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The Email Research Center

Email Marketing Research

Email Marketing Research
The latest email marketing research, stats
and strategy from Morgan Stewart, ExactTarget’s
Director of Research & Strategy
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Julie Katz and Stefan Tornquist at Connections... Survey Says!

Tuesday, June 30, 2009 by Morgan Stewart
ExactTarget is in full swing preparing for Connections 09. If Malcolm Gladwell, Marlee Matlin, They Might Be Giants, and Second City aren't enough, then how about a panel aimed at sorting through reams of email marketing research? (Okay, that may be a bit of a stretch.)

This week I have received confirmation from two of the industries most trusted experts on email marketing that they will be participating in the "Survey Says!" breakout session on Day 2. Stefan Tornquist from Marketing Sherpa and Julie Katz from Forrester will join me Wednesday October 14th with one goal--extracting the research insights that matter most when developing your 1 to 1 marketing plans!

If you haven't signed up for this event yet, register before July 10th to get a $200 discount.

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Mobile Email Update

Tuesday, June 30, 2009 by Morgan Stewart
Last week I spoke to Mark Browlow of Email Marketing Reports with some brief updates on the state of mobile email. This entry provides a good collection of practical advice on handling the challenges he presented a week earlier.

Taking a look at the posts should provide a good overview of the challenges and the best solutions available. Unfortunately, these solutions are still largely unsatisfying. In 2007, ExactTarget wrote Email Marketing for the Third Screen. In that whitepaper we outlined how the total lack of standards in how mobile devices handle email make it difficult to optimize email across these devices. However, all hope should not be lost since the vast majority of consumers are not looking at your email on their mobile device anyway.

Since Mark already alluded to an update in his post (with permission), I wanted to provide a little more concrete insight into what the new data says--and what it does not say. What it does not say is that things have changed much in the two years since we wrote Email Marketing for the Third Screen. That paper is still very much up to date. I imagine this is a surprise to you, I know it was for me too.

The same rendering challenges plague the mobile email landscape. While marketers seem to care a lot, consumers still don't. Consumers still access the same email account on their desktop or laptop that they access on their mobile device. They still flag commercial email on their mobile device so they can follow-up on their computers where a full keyboard, rich internet experience and full size screen make it easier to transact online. Their mindset when interacting with mobile email is still distinct from their mindset when reading their email on a normal computer. They are looking for urgent messages from friends, family, and co-workers--they aren't looking for deals. They tend to wait until they get home (or to work) to their computers and read commercial messages there.

There is one exception. iPhone users. To get a sense of this, take a look at the latest research from Crowd Science on their smartphone usage and brand study. They compare the satisfaction of iPhone users with Blackberry users. It's simply not a competition. If you weren't already convinced that iPhone ushered in a new era for smartphones, the Crowd Science data should remove all doubt.



As you consider the "mobile email problem", look at Mark's post and do what you can to follow the advice on his blog. Simply keep in mind that given the choice between optimizing for a mobile device and optimizing for standard email clients on a desktop or laptop, pick the standard clients--iPhone can handle it and that is where the rest of your email subscribers are most likely looking anyway.

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Catapulters Hitting the Streets

Tuesday, June 30, 2009 by Morgan Stewart
This years Catapult team is on the road. The group of 12 has been sent to cities around the midwest in search of video magic. Broken into three teams of four people each, Catapulters will be conducting interviews on the street to get at the heart of what subscribers want to hear from marketers. In years past, these street interviews were an independent project. This year, the interviews are being coordinated with the 2009 Channel Preferences Survey which addresses key topics related to email marketing, social media, and text messaging.

Last year's 2008 Channel Preferences Survey was the basis for several whitepapers including the 2008 Channel Preferences Whitepaper, and Messaging Behaviors, Preferences, and Personnas. This year, with the help of the Catapult team, we are adding a video component to the research project that should be both entertaining and informative.

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Quality Co-Registration Drives Subscriptions Honestly

Friday, June 19, 2009 by Morgan Stewart
Following my recent post Email List Growth: Stay Away from the Dark Side, I would be remise if I didn’t highlight ways co-registration can be a respectful service offered to potential subscribers. The Free IQ Test example represents the worst practices. I spoke to some friends at Prospectiv to ask them for an example of how to do co-reg right. Take notice of how different this process is.

First, this process starts during registration on the Game Show Network’s website. This is the first big difference--this site was not created simply for the purpose of harvesting email addresses. The site has a value proposition of it’s own. In this case, the publisher (GSN) has elected to drive additional advertising revenue by partnering with a co-registration partner (Prospectiv).



