Going the Extra Mile with E-Mail Marketing

The ultimate goal of e-mail marketing is to achieve increased sales conversion rates through ongoing top-of-mind brand communications with the customer base. Measuring the effectiveness of e-mail marketing campaigns goes well beyond simply open and click-through rates. Although e-mail metrics provide a basis for analysis, determining the impact e-mail marketing has on increased e-commerce sales now is traceable and linked to behavioral site metrics, along with attitudinal surveys conducted with subscribers. Optimizing e-communications to cater to multiple customer segments requires strategic testing of various e-mail campaign components to determine which subject line, body copy, calls to action, promotional offers, or design and layout components will work best together to effectively engage a target audience.

Few marketers take the time and effort to test their campaigns on a regular basis, but even a slight copy or graphic change could go a long way to improving the performance of an e-mail marketing campaign. According to eMarketer, only 63 percent of U.S. e-mail marketers test their campaigns. Those that fail to conduct any form of e-mail testing simply don't know how to do it (33 percent) or do not have enough time to test (27.5 percent). Agencies that offer e-mail marketing services may provide their clients great creative, but tracking and measuring e-mail program ROI is a low priority. Few agency account managers know how to evaluate their own creative masterpiece, nor would they want to. Moreover, both agencies and mass mailers do not have the research expertise to analyze recipient data and often resort to third-party research consultants, charging clients a higher premium.

The best way to conduct ongoing e-mail testing is through a full service e-marketing solutions provider grounded in research fundamentals, where interests are aligned in improving e-mail marketing ROI and program health. More importantly, research companies that are able to track both customer attitudinal data (from surveys targeted at subscribers) and behavioral metrics down to the individual recipient level for analysis provide a great advantage for understanding key customer segments. Engagement no longer is measured solely on "clicks" as a means of determining e-mail campaign success. Marketers are looking for a more profound understanding of their online marketing efforts linked to both customer attitudinal and behavioral metrics and ultimately, growth of e-commerce sales.

A North American-based consumer retail company with more than 65 store locations placed a higher emphasis on its e-commerce Website to drive overall corporate sales. E-mail marketing has become a necessary component of its marketing strategy in staying top-of-mind among its online customer base. It wanted to evaluate the effectiveness of two promotional offers targeted at the same audience: shoppers who made at least one purchase on an e-commerce site within the last six months. In an A/B split test, 50 percent of the target group received an e-mail campaign offering free shipping with no minimum purchase, while the remaining half of the group received 15 percent off any one regular-priced item.

Both promotional offers performed equally well in terms of open rates and click-through rates, with the 15 percent off discount performing slightly higher at 74.7 percent and 21.5 percent, respectively.

A/B Split Testing of Promotional Offers

Open Rate:

A: Free Shipping After 7 Days: 73.2 percent
B: 15 percent Off After 7 Days: 74.7 percent

Click-Thru Rate

A: Free Shipping After 7 Days: 20.8 percent
B: 15 percent Off After 7 Days: 21.5 percent

Click-to-Open Rate
A: Free Shipping After 7 Days: 28.4 percent
B: 15 percent Off After 7 Days: 28.7 percent

Online Purchase to Open Rate
A: Free Shipping After 7 Days: 1.8 percent
B: 15 percent Off After 7 Days: 0.9 percent

Online Purchase to Click Rate

A: Free Shipping After 7 Days: 6.5 percent
B: 15 percent Off After 7 Days: 3.1 percent

What was interesting though, was that 6.5 percent of subscribers who clicked through to the Website made a purchase using the Free Shipping promo. Only half that amount (3.1 percent) who received the 15 percent off discount made a purchase.

In determining possible reasons why there were fewer transactions made among shoppers who received the 15 percent off discount, we examined subscriber behavioral data from the e-mail marketing campaign and linked this information to their behavioral metrics collected on the e-commerce Website. We discovered that approximately 38 percent of shoppers dropped out of the transaction on the last page prior to confirming the purchase. Delving deeper into the data collected, we conducted a quick online survey with the specific shoppers who were identified in the system as having dropped off the final transaction page to uncover their reasons for not completing the process. The primary reason customers declined to purchase was traced to frustration with the extra shipping charges that were incurred, which often outweighed the 15 percent discount applied. Customers stated they would rather visit a physical store to avoid paying these additional fees.

As a result of these key findings, the client continued to offer free shipping to the same subscriber parameters and also tested its effectiveness among other target audiences, such as more frequent shoppers or those who had never purchased from the e-commerce site before. Remember, not all audiences will want the same type of content; testing e-mail marketing campaigns is essential in determining how to best cater corporate communications to multiple audiences over time to encourage higher sales conversion rates. Further strategic testing included using different combinations of subject lines and graphic elements to drive subscribers to the e-commerce site.

Marketers no longer can afford to measure subscriber engagement levels solely on open and click-through rates reported on an aggregate campaign level. Going the extra mile in collecting both behavioral and attitudinal data on an individual customer level from multiple marketing channels enables marketers to optimize their ROI more effectively over time. This may include tracking the subscriber's entire e-marketing experience, from the moment the e-mail campaign was opened, through all the product pages browsed on the e-commerce site, and finally to the check-out stage. Coupled with research fundamental expertise, this detailed level of analysis is unmatched compared to any agency or mass mailer company that adheres to "batch-and-blast" e-mail marketing practices. Using this methodology, sales conversion rates can be optimized through strategic testing, providing a much closer measure of e-mail marketing ROI than ever.

Melissa Chien is manager of OnXpress e-Marketing Solutions, and Jason Ten-Pow is president of Research Operations, at OnResearch Inc.