 50% Do not use Rarely use Regularly use Constantly use Email use for Marketing or Lead Generation
  • 7. This understanding of email usage begs a more important question: how well is it working? To find out, the survey asked: Which of the following statements best describes the effectiveness of your email marketing or lead generation efforts An almost equal number of survey respondents feel that email effectiveness is declining as improving, with the Reviewing this effectiveness data by company size reveals that there is no relationship between how effective email is and the size of the company using it for marketing or lead generation. In other words, company size does not influence the perception of how well or how poorly email is performing. The relationship that does exist is a linear one between effectiveness and use: the more a company reported that it uses email for marketing or lead generation, the more likely it is to also report that it is effective. EMAIL MARKETING LANDSCAPE - EFFECTIVENESS 6% 19% 47% 22% 6% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Declining significantly Declining slightly Holding steady Improving slightly Improving significantly Email Marketing or Lead Generation Effectiveness
  • 8. EMAIL MARKETING LANDSCAPE SYSTEMS The email landscape with respect to the systems in use to send bulk email is diverse: Internal, server-based solutions lead the way, followed by a combination of marketing automation, CRM and dedicated email marketing systems. Finally, company size is related to the number of surprisingly, smaller companies maintain and use smaller databases, and larger companies have larger ones. 8 107 96 45 44 29 22 18 15 7 6 6 5 5 3 3 3 96 0 10 20 30 40 50 60 70 80 90 100 110 120 Bulk Email Systems in Use
  • 9. EMAIL PERFORMANCE OPEN RATES There are a number of indicators that help email marketers understand how any given email has performed. Study: An Analysis of Messages Sent Q1- reported that the average open rate in 2012 was 19.7 percent, with top performing companies enjoying an open rate almost twice the average. In this study, the pessimistic: 61 percent of companies are reporting open rates well below this average. Open rates vary by industry. For the top six industries in this study, the open rates were reported as follows: Financial Services 71% Education 70% Software/Tech 66% Professional Services 58% Media & Publishing 58% Manufacturing 54% 9 17% 23% 21% 15% 12% 12% 5% or less 6 to 10% 11 to 15% 16 to 20% 21 to 25% More than 25% 0% 5% 10% 15% 20% 25% Email Open Rate