Once I complete my subscription, I am lead to another page offering me the opportunity to take advantage of an offer from one of GSN’s advertisers. This is a simple question and a single form. “Do you want to get this offer from 1-800-PetMeds”. There is no punishment if I were to click, “No, Thanks” – I would still get the benefits I originally wanted from registering with GSN.



After this form, guess what happens? I get a thank you page! No trap, no gimmicks. No requirement to register in order to get the thing I really wanted in the first place. (Remember in the Free IQ Test example, I had already invested 20 minutes in taking the test. In order to get my score I was compelled to register for things I was not interest).



There are two main approaches to co-registration:

First is co-registration that makes subscription a requirement to get something. These vendors put your add before delivering the value proposition promised by the site. This is a trap for consumers and it will only deliver you bad email addresses from angry consumers.

Second is co-registration that offers the opportunity to take advantage of additional deals after the main value proposition has already been delivered. True, some consumers may be annoyed by that, but it is still the consumers choice to take advantage of the offer or to say, “No, thanks”. The subscribers you get through this process are much more likely to stay engaged with your program over the long haul.

The key to success in co-registration is to understand how your brands offers will be presented.

Here are a few questions to ask yourself when evaluating co-reg vendors:
  1. Will my offer be placed before or after the value proposition is delivered?
  2. Is the offer being placed on a site that has intrinsic value? Or is the site simply a gimmick for generating leads or subscriptions (like the IQ Test)?
  3. How many offers will be shown along with my offer?
  4. Will the co-reg company later sell names collected to other 3rd parties, thus devaluing the value of the email address they give me even more?

In short, do they respect permission and privacy?

Unfortunately, I must say add this last piece. Don’t take the vendors word for it. There are a few honest vendors out there, but there are just as many (if not more) dishonest vendors. Check the processes yourself. Look at every site that your offers will be displayed on and walk through the process yourself. Ask for references from other brands that you would like to emulate. If the only references are from companies you have never heard of or think do a poor job, then ask for more. Don't sign big upfront contracts, instead, start with a trial at a small fixed budget and then expand the scope if the trial is successful.

If the co-registration or lead gen company can’t, or won't, provide these things… then RUN, you are about to get burned. 
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Email List Growth: Stay Away from the Dark Side

Thursday, June 18, 2009 by Morgan Stewart
Building your email list can be a real challenge. In our recent List Growth Study we evaluated 18 different tactics for building email lists. Among the tactics evaluated was co-registration. Among non-organic list growth tactics (tactics that involve the marketer going out to find subscribers as opposed to organic tactics which capture information from consumers who have initiated contact with your site, call center, store, etc) co-registration faired well.

Unfortunately, co-registration is a catch all phrase for anything that involves soliciting potential subscribers on a website other than your own. As such, it may be one of the more loaded terms in email marketing.

I recently came across this great example of how NOT to do co-registration. From this example believe you will agree that the process only benefits one party—the vendor running the program (in this case a company called JoeTec Networks Inc.) Everyone else loses. Customers lose and brands lose.

It all started with a free IQ Test.



They are up front about being an advertising supported site. In fact, in the fine print of the site states “To get your IQ Results you will be required to sign up to our site and view some of our advertisers promotions. You are not required to signup for or buy any of our advertiser's products.”

They are even more transparent in their privacy policy. Here are a couple selections from that page:

Solicited Email:
Company only sends email to individuals who have agreed on the Websites to receive email from Company or to individuals who have agreed on third party websites to receive email from third parties such as Company. Company does not send unsolicited email messages. As a result, statutes requiring certain formatting for unsolicited email are not applicable to Company's email messages.

Third Party Email:
When you fill out one of our forms, you are consenting to receive e-mail that informs you about new merchandise, sales, special discounts and promotions from us and our trusted 3rd party partners. If you wish to discontinue receiving these emails you will need to click the opt-out hyperlink at the bottom of the email.

JoeTec MAY sell or transfer individual information to trusted third parties for any legaly permissible purpose at its sole discretion.

In essence, once you give them your email on any form, you’re inbox is toast. This is the perfect example of where visitors would do well to read the privacy policy. Assuming they understand what they are actually signing up for, I cannot imagine many would continue at this point. Fortunately, I have an unlimited number of junk mail addresses that I can use for this type of research on email marketing. And so I continued to take the test.
 
