Archive for the ‘B2B’ Category

Email Testing Equilibrium

July 7th, 2009

We talk a lot about the great benefits of implementing testing strategies with our email efforts. I’ve made multiple references in various posts, and so far have had two dedicated posts on the topic: A/B Subject Line Testing and Email Marketing Testing . Marketers (not just email) LOVE testing. Combine with some juicy analytics and we’re entertained for a long time.

Nothing has changed with the fact that testing should be implemented and will inevitably improve your email marketing efforts. I do feel, however, that there can be a risk of over-testing, or ‘testing burnout,’ if you will. This mostly comes down to available resources a company has and the expected return on marginal testing programs. If we put 10X more resources into testing and only realize an x% increase in sales, our testing program could be producing negative returns.

This has a more costly effect on smaller companies, as the scale of return is much smaller. [The marginal return from an x% increase in open or click rate is much larger for a big company with a list size of 5,000,000 vs. a small company with a list size of 5,000.]

For that small company, testing is indeed important. They need to make improvements to their email marketing efforts and increase sales just like every other company. But at some point a negative return is realized.

Example

  • Let’s say a small e-commerce site selling backpacks has a list size of 15,000. Their monthly promotional email brings in $1,350 on average. [25% open, 12% click, 5% conversion, $60 average order]
  • This company creates a testing plan that will require an additional 3 hours per month of company resources.
  • After the test, they increase their metrics to: [28% open, 15% click, 5% conversion, $60 average order]. In this case we see a $540 increase in revenue. Perhaps a decent result for the small e-tailer. Their gross testing return was $180/hour.
  • Now let’s say they create a testing plan that is more robust and requires an additional 30 hours of company resources each month. (compared to no testing)
  • After the new testing program, they increase their metrics to: [30% open, 19% click, 6% conversion, $62 average order]. In this case we see an $1,830 increase in revenue. Their gross testing return was $61/hour. Depending on their margins and several other unknown factors, this may or may not be a profitable scenario

These same metrics with a big competitor would have a much different result. e.g. If another company had a list size of 750,000, their marginal return on the last scenario would be $91,530 with a $3,051/hour testing return. Probably quite favorable.

So where do you find that testing equilibrium? It comes down to the unique situation of each business. Regardless of size, start small with your testing program and work up from there. Pay close attention not only to the increased results of your tests, but the amount of resources that go into your various testing programs. Time for different content, designers, approval, segmentation, deployment, review & analysis etc, can add up when you are introducing complex testing strategies.

In the end, you should test to see what testing portfolio is optimal for your email efforts.

Cheers,

Forest Bronzan 

Questions or thoughts? Leave a comment or feel free to shoot me an email

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Email Marketing Testing

June 12th, 2009

In a previous post we talked about a simple approach to A/B Subject Line Testing. Here we take a sample of our list, test 2 (or more) subject lines, and roll out the winning subject line to the remainder of the list. If you have the right email platform, this process can be automated and should be implemented on most sends.

There are of course several other elements besides the subject line that you can be testing. But first, a few things to keep in mind:

1. Why Test?: To get better results. If you are not testing, you are not fully leveraging the email channel and not getting the best return on your efforts. Testing allows us to make incremental improvements to our email metrics. Below is a simplified visual description of the email funnel, where every metric counts. In this example, an additional 3% click through rate would result in 28 additional sales.

Email Metrics Funnel

2. Be Structured: select a variable to test and keep other variables as constants. You will want to isolate your variable in order to test each variable independently.

3. Create a Plan: Don’t just go in and start testing. Create a structured plan of how you are going to implement your tests and keep detailed records of metrics so you can use the data to make meaningful adjustments to your program.

Some Elements to Test

  • Subject Line
  • From Line
  • Content
  • Creative
  • Number of Links
  • Promotion
  • HTML vs. Plain Text
  • Frequency
  • Time of Day
  • Day of Week
  • Pre-Header Content
  • Text to Image Ratio
  • Landing Pages
  • Location of Images
  • Personalization

With the availability of tools to help us execute our testing strategy, there is no reason email marketers should not have a testing plan in place. Proper testing can help us make key incremental improvements to our marketing programs. If you’re starting out, start small and simple and build up from there. If you are running a sophisticated program, make sure you have a road map in place and system for accountability and measurement.

Happy testing!

- Forest Bronzan | Follow Me on Twitter!

Questions or thoughts? Leave a comment or feel free to shoot me an email

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Email Metrics: Create Your Own Benchmark

June 8th, 2009

In a previous post we discussed various email marketing metrics to monitor. This is very important in order to make continuous improvement to your email program.

Many people ask about ‘average metrics’ with the desire to see how their campaigns are measuring up. Some industry wide statistics may be interesting and somewhat useful, but even more value comes out of measuring your campaigns with your own previous metrics. Every company is different and every list will behave in a different way. While it may be nice to know that the average open rate in the first half of 2008 was 24.86% for the transportation and travel industry, I would be very interested in knowing that MY travel company’s open rate was 22% during that period and now averages 26%.

