Email ROI – How Good Results Today Can Mask Big Problems Tomorrow

Email works. In fact, email is the highest ROI channel by far. Email marketing returns $57.25 for every dollar spent, more than 150 percent greater than the ROI for non-e-mail online marketing (Source: DMA, 2007).

But perhaps email works too well for our own darn good. The revenue that we generate every time we send out a generic, non-segmented blast mailing masks a lot of missed opportunities. For too many marketers, email revenue per subscriber is not growing and more and more subscribers are simply ignoring our messages.

That is because most email marketing today is pretty terrible. It’s irrelevant, poorly timed, creatively uninteresting and completely generic. The vast majority of us still follow a batch and blast broadcast approach that will never make our email messages relevant to most of our subscribers most of the time. The opposite is true.

Consider that if we can earn a nearly $60 ROI by creating email programs that are compelling to just a few subscribers, just occasionally – imagine what we could do if we actually optimized our programs. Your true email ROI isn’t captured by averages. It’s misleading to think about email’s contribution without factoring in the risks of batch and blast which include higher spam complaints and diminished deliverability, list churn and inattentive customers, brand damage and lost future revenue through continued irrelevancy.

Here’s the challenge. We send out a message, we get revenue. That’s good! But that isn’t the end of the story. Sending out messages that are irrelevant to most of your file has other costs. Look at your unsubscribe rate. Check the complaint rate (subscribers clicking the “this is spam” button). Both will rise when you send irrelevant or too frequent messages. The cost to replace these subscribers and maintain your file accuracy will cut into that incremental boost. Plus, in every case we’ve seen, the non-responder rate (subscribers with no opens or clicks) also goes up dramatically.

It’s not so hard to see why. When we abuse the trust that subscribers give us and send boring messages or more email than could possibly be relevant, subscribers tune all our messages out. They may not actually unsubscribe or complain to the ISPs, but they “emotionally unsubscribe.” They unsubscribe with their delete button. These subscribers are now lost to us.

Add up all that collateral damage, and your ROI may be much less or even negative.

It doesn’t have to be this way. In order to optimize the channel, improve our share of wallet and gain our rightful seat at the marketing table we must abandon our addiction to broadcast email and harness the power of email to establish and nurture a dialog with our subscribers. Email success and ROI is a direct result of our ability to build a relationship with our subscribers – the kind of relationship that drives incremental revenue, loyalty and word of mouth.

What does that relationship look like? It is customized, tailored to subscriber needs and structured around the prospect and customer lifecycle. Face it — your email program is not optimized if you send the same thing to every person on your file, every time.

It will be optimized when you actively segment prospects from customers; welcome new subscribers and engage with non-responsive subscribers before they tune you out completely; acknowledge behaviors by sending triggered messages around abandon shopping carts and recent purchases, download requests, website visits and customer service calls; and respond to life stages like contract renewal dates, birthdays, anniversaries and job title changes.

Want some help figuring this out?

Helping you master these practices and apply them to your own program immediately is the mission of the email sessions at Marketing Profs Digital Mixer, a multi-channel online marketing conference coming up in October. I’m delighted to be program chair for email content, and excited about the caliber of speakers and the depth of the topics. If you want to meet other marketers who are dealing with the same challenges and learn from some of the top tier experts in the business – then this conference is for you. Check out the full agenda here. And be sure to enter promo code ESPKA08 to save big on the $1,295 registration fee. Use the code to sign up before September 19th and save $350. After the 19th the code saves you $200.

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