Once complete, the forms started. Remember the promise on the first page “You are not required to signup for or buy any of our advertiser's products.” Well it is not true if you actually want to get the results. As you can see, I tried to select no to all of the offers presented to me and I was informed this was not allowed.



So, I completed it and got this form…

 

Many of these are notable brands. Worse still, some of those brands had their own forms requiring me to sign up for their deals or else the process would terminate and I wouldn’t get my test scores.

 

After no less than 15 pages with multiple offers and another 15 or so forms from specific companies, I finally got my IQ Test score. Apparently my willingness to submit myself to this abuse made me dumber. The score I got was a full 40 points lower than any other score I have ever received on an IQ or similar test.

But now for the consequences. In the two months that have passed since I ran this little experiment, that mailbox has received over 400 email messages. That is 200 a month, or an average of about 7 email messages per day.

A few smart brands have only sent one email to that address asking me to confirm my subscription. I received approximately 20 of these in the first week and I did not respond to any of them. Why? Not because I wasn’t interested, but because I was overwhelmed.

A few other brands continue to send email to that address. They are now on my “do not do business with” list. If companies can’t pay attention to the company they keep, then I don’t want to do business with them.

Don’t play with your companies reputation. If you are going to try co-registration (or any other non-organic list growth tactic), you need to work with experienced and reputable providers that understand the principles of true permission.
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Effective List Growth Webinar

Tuesday, June 9, 2009 by Morgan Stewart
Tamara Gielen, founder of the Email Marketers' Club, and I will be presenting highlights from the 2009 List Growth Study in an upcoming webinar Effective List Growth: Insights from the 2009 List Growth Study. If you have already downloaded the whitepaper, you know that it is full of charts and analysis of current trends in email list growth. Believe it or not, less than one half of the charts we created from the study made it into the final whitepaper.

During the webinar, we will provide actionable strategies, examples, and tips for growing and nurturing your most precious asset--your subscriber database! We'll also have a time for Q&A. If you have a question you would like to submit in advance, leave a comment or send me an email at mstewart(at)exacttarget(dot)com.

Register here!

Details

When:
Tuesday, June 23, 2009 2:00 pm EST

Presenters:
     Tamara Gielen, Founder, Email Marketers' Club
     Morgan Stewart, Director of Research, ExactTarget

Duration:
     1 hour

Description:
Join ExactTarget’s Morgan Stewart and Tamara Gielen, founder of the Email Marketer’s Club, as they present highlights from the 2009 Email List Growth Study whitepaper. Get the inside scoop on developing a successful list growth strategy with examples and insights from experienced B2B and B2C marketers. You’ll learn:

  • Keys to developing a sustainable list growth strategy
  • How to find the right subscribers for your list
  • The hot new tactics you should consider trying in 2009
  • What both B2B and B2C email marketers around the world consider the best list growth strategies
  • Which list growth tactics you should approach with caution

If you’re ready to create a successful, compliant, ROI-producing list growth strategy, be sure to attend this information-packed webinar. Sign up today!
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How would college students target their peers?

Monday, June 8, 2009 by Morgan Stewart
Seems that everyone is talking about how to target college students these days. No doubt it is a challenging demographic for those of us who have been around a while. And since these digital natives tend to be early adopters of technology and like socializing via the internet, it seems only logical to us 'old guys' that the best way of reaching this target demographic is through the internet, right?

As Katie Lindahl pointed out earlier this week, Gen Y folks are "tired of fifty-year olds standing in front of a group of us and telling us what we want." Ouch! Fortunately, Katie and I had already been thinking about this.

Last month, finals for the Advanced Media Planning class at Ball State University were held in the ExactTarget office. Their final was to present a detailed media plan to help launch an online brand specifically targeted to college students. A real ExactTarget client provided very detailed specifics about what the brand was, it's intent, current challenges, and a budget to help drive awareness. The final presentation was made to ExactTarget executives, executives from the client, and the students' professor. (Much more intimidating than any final I took in college!)

Setting the Stage

Students provided their assessment of the target demographic. On one hand, they were providing statistics from research they found describing the college student target. On the other, they ARE the demographic being described. In essence, this acted as a selection criterion of it's own. The stats they cited seemed legitimate to them, and so, I give the stats they selected some extra credence.