Moral of the story here:

1. Look at some big industry averages, but pay closer attention to how your campaigns compare to your own historical metrics.

2. In addition to viewing and keeping track of metrics on a campaign or monthly basis, establish a system for keeping historical records of all the metrics you track.

Below is an example of a monthly snapshot of metrics. (Note these are arbitrary numbers for illustration)

(Click on image to enlarge)

Monthly Email Metrics Example

It’s nice to see how our campaigns performed in that month, but I also want to see how they did compared to my own historical average. Comparing just to the previous month does not give us an accurate picture of how things are doing. One of the simplest methods is to create a trailing twelve month record. If you are keeping track of metrics each month, pull the average for the previous 12 months. This helps correct natural variance and provides a better picture of the direction your campaigns are going.

Below is a simplified example of how this might look for you. (Note these are arbitrary numbers for illustration)

(Click on image to enlarge)

Trailing 12 Month Example

In this example, we can see that compared to the previous 12 months, our total revenue this month was $2,266 lower. If we were looking just at the previous month we may be higher for certain metrics, but this does not paint an accurate picture of performance.

Setting up a historical benchmark guide for your email program will provide you great insight on how your campaigns are performing. In addition to looking at averages as we have focused on in this post, you can compare months, quarters etc. This can then be as simple or complex as you need and want to implement.

Questions or thoughts? Leave a comment or feel free to shoot me an email.

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The Email Shotgun, Rifle, and Blow Dart

June 1st, 2009

We often discuss the shotgun and rifle approach to marketing, and with email communications it plays an extremely important role. The premise is straight forward, but the approach you implement will have significant implications on the effectiveness of your email efforts.

Every email marketer you ask will likely balk at the shotgun approach and jump straight to a rifle strategy. While in theory this is ‘optimal’ – it’s not always that black and white. Additionally, many email marketers pick up the rifle, put on their sniper costume, and call it a day. While this of course is a great starting point, there are opportunities to have a greater impact with multiple approaches also utilizing a high powered blow-dart.

Let’s Examine the Shotgun, Rifle and High Powered Blow Dart

1. Shotgun Approach

Basics: Your email communications are broad and promotions are developed for a wide and diverse audience. In other email terms; you are sending one general email to your entire list with no segmentation and little or no personalization.

Why it’s Bad: For starters, you are not leveraging the email channel. With available technology, you have the opportunity to create targeted segments and dynamically insert personalized data. With a ‘batch and blast’ approach like the shotgun, everyone receives the same email and promotion.

However: What if you don’t have any data (outside of email address) to segment? Many companies starting off with email don’t implement all the best practices for list acquisition, not to mention proper tracking of email engagement for segmentation purposes. In this case, you may be limited to a broad email – and this creates an opportunity to quickly get important information about your subscribers for more refined communications in the future.

For starters:

A. Make sure you have navigation in your emails — which will help you segment based on click activity.

B. Conduct A/B subject line testing to better leverage that big send.

C. Create an email preference center to get more data from you subscribers.

D. Implement some email segmentation just from email engagement.

We of course want to strive for targeted, ‘rifle like’ communication with our subscribers – and when possible this should absolutely be implemented. But In the event you are unable to do this from the start, do begin collecting information that will allow you to make better use of the email channel in the future.

2. Rifle Approach

Basics: Your email communications are focused and campaigns are directed to a select target audience/segment. Promotions are extremely relevant and timely, and you strive to create the impression of a 1-1 communication.

Why it’s Good: Instead of sending one message to 100,000 subscribers, we may be sending 20 messages to 5,000 subscribers based on strategically defined criteria. Here we place our subscribers into meaningful segments and serve them relevant content. This may be done through individual messaging or utilizing dynamic content to execute our segmentation and content strategies.

This will have tremendous impact on the success of your email efforts, and should be implemented whenever possible. This is an extremely summarized description, but the basic premise is that we want to provide relevant and extremely targeted communications and promotions to our subscribers.

3. High Powered Blow Dart

Basics: The blow dart picks up where the rifle left off. With the rifle approach, we are creating targeted segments, developing relevant and timely communications, and creating a better experience for our subscribers. This may or may not include advanced personalization within the email, but we like to make sure it goes that extra step and utilize a blow dart, if you will, to truly strive for a 1-1 communication.

Here we make sure we utilize dynamic content when possible, and further personalize the communication by inserting data that is relevant.

Example of dynamic content from American Advantage

Example of simple personalization from Wells Fargo

Summary

1. Create targeted email segments and focus your content and promotions. Become a sniper and provide extremely relevant and timely communications.

2. If for whatever reason you don’t have data to segment, then start on a basic level with email engagement, reviewing your acquisition process, and upgrading to a better email platform if needed. There is no reason you can’t segment based on some criteria (historical opens, click activity, list origination, products purchased etc)

3. Create an even more personalized experience and utilize dynamic content, personalization, and even more specific targeting.

Cheers,

Forest Bronzan

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