Measuring the customer not the campaign

Open, clicks and engagement…

Are we barking up the wrong tree when it comes to measuring email performance?

When we judge the success of our latest email marketing campaign most of us turn to open, click or engagement rates.

We reel off a weekly or monthly report detailing our email activity with the rates of each campaign – but are these metrics really a measure of success when it comes to your overall strategy?

In this post we’ll look at an alternative measurement of your recipients’ interactions over time and tell you how you can measure the impact of your eCRM strategy – not just the success of individual campaigns.

Email marketing is about building an online relationship with your audience – leading them from potential lead to loyal customer. It’s a rapport built over time with continued effort.

Rarely do you send one email and the customer makes a purchase straight away. More commonly it takes time to build interest, familiarity and trust through a series of emails – something we commonly call lifecycle marketing.

Some emails you send will remind the recipient about you, some will spark interest in a product or service and others will reassure them of your credibility. Unless they trigger a sale or click-through it can be pretty tricky to pin a value on them.

There are scenarios where emails don’t result in a sale, click or even an open but they’re still doing a job. We’re talking about the types of emails that you open and scan without clicking, the subject line that pops into your inbox but you forget to click or the brand you remember when you see a message that you think you’ll read later. They still peak interest, remind you and reinforce your message – it’s just the customer might not be ready to act. These emails make up the series of emails that may in fact propel the customer to take action later.

Experienced marketers often scoff at the basic metrics of open and clicks, preferring instead to talk about ‘engagement levels’. These at least account for activity that doesn’t result in a sale. But the term engagement is often used as a buzzword without people fully understanding how it’s defined. It’s still often measured per campaign which still doesn’t measure the cumulative effect of relationships built by email over time.

More worryingly, engagement levels per campaign don’t necessarily mean you’re engaging new people. It could be that you’ve stimulated the same highly engaged core audience you were before. This is when revenue from your campaigns starts to stagnate as you fail to spot that you’re not reaching out to new customers.

It could also lead to you excluding customers from your sends – those you see as ‘unengaged’ after not having opened, clicked or bought in a while. In fact these customers could be seasonal, interacting with your brand at specific times such as Christmas, spending more with you in one purchase than customers making smaller purchases throughout the year.

So where do we go from here if clicks, open and engagement aren’t the answer? You can’t simply ask your colleagues to trust you when you need to provide answers for the boardroom.

Instead of using open rate, the DMA proposes the metric of ‘open reach rate’ (DMA, 2013). Open reach looks at what proportion of your database are opening your emails over time. By measuring it, you can monitor if you’re increasing the number of people opening your emails – therefore expanding the reach of people you’re talking to.

The theory behind open reach is that it’s better to receive opens from new people than it is to get opens from people who’ve opened your email marketing before. Basically your emails might be receiving a healthy open rate of 20% but it might be the same people opening. If it’s the same people then your revenue isn’t likely to increase – they’re likely not adding new sales on top of what you’d usually expect.

The reason why you want new people to open your emails is that it’s the easiest way to increase your email revenue. This is based on research suggesting that a significant chunk of revenue is generated by people who haven’t opened your emails for ages, or who just opened one for the first time (Alchemyworx, 2012).

The other benefit of open reach is that it tells you how your audience is increasing as a whole. Open rate only tells you how one campaign has performed in isolation whereas open reach takes a longer length of time and monitors how your audience has reacted to a series of emails. It makes a lot of sense when you’re talking about lifecycle marketing as we all know it takes several emails to get a result.

And unlike other metrics, open reach will tell you how much of your audience you’re reaching and how healthy your database is.

So next time you’re reviewing your email marketing strategy don’t assume that open, click or engagement levels of your individual campaigns will give you the best picture.

If you’re looking to analyse your approach to eCRM and new customer acquisition, it’s far more productive to include metrics such as open reach. After all if you’re trying to change customer behaviour it’s far better to measure the customer – not the campaigns.

Download the Sector Series: Email Marketing for Retailers guide

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