Here are some of the stats they provided:

  • 98% use mobile devices
  • 70% own a laptop
  • Multi-tasking between media is common
  • High Social Media Interaction
  • Heavy convenience oriented media usage
  • Early adopters of new technology
  • Emphasis on personalized technology and media
  • Growing preference for web connected technology
  • Spends a lot of time socializing via internet

Top 10 websites among college students in 2008:

  1. Facebook
  2. Google
  3. Yahoo!
  4. MySpace
  5. YouTube
  6. LiveJournal
  7. ESPN
  8. eBay
  9. Amazon
  10. CNN

Last, the students reiterated that this target is not terribly receptive to online advertising. The keys to grabbing their attention: relevance, providing useful information, entertainment, and exclusivity. (Does this really sound unique to college students? Hmmm.)

Breaking through the Clutter

Until this point, most of us in the room were simply taking in information, but when it came time to hear how these students would develop media plans, those of us in the audience leaned forward on the edge of our chairs. I, for one, was impressed. Here are a few of the things I heard:

  • “College students want to be taken seriously as consumers and future employees, out with the hip looking graphics and logos, in with creative that recognizes their intelligence and value.”
  • “Unless you sell beer or swimwear, don’t advertise at Spring Break, we are on vacation”
  • “Have a good website where college students can go to learn more about you. Have a Facebook page so they can check you out. But don’t expect these things to be a draw, you still need to get them there by driving brand awareness!”
  • “College newspapers are an effective and cost efficient way to reach our target market.”

College newspapers? Really? Doesn’t this fly in the face of everything we have heard about this demographic? Maybe it does, but the more I pressed, the more I was convinced. Here are some of the reasons provided:

  • 71% of undergraduates read their campus newspaper at least once per month. This is higher at larger and higher end universities.
  • Browsing the newspaper is a common way of passing time between classes.
  • Students are encouraged to read campus newspapers, while accessing Facebook in class is not acceptable.
  • Where to place an ad? Next to the crossword or soduku. Students spend a lot of time looking at those pages.
  • $20-$60 CPM for very targeted audiences
  • Target specific campuses that 1) have large student bodies, and 2) are influential. Students even highlighted specific campuses to target such as Texas, Illinois, Michigan, NYU, UCLA and my alma mater – Berkeley (Go Bears!) If they pick up on it, your brand is likely to become known across the target demographic at large.

Thanks again to the 2 presentation teams. If it were up to me, you would all get A’s. (Hope you all did!)
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Should You Provide an Incentive for Email Registration?

Friday, June 5, 2009 by Morgan Stewart
Marketers often use incentives to encourage registration on their website. Question is whether or not it is a good idea? (Actually, it was framed in terms of best practice, but this is one of those gray areas.) [See Your opinion is not “Best Practice”! (and mine isn’t either)]

As background, I dug a bit deeper into data from the 2009 Email Marketing List Growth Study to look at how marketers compared the performance of non-incented site registration versus incented site registration. There are significant differences between B2C marketers and B2B marketers. The numbers for B2C marketers are shown in the chart.



As expected, marketers report higher performance for incented registration for the number of new subscribers, but there is a tradeoff in the quality of those subscribers. Also as expected, the ROI is lower since there are costs associated with providing the incentives. The numbers for B2B marketers are better—they reports 43% higher performance in terms of quantity, but only sacrifice 7% in quality compared to non-incented site registration. So it is no surprise that incentives are used much more often in B2B email marketing than they are for B2C email marketing.

43% better quantity for 7% worse quality makes this is straightforward decision for B2B marketers. For B2C, the tradeoff of 24% better quantity for 18% worse quality makes for a tougher decision.

Recommendation

Often when companies turn to incentives to drive registration it is because they are compensating for poor strategy somewhere else. Non-incented site registration works if you have developed your value proposition and program messaging. If registrations are not happening without the incentives, then there is a problem with how the program is being sold to site visitors. This may be tactic placement on the site, but it is likely something more. If this is you, I recommend focusing on the value proposition of your program for a while by TAKING THE INCENTIVE AWAY.

Ask customers what they want, adjust, refine, and repeat as necessary. You will know you are on track once the stream of non-incented registrations picks up. At this point, open the subscription floodgates by adding the incentive back into the mix. Now the incentive is not the main draw, it’s simply a tool for helping get prospective subscribers off the fence!
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Key Points in the Evolution of Your List Growth Effort

Monday, June 1, 2009 by Morgan Stewart
Following the the recent release of our latest whitepaper on email list growth, it seems a good time to highlight some of the key points in the development of a list growth strategy. Evolution is not a matter of time -- so that in the first year you do X, in year 2 you do Y, and so on. It is more appropriate to think of major milestones as the markers of when it is time to adjust your approach to email list building.

