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Mastering Email Marketing Measurement and Attribution - Beyond the Open Rate

As marketers continue to identify opportunities to leverage email as part of an integrated and multi-channel email marketing plan, it is imperative to understand the most effective manner in which to measure success of the channel. And with no standardization in nomenclature or calculation of email measurement metrics, coming to consensus can be more than difficult.

Email Attribution

What is certain is that it is time to go beyond the basics. While opens and clicks provide you some insight into how a specific message is performing, it does not give you any insight into the effect that that message had on the buying decision. So the real question becomes, how to do you attribute revenue and conversion to an email communication?

The answers are easier than you think – though few want to take the approach. Direct marketers have been doing channel attribution for years; formulating means and methods for determining incremental behavior as driven by a marketing effort. Consequently, this requires holding out a Control group. Yes, a control group that you don’t send select communications to. I know…a statement like this is likened to email blasphemy these days, but nonetheless, it is an effective (and easy) way to achieve channel attribution.

Measuring Email Impact

In taking the lead from Media Buyers and Direct Marketers around the globe, here are a few things to consider when determining the impact your email program has had on your marketing efforts.

1. Impressions
Media Buyers have long leveraged the “impression” as a metric in the ad procurement process as well as success measurement. The reason is that tracking the conversion of a television commercial or an ad in a magazine is near impossible to measure. However, it is also a known fact that exposure to an ad or commercial can also formulate a response from the consumer; hence, the importance of an impression. But because of the insane amount of tracking that we can do in the online world, the impression has gone by the wayside in measuring impact.

We look at email deliverability – how many email addresses did not bounce. We can also measure inbox placement (to a degree) and open behavior (to a degree as well). But very few marketers actually put any weight on the messages that hit the inbox but were not opened. Why should you? There was no engagement, right? Wrong. Your message made an impression.

If your message made it to the inbox, the customer likely saw it. They may not have opened, clicked and converted in the streamlined sense that we would love them to – but that single impression could have driven behaviors elsewhere. Maybe they called the call center, or went directly to your site to engage in the manner they chose. Maybe they truly did nothing at all, but how many of you can answer that question? Very few I would imagine. If you truly want to understand the value of the email channel to your bottom line, spend the time to determine the value of an impression to the Lifetime Value of your customer.

2. Incremental Lift
I started my career, years ago, in the direct mail business. Oh yes, postcards were my life. But the most valuable discipline I learned during my stint there was the value of metrics and measurement. Because direct mail can be so costly and time consuming, marketers want to be smart about how they allocate their budget to the channel as well as determine the impact the offers had on a specific subset of their audience; otherwise they could be unknowingly throwing money down the drain.

Email is a channel that is certainly more cost effective and less time consuming than direct mail, but the fundamental principles are the same. You are ultimately trying to drive a behavior from your customer that might not have otherwise occurred. But because we can learn in real-time about our customers’ engagement with our email and email messages, the idea of testing, holding out a control group and measuring incremental behavior have well…died.

Measuring Incremental Lift

There are two ways (I employ – I am sure there are others) to measure incremental lift – both certainly have room for error and should be used as directional, not gospel. But any insight is better than no insight at all.

First, there is the Control Group. This requires that you identify a statistically viable and representative subset of your email marketing database that you will leverage as a control group for a period of time. There may be some table-stakes communications that you send to everyone, such as transactional alerts, account updates, maybe even a newsletter – those are fine, but suppress them from everything else you send.

Over time, you will be able to see what the average revenue contribution of an email subscriber is versus those who are being suppressed from promotional or other email marketign communications. The first step in getting here is truly understanding how many and what types of communications your customers are getting and then weighting the importance of each of those communications appropriately.

The second, and sometimes preferred by marketers, is something of an “after-the-fact” analysis. It is safe to surmise that the act of a customer unsubscribing from your email marketing program doesn’t necessarily mean they are no longer a customer. In order to conduct this analysis effectively, you need to first be able to track revenue contribution at a customer level and/or know the Lifetime Value of your customers. Next, you need to be able to compare behavior of a customer over time. These can be complicated feats to overcome for some brands, especially if your data systems are disparate, but getting as close to that Holy Grail as possible will open you up to a wonderful world of data analytics!

Once you have this information, the analysis can begin. Be sure to take seasonality or conversion patterns into consideration when determining the time period to evaluate. For demonstrative purposes, I am going to look at a quarter-over-quarter comparison. Identify those email recipients that unsubscribed or complained in 4Q11 and attribute their individual revenue contribution at a record level. Then take that same group and look at their individual revenue contribution in 3Q11 when they were email subscribers. What’s the difference? Is there a marketed increase when they were receiving your email communications or no? This can help you to understand the incremental lift your email communications provide.

So now that we have totally geeked-out on the data, start looking at other cues you can take to measure your email marketing success from our Media Buying and Direct Mail counterparts. They have been at this a long time and may just strike a chord with your email program.

Want some more email marketing resources? Check out our white papers!

Posted by: Kara Trivunovic at 2:21 PM
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Comment by 1 – March 2, 2012 at 11:27 PM

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Comment by 1 – March 2, 2012 at 11:27 PM

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Comment by 1 – March 2, 2012 at 11:27 PM

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Comment by 1 – March 2, 2012 at 11:27 PM

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Comment by 1 – March 2, 2012 at 11:27 PM

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Comment by -1' – March 2, 2012 at 11:27 PM

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Comment by 1 – March 2, 2012 at 11:27 PM

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Comment by 1 – March 2, 2012 at 11:27 PM

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Comment by 1 – March 2, 2012 at 11:27 PM

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