There’s a reason why 4 out of 5 marketers say they’d rather give up social media than email marketing. With 4 billion daily email users, this marketing strategy is a powerful tool you can’t afford to go without.
However, it’s not enough to throw emails at your contact list and hope something sticks. You need to set SMART goals for email marketing to have an impact. SMART = Specific, Measurable, Attainable, Realistic and Timely.
If you’re just getting started with emails or if you want to tweak an existing strategy, there are a few things you must do if you want your campaigns to succeed.
These are our top 3 goals for email marketing:
1. Generate Revenue
An email subscriber isn’t necessarily a customer — at least not yet. The first goal of our email marketing efforts is to produce or increase revenue. This happens when you turn your database into customers or clients.
These are some Key Performance Indicators (KPIs) you should keep an eye on for this goal:
- Dollar per recipient
- Order per recipient
Dollar Per Recipient is defined as the amount of revenue you’ve earned per recipient. To calculate this number, simply divide your revenue by the number of people to whom you sent your email. If your dollar per recipient is low, it’s a good indicator that you should segment your audience and personalize your messaging.
Order Per Recipient is the number of orders you receive per person. To calculate this number, divide the number of orders by the number of people. Again, if this metric is low, you probably need to adjust your email strategy.
Revenue is the raw amount of money earned from a campaign. Note that this metric should not be the only metric you use to determine the performance of your email campaign. Revenue does not take the long-term effects of your strategy into account.
For example, sending the same email to your whole list can earn you more revenue, but the same strategy may negatively impact contacts who should be segmented out or receive different messaging. While you might make an additional 5% or more, you may be hurting the health of your list, ultimately affecting long-term revenue.
How to Achieve These KPIs
When you send personalized emails, you’re setting your campaign up for success. Emails with personalized subject lines are 26% more likely to be opened. Customers are also more likely to click a call to action if the email contains personalized content and more likely to complete a purchase when you market personalized products.
Use what you know about your customers’ behavior to send them emails they are genuinely interested in reading. AI-powered marketing tools like Personalize are great at identifying each customer’s interests based on their digital browsing habits. This information can power highly relevant email campaigns that promote the right product or service at exactly the right time.
Only send to engaged contacts
If someone hasn’t opened an email from the past 10 campaigns, you should exclude them from further emails. Leaving them on your list may eventually prompt them to mark your emails as spam.
Before you abandon hope for these contacts, you can try sending them through a sunset workflow to try to reactivate their engagement. If they don’t open an email, then they probably never will. You can also check their temperature by sending them an email during Black Friday/Cyber Monday—or whenever you have your best discounts.
Test campaign frequency
If you send too many campaigns with discounts, your contacts will start to become blind to them—a phenomenon known as “promotion fatigue”.
If you’re unsure whether you’re sending too many promotions, split your list and send one segment your usual frequency of promotions and send fewer to the other segment. Do this for a month. If dollar per recipient and order per recipient drops for the segment that receives more campaigns throughout the month, you may want to consider sending fewer campaigns. If those KPIs stay consistent, you can continue to send at your normal frequency.
Continue to monitor these KPIs throughout the year and find trends on when your contacts are open for more campaign emails. When there is a dip, adjust your campaign calendar accordingly.
2. Increase Lifetime Value (LTV)
Lifetime value is an estimation of the total revenue a customer is likely to generate for a business over the course of their relationship. Naturally, our second goal is to increase LTV by nurturing customers to purchase again.
These are some KPIs you should monitor for this goal:
- Second-time purchase rate/repeat purchase rate
The repeat purchase rate statistic measures the percentage of your customers who come back for another purchase. It is easily calculated by dividing the total number of customers who have made more than one purchase by your total number of customers.
How to Achieve These KPIs
After you’ve successfully turned a contact into a customer, your job isn’t over! Yes, you’ve won the first conversion, but what about your second conversion? What about cross-selling? Upselling? Repurchasing?
When a contact becomes a customer or client, they’re showing trust in your brand and they believe in your product or service.
However, you should target first-time customers with nurturing messages to encourage repeat purchases and increase LTV. You can use any of the following workflows to nurture these contacts:
A repurchase workflow is an automated reminder to place a recurring order, renew a subscription or replenish products. For example, if you know your skin cream product lasts a typical user two months, you’ll want your email to automatically go out about a month and a half after the initial purchase to remind the customer that it’s almost time to order more.
A cross-sell email is a product recommendation that is related or complementary to the product they already purchased. For example, if your customer bought dress shoes, you might send them an email about your brand’s shoeshine.
Upsell emails are meant to upgrade or enhance the product your customer is already buying. An example of this would be asking your customer if they want to spring for a renewing subscription instead of a one-time purchase.
3. Turn Customers into Brand Advocates
Once you’ve got a loyal customer base, it’s time to turn them into brand advocates. By this, we mean increasing the number of referred customers through referral programs.
Our KPI for this goal is:
- Referral revenue
How to Achieve This KPI
To breathe some life into your referral revenue, you’ll need to invest in a referral program. We use Yotpo and Swell to build customized programs that engage existing customers and help us reach new ones.
Referral programs like Yotpo will keep track of revenue so you can calculate your return on investment (ROI) after taking into account the cost of the program and any discount you offered. Tracking this metric will help you see the true impact of your efforts.
Once you have a referral program, you will need to promote it. You can do this with:Workflow emails
- When someone makes their first purchase, send an email to promote the referral program
- When someone leaves a positive review, send an email to promote the referral program
- Include your rewards + referral program on a new page on your website
- Promote the referral program on inserts that you include in the packaging
Taking the time to interpret your data and know your customers is a surefire way to boost engagement and increase your email conversion rate. We understand it can be a lot to take in, so if you need more guidance in the email marketing arena, our Human experts are here to help! Contact us at any time to get personalized recommendations for your company.