Phase 1 - From Zero to Cash Flow: The first step in the development of a list growth strategy is to reach the point at which the program starts to pay for itself on a monthly basis. This is achieved when the revenue or number of leads associated with the program exceeds the cost of running the program—taking hard costs (e.g., cost to send email, cost of names acquired, COGS, etc), and soft costs (e.g., content development, programming, oversight) into account.

This phase of the program should focus on putting tracking mechanisms in place and optimizing organic list growth efforts such as onsite registration. The temptation may be to look to list rental or other non-organic tactics to jump start the program. However, by starting slower, you decrease the likelihood of wasting money promoting a program that consumers aren't interested in. While optimizing onsite registration, you get to test different ways of positioning the program (i.e., value proposition) to get people signed up, plus you keep costs relatively low as you get your footing.

This process can take some time, but if done right, it will provide the foundation for exponential growth in Phase 2. Jumping the gun and simply gathering too many names too early puts marketers in a position where they need to make painful adjustments later.



Phase 2 - Growth: Once the program starts to generate cash flow, the next phase of list development involves accelerating growth by amplifying what you learned in phase 1. Take successful value messages to additional channels. Integrating search with landing pages that sell the benefits of registration, collecting email addresses during inbound calls, and integrating email with social networks all help build out organic list growth programs and can rapidly accelerate the growth of your list.

If these tactics do not generate the results you are looking for then move onto the second part of the growth phase by adding in non-organic list growth tactics, such as sweepstakes or co-registration. By employing these tactics later in the process, you dramatically increase the likelihood that these efforts will be successful.

Phase 3 - Maintenance: When lists get large, there is a point at which it becomes unprofitable to add names faster than natural attrition occurs. Imagine a list with 5MM subscribers. If natural attrition (due to email addresses going bad and unsubscribes) is 1% per month, then that program must add 50,000 people per month just to maintain list size. Email marketers never arrive at the end of their list growth efforts, but there is a point in the life of every program where revenue growth is going to be achieved more efficiently by optimizing other aspects of the program such as improving relevance through segmentation, personalization, etc.

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How often do you evaluate your email list growth sources?

Wednesday, May 20, 2009 by Morgan Stewart
In the 2009 List Growth Study we identified several things that contribute to success in building a strong and active list. At the top of that list--evaluating the performance of list sources. Take a quick look at this chart from the whitepaper.



It should not be difficult to figure out the moral of this story: Evaluate your sources of list growth and do it often.

In email marketing it is absolutely crucial that you know which list growth tactics are working for you. It may be even more important to know which tactics are not working. Why? Again, it's simple. Marketers who successfully grow their subscriber bases are constantly reallocating their budgets from list growth tactics that are not performing to those that are.

So what are marketers looking at as they conduct these evaluations? Here are a couple things we heard while conducting the study:

  1. Quantity - How many new suscribers is the source generating? Keep in mind, the NEW part. Some list sources provide influxes of duplicate subscribers.
  2. Quality - Do new subscribers from this source regularly engage with your program or are they "once and done?" Worse still are they DOA? This critical component allows marketers to determine if they are getting the right subscribers. List growth is not simply a numbers game, it is a quality numbers game.
  3. ROI - If there are hard costs involved, how long will it pay for the program to pay for itself? Some programs generate a lot of new subscribers that will NEVER pay for themselves. In this case, you are essentially hiring subscribers--you may as well just put them on your payroll.

For more insights from the study, take a look at the entire whitepaper. This is just one of the topics addressed in the 30-page whitepaper. (But don't worry, it's not a diffucult read and there are lot's of pictures!)
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86% are More Likely to Purchase on Payday

Wednesday, May 13, 2009 by Morgan Stewart
According to a new survey released by Chain Store Age, consumers are more likely to make major purchases on or near payday. In fact, 64% say they stop making these purchases within six days of receiving their paycheck.


For years, email marketers have discussed the best day to send and the appropriate course for any company is to test different days to determine which works best for them. But what if you send on Wednesdays and the first Wednesday of the month is the 6th? This information suggests it may be time to test sending based on pay cycles as opposed to simply day of week. Should companies, especially retailers be sending on the 1st and 15th instead of every other Monday?

Makes sense to at least give it a try. And for anyone who has already taken this approach, let me know how it works.

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Reality Check on Social Media from Harris Poll

Friday, April 17, 2009 by Morgan Stewart
The folks at Harris Interactive released a press release yesterday outlining some interesting stats on the use of Facebook, MySpace, and Twitter. According to the release just under half of online adults (48%) have either a MySpace or Facebook page.

