Under-mailing? Over-mailing? Email Frequency, Cadence and ROI -- Jennings

Under-mailing? Over-mailing?
A Frank Discussion on Email Frequency,
Cadence and ROI
Jeanne Jennings
One of the World’s Top Email Marketing Influencers
@JeaJen

© 2014, JeanneJennings.com, Inc; All Rights Reserved
What I Promised We’d Cover
• Tools to tell whether you are over- or under-mailing
• The pros and cons of each
• How to determine the ‘perfect’ cadence and
frequency for your program
• Tips for testing whether changes will benefit your
program
• Techniques for talking to management about
frequency and cadence issues

Definitions
• Frequency: The number of times that something
happens during a particular period
• Cadence: A regular beat or rhythm
• Return-on-Investment (ROI): the most common
profitability ratio; there are several ways to calculate
• Net Revenue: Profit; gross revenue minus costs; can be
calculated with or without ‘opportunity cost’
• Over-mailing: losing money because you are sending
too frequently
• Under-mailing: leaving money on the table because
you aren’t sending frequently enough
Sources: Entrepreneur.com, Jeanne Jennings, Merriam-Webster.com

Frequency and Revenue
Send 1 time generate $200,000…
Send 10 times make $2,000,000?

Why Frequency
Matters: Reach
• Open and Click-
through Rates give
you unique
interactions for each
email effort…
Source: Client Case Study, JeanneJennings.com, Inc.

Why Frequency
Matters: Reach
• Open and Click
Reach give you
unique interactions
over multiple email
efforts during a given
period of time
• Unique clickers
increased 3x when 6
emails were sent
instead of just one
Source: Client Case Study, JeanneJennings.com, Inc.

Why Cadence Matters
•6 emails over the course of a day
•6 emails over the course of a
week
•6 emails over the course of two
months
I’ve seen all of these cadences work for clients;
The key is your content – and how quickly
subscribers want or need to absorb it

Finding the ‘Perfect’ Cadence and
Frequency
• One word: Test
• Test
• Sending one more or one less email to a test group and
see how they perform versus the control (frequency)
• Adjusting the time between sends a little or a lot to a
test group and see how they perform versus the control
(cadence)
• Do this strategically – develop a hypothesis as to
WHY the change in frequency and/or cadence will
boost response

More on Frequency and Cadence
Testing
• Define your key performance indicator(s)
• Typically revenue or another bottom line metric is the
primary
• You might also look at secondary concerns like
unsubscribes and spam complaint rates
• Weight each accordingly and develop a formula to
gauge performance

Sample Performance Formula
• Key Performance Indicator: Maximize Net Revenue
(Note: Net revenue, not ROI, more on that shortly)
• Secondary Indicators: Monitor Unsubscribes and
Spam Complaints to protect long-term value of the
list

Data Points
Annual Revenue from Email: $4,121,965
Average Annual List Size: 450,000
Average Annual Revenue per Email Address: $9.16
Then come up with a formula to calculate the opportunity
costs for secondary indicators, for instance:
• $9.16 for each unsubscribe over the internal benchmark
• $9.16 for each spam complaint
• And an additional $9.16 for each spam complaint over the
low industry benchmark for deliverability issues
Note: This is just an example – you can develop your own
formula based on your own average annual revenue or any
other metric

Opportunity Cost Calculations
Spam Complaints 9.16$ 9.16$
# Rate Rate #
1 0 0.00% 0.10% 456 - NA -$
2 3 0.00% 0.10% 444 3 NA 27$
3 44 0.01% 0.10% 440 44 NA 403$
4 97 0.02% 0.10% 443 129 NA 1,182$
5 131 0.03% 0.10% 438 131 NA 1,200$
6 565 0.13% 0.10% 434 565 130 6,369$
Unsubscribes 9.16$
# Rate Rate #
1 911 0.20% 0.25% 1,139 NA 0
2 1,066 0.24% 0.25% 1,111 NA 0
3 1,319 0.30% 0.25% 1,099 220 2,013.90$
4 1,641 0.37% 0.25% 1,109 532 4,874.18$
5 1,708 0.39% 0.25% 1,095 613 5,615.28$
6 1,781 0.41% 0.25% 1,086 695 6,366.00$
Opportunity
Cost
Opportunity
Cost
Over
Benchmark
Actual Unsubs Internal Benchmark Over
Benchmark
Actual Complaints Industry Benchmark
Total

