One of the questions marketing professionals (or campaign managers) ask quite often is “What’s a good open rate for an e-mail?” or “What open and click percentage should one aspire for ideally?” Marketing consultants dread this question as the usual answer is “It depends”, followed by an explanation that one should look at internal or industry benchmarks.
The marketer expects a definite number while the marketing consultants most often have none. The rationale behind such a reply stems from the fact that one should not look at open rates in isolation. One should look at whether the response rates are increasing/decreasing vis-à-vis last year/half year etc. How is it trending over a period of time? Imagine an acquired database that the marketer mails to, a 1% response might be a good one to get while a campaign say co-branded by an educational institute and sent to an alumni network, a 40% response rate will also be deemed low. Thus, the open rates work best as an in-house benchmark to track over time, because it can only signal a progress or problems with customer engagement.
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Open rates tell half the story
The open rates tell a marketer half the story anyway. What the marketer must have in mind is to calculate the overall conversion or the desired outcome expected from an e-mail marketing campaign. So, one of the metrics that the marketer must have to define a successful e-mail marketing campaign entails both response and conversion (Response Rate% x Conversion Rate%). One cannot be seen independent of each other.
Developing Key components of e-marketing strategy
The marketer, these days, is under constant pressure from the product or business teams of the organization as the cost and effort for sending direct e-mail communication has come down rather steeply over time. Since the cost of sending an e-mail is miniscule compared to the commercial benefit it can drive, why not send a mail? What the business may not realize is the impact of the ‘decay effect’ of e-mail marketing campaigns and thus the need to develop a contact policy by the company
Getting your strategy of Email marketing right
In order to maximize the chances of their e-mail marketing campaign, here are some pointers marketers must watch out for:-
- CUSTOMERSINGLE VIEW
There is customer information available in various databases for a company which may be fragmented or in different source systems. Right from when a customer purchased from the company to when he/she applied for the second or third product; from when he/she came online to when he/she started seeing the mails on mobile devices; there is data everywhere to analyse. There needs to be a single view of these customers, so that a very well-defined customer journey and behaviour can be tracked and analysed. A marketer can weave a story on the customer journey and build a well-orchestrated communication strategy.
- CUSTOMER UNDERSTANDING
As some old school marketing professor will say, there is no substitute to simple one way and 2 way frequencies. Whether the customer base is young or old or is metro or non-metro base will define your e-mail campaign strategy.
When the customer demographic is overlaid with transaction or usage behaviour, it throws some new light on the customer. The transactional analysis will always lead to more insights on the customer’s spends and usages.
The third dimension of understanding customer behaviour better is through their social media behaviour. This can be used more as a validation of understanding the customers better.
A detailed profiling study of the customers also helps the marketer to build personas which can then be used to acquire new customers by building lookalike models and making it a part of their e-mail marketing strategy. A marketer can also estimate the opportunity much better basis the personas developed.
- BUILDING CUSTOMER PROFILES
Post doing a good profiling exercise, number of segments a marketer can build is infinite. The more segments you can manage the better will be the return on investments as you will get very close to what an individual customer wants. As the number of customers per segments increases, heterogeneity increases. A number of banks therefore are now adopting what is called the Lifecycle Based Needs. The whole customer base can be divided into 5-6 segments with perceived financial situation and therefore banking needs.
The marketer basis the customer-based understanding can create the lifecycle on say the risk appetite of the customer or maybe on the propensity to try newly launched product or offers. How these get weaved-in into the e-mail marketing campaign strategy is a critical part of the success of campaign itself.
- CONSISTENCY IN COMMUNICATION ACROSS CHANNELS
E-mail marketing must take advantage of the multiplier effect of communications channels and media mix elements. If it is an end of season push on a credit card, it is important that this message be orchestrated through all mediums of communication. What the customer would see in their Facebook ads/walls must not be diametrically opposite to what they get in their e-mail campaigns. It is important to orchestrate the messaging through a structured campaign wave.
India is going through an interesting phase currently with Indian marketers believing in the power of marketing technology and marketing automation through e-mail marketing and thus increasing their marketing investments on such digital channels. E-mail campaign-led programs remain a significantly more effective and cost optimal way to acquire customers compared to any other digital channels of communication. Number of customers with e-mail is rising, however, the time spent per customer on e-mail shows a downward trend with alternate channels like mobile app and notifications on the rise. Thus the challenge for the current day marketer is to create an interest in the mind of customer right from pre-planning the e-mail campaign to the first touch point (when the e-mail lands in the inbox) to when the journey ends (marketing objective is achieved). Marketers need to look beyond clicks and at the entire life stage of the customer across such campaigns.