The release highlights the following information about the survey findings:

  • Three-quarters of those aged 18-34 years old (74%) have a Facebook or MySpace account but this quickly drops off the older one gets.  Just one-quarter (24%) of those 55 and older have an account;
  • Tweeting is also slightly more prevalent among the young, but not by much; 8% of 18-34 year olds use Twitter, 7% of those 35-44 use it, 4% of those aged 45-54 and just 1% of those 55 and older;
  • While men and women use Twitter at the same levels (5% each), women are more likely to have a Facebook or MySpace account (52% versus 45%); and,
  • There is also an educational difference in usage of social networking sites. Two in five people with a high school degree or less (40%) have a Facebook or MySpace account compared to 55% of those with some college and 52% of those with at least a college degree.

I found something else not listed in the "critical findings" section of the release to be even more interesting. In the midst of the current 'social media' media frenzy, I have not seen any data on how many of Facebook's 200 million active users are really THAT active. After all, I have about 140 friends on Facebook and about 20 people completely dominate the status feed on my homepage. I am pretty sure Facebook would count all 140 people on my friend list as active users, including my wife who hasn't logged into Facebook in a couple weeks.



Thankfully, The Harris Poll survey provides some perspective. About 1/3 of those active users (16% of online adults) claim to update their status daily. Not surprisingly, younger users are more likely to update their status daily.



This information contained in the press release also sheds light on another ridiculous debate about Facebook replacing Google. If this one link does not convince you there is a debate then Google it. (Ironic, isn't it? Yes, and I rest my case.) The Harris Poll asked the question and again reported the results by age. "Digital natives" in the 18-34 age range seem pretty convinced that dominant search sites like Google and Yahoo will not be threatened by Facebook or MySpace. It's people 35 and older who are less sure. But again, it shouldn't be that big of a surprise since these people just don't get it yet. After all, they just signed up for Facebook within the past year.

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Surveys: Using rating scales to assess feedback

Thursday, March 26, 2009 by Morgan Stewart
Thinking about surveying your customers? Good! Customers love to give feedback and surveys are a great way to get feedback on what your customers think you could do to improve your program.

But how do you solicit feedback effectively? Rating scales are an good way to measure the finer details of responses to a statement or question and looking at these details can be important.

Say you want to get feedback on different parts of an email program that contains both editorial content and promotions to determine where you should focus improvement efforts. You could ask something like:

Which part of our emails do You like most?
  1) Articles
  2) Promotions

This would give you an idea of where to start, but consider if you asked the following for each program component:

How would you rate the articles/promotions in our email newsletters?
  1) Very Poor
  2) Needs improvement
  3) Satisfactory
  4) Good
  5) Outstanding

By looking at the scores you may find that the ratings are bimodal, meaning that people have drastically different opinions, about articles while they seem to agree that the promotions are simply satisfactory. With more complete information, you can make more informed decisions.

However, "the right" rating scales are the topic of intense debate among people who care about this stuff. Should you use a 3-point scale, 4-point, 5, 7, 10, 11, other?? The folks at Vovici posted a good summary of the different arguments.

I tend to use 5-point scales when designing surveys, but as you will quickly see, there are arguments for all of them that sound good. The important thing is to use scales when designing surveys to get the level of insight you need to make informed decisions.
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Chart of the Week: Why Subscribers Stop Reading

Monday, March 23, 2009 by Morgan Stewart
Which has more impact on subscribers decision to ignore you, your message or all those other messages crowding your subscribers inbox?

There has been a lot of talk recently about inbox competition, I even predicted that it would have an adverse impact on response rates this year in ExactTarget's 2009 Almanac. Stefan Tournquist of MarketingSherpa shared information last week in his opening keynote at their Email Summit that indicated 72% of subscribers noticed an increase in the frequency of opt-in email they receive. He also shared that response metrics were down as a result--confirming my prediction within the first 3 months of this year.



Even so, other data from MarketingSherpa suggests that we are still largely in control of our own inbox destiny. Subscribers report that the top two reasons they unsubscribe from or ignore commercial email is tied to the individual senders behavior. The #1 reason? 58% said fthat emails that are not relevant cause them to disengage from the email. If we add in #5 on the list "my situation changed" (aka, irrelevant email that used to be relevant) then the number is even higher.

