Measuring the True Impact of E-Mail on Overall Sales
In a truly integrated marketing plan, every ingredient plays a vital role. The fact that you can’t directly attribute a sale to every e-mail message doesn’t mean the e-mails aren’t working. Response to e-mail is best measured as one part of your whole marketing program.
First, don’t be fooled into thinking that e-mail is only a direct-response medium. In fact, there is credible evidence to suggest that e-mail is also effective as a branding medium. A 2004 retailer study by Bigfoot Interactive found that e-mail recipients are 7% more satisfied with purchases than non-recipients. They were also more likely to continue to purchase products from the retailer and to recommend the retailer to others. This suggests that customer satisfaction and loyalty are real and measurable benefits of e-mail marketing that extend beyond the online channel. Even when e-mail is not the direct driver of a particular sale, it has a powerful impact on the recipient’s overall brand experience.
The best way to analyze this effect for your company is to examine the behavior of e-mail recipients and non-recipients. Are customers who receive e-mail buying more items, buying more often or spending more? You can do this by looking at total purchases, average purchase price and total purchases per year.
You can also dig a layer deeper and measure these sales figures against how long an address has been on your list their response rates and more. For example, you might discover that a given e-mail address generates a very high open rate but rarely clicks through to purchase. Further investigation, however, reveals that she has total purchases that are 15% higher than average. It would be reasonable to assume that the e-mails she gets contribute to her spending. The more you can tie your e-mail database to your customer database, the better you will be able to discern correlations between e-mail and selling patterns.
Obviously, digging into this piece of the e-mail equation will go a long way toward making the case for a greater emphasis on the program. It is highly likely that e-mail, combined with other marketing efforts, is making a bigger contribution than many assume.
Remember, too, to look at your Web metrics (traffic and sales) in conjunction with your e-mail metrics. First, compare your Web metrics on a day you send an e-mail to a day you don’t send an e-mail. Be sure you are looking at comparable days (i.e., same day of week, month, year). Also, compare different e-mail campaigns to see if any change in response (open, clicks) correlates to changes in traffic and sales.
Be on the lookout for a rise in traffic without a rise in sales. This may indicate a problem with your landing pages. Also, look for changes in sales in any other channels you may have, such as catalog or retail store sales. IF there is a corresponding rise, chances are your e-mail is encouraging them to make a purchase, which they’re doing, only through another channel. That’s why you should always use promotion codes and special phone numbers for e-mail to track sales through other channels. For retailers with call centers, suing a separate phone number in e-mail promotions works well to make the connection between e-mail and sales. In the brick-and-mortar world, printable coupons are an easy way to track the effect e-mail has on store sales.
Matt Blumberg is the driving force behind Return Path, an e-mail performance company. Collaborating with him on this project are his colleagues, e-mail strategists Stephanie A. Miller and Tami Monahan Forman. This article was excerpted from their new book, “Sign Me Up! A Marketer’s Guide to Creating E-mail Newsletters That Build Relationships and Boost Sales (iUniverse Inc., 2005) © 2005 Return Path, Inc. All rights reserved.