Overall Performance Based on Two Cost
Models (without and with opportunity costs)
Marketing,
Etc.
Merchandise
Sold Sub-total
1 170,887$ 5,262$ 88,861$ 94,123$ 76,764$ 76,764$ 1.82$
2 93,296$ 5,251$ 48,514$ 53,766$ 39,531$ 116,294$ 1.79$
3 38,475$ 5,241$ 20,007$ 25,248$ 13,227$ 129,522$ 1.75$
4 11,640$ 4,743$ 6,053$ 10,795$ 845$ 130,366$ 1.71$
5 9,852$ 4,734$ 5,123$ 9,857$ (5)$ 130,362$ 1.67$
6 2,172$ 4,727$ 1,129$ 5,856$ (3,684)$ 126,678$ 1.63$
Unsubscribes
Spam
Complaints Sub-total
1 - -$ -$ 94,123$ 76,764$ 76,764$ 1.82$
2 - 27$ 27$ 53,793$ 39,503$ 116,267$ 1.79$
3 2,014 403$ 2,417$ 27,665$ 10,810$ 127,077$ 1.72$
4 4,874 1,182$ 6,056$ 16,851$ (5,211)$ 121,866$ 1.63$
5 5,615 1,200$ 6,815$ 16,672$ (6,820)$ 115,046$ 1.55$
6 6,366 6,369$ 12,735$ 18,591$ (16,419)$ 98,627$ 1.43$
Email
Effort
Email
Effort
Gross
Revenue
Net
Revenue 1
Actual Costs
Opportunity Costs
Net
Revenue 2
Total Actual and
Opportunity
Costs
Cumulative
ROI 1
Cumulative
ROI 2
Cumulative
Net Revenue
1
Cumulative
Net Revenue
2

So what does this tell us?
• That if you are looking at just actual costs, this program
is optimized after the fourth send
• Sends 5 and 6 decrease your net revenue
• If you are looking at actual as well as opportunity costs,
then your program is optimized after the third send
• Sends 4, 5 and 6 decrease your net revenue
• This is a very simple model based on sending a series of
emails that are part of a single campaign, but the
analysis can be used for the bigger picture as well
• But remember – content plays a role…

Don’t Forget Content
• Content has a huge impact on frequency and can
also impact cadence
• In general, content that provides value without a
purchase (“editorial”) is more welcome in the inbox –
you can typically send at a higher frequency
• Read: Email Newsletters (may also contain promotions)
• Content that is strictly promotional is usually less
welcome in the inbox – you can typically send at a lower
frequency
• Change the content significantly and you need to
start testing for optimal frequency and cadence all
over again…

Talking to Management
• Data speaks volumes
• Do the testing and quantify your results
• Make your case to management based on the facts
and the numbers
• This works whether you’re advocating for higher or
lower frequency, or any change in cadence
• Don’t shortcut – while outside factors may
influence what you test, your competitor’s
frequency and cadence may not be optimal for you!

All This Said, in Truth…
• There’s no ‘one size fits all’ frequency and cadence
for everyone on your list
• When we start looking at segments, we find that
some people are happier and more profitable at a
higher frequency…
• While others are happier and more profitable at a
lower frequency
• So you should be looking to send to each individual
at the frequency and cadence that’s optimal for
them…

Under-mailing? Over-mailing?
A Frank Discussion on Email Frequency,
Cadence and ROI
Thanks for attending! Questions?
Jeanne Jennings
One of the World’s Top Email Marketing Influencers
@JeaJen
Phone: 202.365.0423
Email: JJ@JeanneJennings.com
Blog and Email Newsletter: www.JeanneJennings.com

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