I interpret this as good news. We can't blame inbox fatigue on the bad practices of other mailers, we only need to look in the mirror. "They are sending more, so we need to send more" is flawed thinking. Instead of trying to keep pace with the competition think back to the tortoise and the hare. Slow and steady wins the race.

However, there is one key difference in the email race. In the children's story it is the hare's overconfidence that causes him to lose. In email it will be your competitions lack of confidence that causes them to burn out their list. Sending email more frequently is a fear tactic aimed at driving short-term bumps in revenue. Increasing frequency is successful at meeting that short-term objective, but it sacrifices the health of your subscriber base in the long run. So, proceed with confidence and let your competitors sprint ahead. It won't be long before you pass them by.

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Great Insights on Email Frequency

Wednesday, March 4, 2009 by Morgan Stewart
Last year, Forrester Analyst Julie Katz wrote Break Free From Bad Email: Introducing Forrester's Four-Step Process To Intentional Email for which I conducted an interview. To my surprise, she led with a quip I made that "Email is like the crack cocaine of online marketing." That statement was based on an observation that when emailers continue to increase their frequency they eventually reach a tipping point where revenue starts to decline. While more emails theoretically mean more revenue, there is a point of diminishing returns that occurs when people start unsubscribing from the program faster than you can add new names. So, to compensate for the decline in revenue, marketers increase frequency a little more, which temporarily hides the problem, but eventually comes back. In short, increasing email frequency is an addictive cycle. To correct the problem eventually requires "hitting rock bottom" and overhauling the program--a painful process.

Today, Mark Brownlow at Email Marketing Reports wrote a piece providing a good theoretical framework for understanding the issue. Mark always provides a good perspective on what is going on in the email space, but his latest post, Email Frequency: can you increase it safely? captures the frequency issue perfectly.

Furthermore he provides insights on how to get at the core question of increasing the profitability of email in a healthy way, framed by this statement: 

We're asking, "how can we send more email?" A better question might be "How can we send less email but still raise profits?"


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Chart of the Week: What influences retail site traffic?

Friday, February 27, 2009 by Morgan Stewart
I spent this week in Phoenix at eTail West. In my opinion, the best main stage presentation of the conference was given by Larry Freed, CEO of Foresee Results. During his presentation What Influenced Consumers’ Satisfaction and Purchase Behavior in the Challenging 2008 Holiday Season, he shared some very interesting data on what drove shoppers to the Top 40 retail websites during the past holiday season.

The #1 driver, according to Foresee Results, was positive past experiences. 40% of shoppers going to these sites were direct load based on their past experience--highlighting the fact that the best online marketing tactic out there is superior customer service. The #2  traffic driver was email at 28%. The following graph highlights the top 5 traffic driver as well as a number of social media sources that drive site traffic. Freed summarized his take on social media by saying that, "while social media does drive quality traffic, it simply does not drive much volume--at least not yet."

Holiday Season Traffic Drivers

The most interesting comparisson on this data is the one between email and search. Email drove twice as much site traffic as search. Even more, the detailed data from Foresee indicated that the traffic was also higher quality as measured by satisfaction ratings, likelihood to return to the site, and repeat purchase intent.

Those reading may be tempted to say that I am merely evangelizing email since I work for an ESP. Yes, I believe email is the best online marketing tool out there, but there is a reason--your best and most loyal customers subscribe to email. Acquisition efforts drive prospects to your site that are going to check you out. Retention efforts bring people back in that have already checked you out and decided you were worthy of their attention. If retailers want to target to the people most likely to buy their products, they need to communicate value. Email is the best tool for that job because of its univeral online adoption and targeting capabilities. If retailers want those subscribers to stay subscribers, they need to provide a great customer experience.

As you might imagine, the feeling at eTail was very different this year--the economy was universally top of mind. So was retention marketing. For the first time I can recall in my professional experience, it felt like retention marketing was getting the credit and focus it deserves. The focus of many retailers seems to be shifting from acquisition to retention marketing. Given that 68% of shoppers were driven to these top retail sites through retention marketing efforts this past holiday season, it seems about time!

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How much does "Open Rate" underestimate actual opens?

Thursday, February 26, 2009 by Morgan Stewart
Recently the "open rate" has become a hot topic. Last month the EEC proposed "Render Rate" as a new metric to be adopted by the email marketing community. As a member of the EEC Measurement Accuracy Roundtable, I strongly support it's adoption. Loren McDonald of Silverpop chaired the roundtable along with Luke Glasner. Despite the fact that Loren and I have aired some differences in opinion about the appropriate use of the open rate, we do agree that the current understanding is highly misleading and needs to be fixed. The "render rate" represents a solution that clarifies the confusion and should get us back on track. If you dispute that there is any confusion, take a look at this post by Tamara Gielen, "Newsflash: Your Open Rate Does NOT Tell You How Many People Opened Your Email."

