Direct Marketing, Mail Order, and E-commerce News from the National Mail Order Association
The ROI Evolution of Email Marketing
by Steven Roe
Where we’ve been:
In the last decade, marketers have been easily distracted by all the “next big things,” and many have unfortunately lost their way and missed the big picture. While many marketers have been focused on building second life islands and designing applications for Facebook and Web 2.0, they have turned a blind eye to truly maximizing their organization’s value by optimizing their main vehicle of electronic communications. Yes, I am talking about email marketing.
When done right, it still delivers superior, measurable ROI. Unfortunately, many marketers have become complacent while totally forgetting about measurability metrics and most importantly, ROI. Now that the economic times have turned the pressure cooker to high, it’s time to get back to what works.
Almost every company without exception that has even dipped a toe in the water of email marketing has come to the conclusion that it works. When over 3,000 Fortune 1000 marketers and top agencies were asked “which advertising channels perform strongly for your company”, over 80.4% chose email. That is nearly 25 percentage points above the next best channel (Datran Media 2009 survey results). If you happen to be one of the few marketers that thinks email marketing does not or could not work for you organization, you may want to consider a new profession.
Where we are:
The bigger issue keeping email marketing from truly soaring through the stratosphere is that many marketers are under the illusion that their current email programs are great, even when they may be deplorable. Keep in mind that even the worst email programs (those with no real goal, strategy, or clickable calls to actions and terrible rendering) still drive results. What most marketers don’t realize is how much more they could be getting out of their email programs. If they allocated even half the attention and budget to email as it deserves, then results would improve exponentially.
As an analogy, email is like the step-child that gets straight A’s and is reliable, but gets no love from its parents. In fact, it seems to sit in time out (i.e. no time or budget allocated to it) for extended periods of time. Eventually this pattern will stifle the stepchild’s potential. Conversely, the child that is failing algebra and has completely unpredictable behavior gets rewarded with a shiny new toy and a higher allowance; thereby reinforcing bad behaviors. It’s like throwing good money after bad, or at least, not allocating it to the best risk/reward opportunity. Email marketing is consistent and reliable (and no, I don’t have red hair) and should be at the top of the allocation list when reviewing marketing budgets due to its high ROI for almost any type of business or industry.
One of the common threads that is consistent in almost all successful email marketing programs is that the marketers that run them are never satisfied with their results. This is true despite the fact that many of them have dramatically higher response rates than industry averages. Like anything else, the marketers with the highest intellectual curiosity and drive to outdo themselves usually succeed.
The bottom line is that the successful marketers have realized that marketing is no longer a monologue, it’s a dialogue. Email marketing is one of the only channels where someone has asked to hear from you. In this world of impatience, email marketing provides the ability to appropriately react to every action that an email recipient makes. Furthermore, email marketing provides real-time results that allow you to test and refine your message. By continually analyzing response data and importantly which message within the email got the best reception, you can customize and increase the effectiveness of your messaging through user behavior segmentation and targeting.
Where we need to go:
The best returns are from multifaceted, comprehensive digital targeted messaging strategies, guided by your organization’s core business goals. Rather than get bogged down focusing on basic open rates (a very contrived measurement), email should take a more analytical approach in delivering value. By reviewing the data, you should be able to tell exactly how much your email marketing program is worth (yes, in dollars and cents), the value of each subscriber, and the return on investment per campaign. After analyzing this information, you can continue to refine your message and strategies to insure your efforts are in lockstep with your overall business goals and objectives.
To take the ROI potential of email marketing to the next level, we need to go beyond the inbox. There is no harm in giving your customers/prospects multiple options to have a meaningful dialogue with your organization. Social networking, text messaging and even voice messaging are all great ways to further enhance a digital conversation (and therefore the ROI!) with your customers/prospects once an email dialogue has been established.
The concept here is simple. Now that everyone has jumped on the email marketing bandwagon with little regard for best practices, the inbox is now a very competitive and crowded place to have a lengthy dialogue. It is now more important than ever to go the extra mile and rise above the noise. By developing an intelligent digital communications strategy, you can set yourself apart from all the other clutter and expand the conversation to other channels that each has its own supporting attributes.
While there are a lot of great ways to effectively interact with your customers/prospects, email should continue to be a central focus due to its universal acceptance, advanced tracking capabilities, unlimited potential, and high ROI.
Steven Roe is Director Of Business Development at BrightWave Marketing
BrightWave Marketing is an award-winning agency specializing in the strategic optimization of email marketing and digital targeted messaging programs. BrightWave Marketing focuses on creating and managing exceptional digital messaging programs that drive revenue, cut costs and build relationships. Headquartered in Atlanta, GA, BrightWave Marketing has done work for a blue chip client roster including CVS, Chick-fil-A, Lowe's, Sports Illustrated as well as leading advertising and marketing firms.
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