By having an email strategy in place for your business, you’re not only planning ahead but you’re also creating a baseline that you can operate from in the future. This will help you manage any changes or additional promotional campaigns that will need to be run then. It also makes you look good professionally that you have a schedule of emails to be delivered a year ahead of time and even better, you know the sequence of events that will take place at certain times of the year which leaves you with time to work on template designing, subscriber segmentation, follow-up emails and analysis.
How to begin :
Let’s assume that you already have email marketing in progress and are sending a couple of emails to different pieces of your database on a monthly basis. Keep those emails going till you do something better – hopefully by the end of this guide.
Key advice : Approach this like you would approach any typical marketing analysis – Understand the market environment and the players in it.
Let’s assume that we’re doing this for ZZZ Travels who are selling global vacation trips. ZZZ are competing with Travelocity, Expedia, Orbitz, Priceline, Kayak and the kitchen sink. So, it’s safe to assume here that a typical prospect has emails coming from atleast two of these esteemed travel providers. So, the market is saturated – these players are on top of their game plus there’s additional competition from airlines who sell directly, medium level players like cheaptickets.com and other fringe players. Let’s understand the competition a bit better – we don’st need to to a complete market study to understand the overall market and the available market, but we do need to know what these guys are doing in terms of email marketing.
Monitoring competitor email activity: Subscribe to competition newsletters or email signups. Monitor what they sending across each month. Macy, Sears, Restoration Hardware, KMart all send the same typical dull email with so-called deals, deals and deals. I will admit that Restoration Hardware has done a reasonable job at focusing their efforts and sending across holiday-specific sale emails or even in some cases product specific emails. In any case, I digress. Once you subscribe to your competition’s emails, you’ll see what they are sending to their subscriber base or at least most of their emails – If they’re segmenting their database chances are you wont see their customer-only offers unless you’re a customer.
Next, after getting a sense of their messaging, get a sense of their email design, email content and latest promotions.
Lets try to put some numbers on how their subscribers are reacting. Let’s start with open rates, When Doubleclick surveyed the landscape back in 2004, average open rates were about 38%. Not any more. A study by Marketing Sherpa shows that the average open rate in 2008 was 22%. An updated study in 2009 showed that the open rate for B2C consumers was 25% and for B2B consumers was 23%. Spam filters and the 5-second-view-test are probably the main reasons why people aren’t opening their emails more often.
In any case, these statistics are a good way to begin your planing for the year. If your email statistics are better than the averages shown above, stay with them. If not, then these are goals to aspire to. Typically, the big travel firms have a database of 750K to 1 million active subscribers. If you require to build your email subscriber list, then you’ll have to focus on some information capture activities like having an email capture box on your website, other promotional material, your email etc. (That’s a topic that I may cover later.) Let’s assume that you’d want to build your active database to 100K members in a year’s time. Using the average industry statistics for 2009, present them as the goals you’d like to have for your campaigns overall.
Open rate of 22% = 22K subscribers will open. 4% will peruse it and click on a call-to-action link and 210o of those 4000 subscribers will buy something from you.
If you don’t have an average order size already calculated from either your Omniture of Google Analytics (assuming that you have conversion tracking implemented by either party), call up your sales team, get the average order size (In this case, let’s assume, it’s $1000) which means that you’re projecting sales of $2.1million from your email marketing efforts should all go well.Assuming that your database will grow by 50% every year, you can create a 5-year plan for your email marketing efforts (That’s a good slide in your Powerpoint).
So, now you have a good start in terms of what you want to achieve in terms of revenue as well as email marketing metrics.
Costs involved :
I’m going to begin with showing you a table of what’s involved and explain it from there. Assuming that you already have an in-house team that can help you design, copy write and code, and, of course, if you’re reading this, I’m assuming that in some way or the other, you’re in charge of the email marketing for your firm.
Note that the cost to company of an email marketing manager hasn’t been added. That’s because if your company is like most companies, you’re wearing many hats and are doing a bit of SEO and SEM so, if that’s the case, try to estimate how much time you spend per email and add that to the overall costs. If you’re solely the email marketer, then add your annual salary to the costs.
Next, you can calculate your GM (gross margin) in the following way: GM = Sales less Cost of Goods sold (COGS).
Lets assume that your company’s cost of each travel package on average is $500. For 2100 trips, that cost is $1.05 million. See the table below for the rest of the calculations.
An ROI of 50% is like Larry David would say is pretty… pretty…pretty… good. Note that even if you adds the email marketing manager’s salary to the overall costs, your ROI will still be in the high forties and that’s good.
Bear in mind a could of things : You’ll come across blogs or someone purporting to receive ROIs of 300% or so. To me, that’s a load of BS. Most of these folks take a fraction of their costs into account with the result that their results are overinflated and unless the head honchos dig deeper (which doesn’t happen very often), these BS statistics get splashed all over the web and at forums.
Do remember though that you can increase your sales volume by increasing your subscriber outreach.
You may also have a much more crowded schedule in terms of email sends if you segment your subscribers. That would lead to more sales.
In part 2 of this series, I’ll focus on how you can work on designing a sustainable template that you can use regularly, how to make the most of your existing resources and how to dig deeper into your analytics by using Google to get a stronger insight into your online visitor behavior.