(As a quick aside, "Open Rate" within ExactTarget's reporting interface already uses the recommended "Render Rate" calculation and there are internal discussions going on as to how we can best incorporate the "Render Rate" term into our interface without causing confusion for those used to the term "Open Rate".)

All this debate has brought forth a lot of questions about how big the discrepancy is between reported open rates and the "real" open rate (that is the number of people who are tracked as opens versus the number of people that actually opened and saw your email)?

As you might expect, the number varies, but I have attempted to quantify it. Based on my analysis, the actual open rate is generally between 5% and 35% higher. Make sure you read this correctly, this does not mean that if we report 10% open rate that your actual open rate is 15% to 45%--it means that if the reported open rate is 10%, the actual open rate is likely between 10.5% and 13.5% (10% x 1.05 and 10% x 1.35).

You can look at this for yourself, but it takes a little work and recalling some of those HS algebra classes. Here are the steps:
  1. Get the number delivered in the campaign (Variable “D”)
  2. Determine all of the subscribers for whom a render was tracked for the campaign (Variable “R”)
  3. Determine all of the subscribers for whom a click was tracked for the campaign (Variable “C”)
  4. Compare the two and count the number of people with a click but no render (Variable “C2”)
  5. To determine the number of clicks that are tied to an render simply subtract C2 from C (Variable “C1”)
Once you have the variables you can solve for “X”, where x = our estimate of the number of opens that were not tracked due to images being blocked

X = (C2 x R) / C1

Once you have X, then you can estimate the amount of under reporting. I say estimate because the approach assumes the best. It assumes that people who do not see the images click through at the same rate as those that do see images.  In reality, the number of untracked opens is somewhere between X and C2 (the clicks without an open).

You will want to look at a couple campaigns to get an average, but I have not seen it vary a whole lot within a clients program unless there are really big differences in the creative.

Enjoy!
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Want to get your cross-channel shoppers buzzing?

Friday, February 20, 2009 by Morgan Stewart
This Presidents' Day Mystery Coupon from the GAP really got the shopping blogs talking. Just take a look at some of the chatter in the forums at the PurseBlog.com.



We have written about mystery coupons a couple times (on Email Insider and on this blog), but I must hand it to the GAP Outlet stores for their great execution. The coupons appear to be single use, which means that they were able to tie in-store purcahases back to the people they sent the email too.

The only thing they could have done better in my mind is to limit the number of times the coupons were displayed. The ExactTarget solution allows this, plus by integrating single use barcode campaigns with landing pages and triggered messages, the traffic driven from coupon sites can be used to capture additional email addresses. So, for example, when the coupon has been shown too many times, the user is asked to validate their email address. If the email address does not match, then they are asked to sign up in order to get their own single use coupon. Once confirmed, a new email with a new single use coupon is triggered to the new registrant. It's a basic value exchange--customer gets the great deal in exchange for their email address.

BTW... I will be speaking at eTail West next week on this topic, along with a lot more. The session titled "Maximizing Your Spend with Targeting Offers & Promotions" is shapping up to be an action packed 35 minutes that will end with a little game at the end. People who attend the session can easily earn a $25 iTunes gift certificate by following some simple instructions at the end of the session that show off some cool new ExactTarget features.
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Chart of the Week: Pew Internet Generations Online in 2009

Tuesday, February 10, 2009 by Morgan Stewart
This chart comes from the latest Project Memo released from the Pew Internet & American Life Project. While it is a bit of an eyechart, they have done a nice job of grouping these by activities where there are significant generational differences.



It should be no surprise that there are more things in the list of things younger groups are like to do online than their parents. For example, playing games online, watching videos online, read blogs, and using social networking sites.

But just as important are the things older generations do more often like buy things online or bank online. This is easy to forget when we get consumed by the glitz and glamour of emerging technologies. In short, older people have more money to spend (albeit, less these days than a year ago) and they are not heavy users of emerging technologies... at least not yet.

That said, the most interesting part of this chart is the last section--those things that have little variation across age groups. At the top of the list, email and search. These two remain the bedrock of online activities across the board with 91% of all online adults using email regularly, and 89% of adults using search regularly. Email and search are universal online activities followed closely by other online activities listed in this section, such as researching products and getting news.

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