How to increase the cost efficiency of your email marketing
In a recent European Social Media and Email Marketing study, eCircle in cooperation with Mediacom Science analyses responses from decision-makers across Europe’s six largest online markets, being asked “What could contribute to ensuring email marketing is more relevant to you in the future?” 66% of them answered “increase cost efficiency”. In this “Ask the Expert” article we wanted to come back to this and are going to give you some advice on how to improve the ROI of your email marketing mix. As it’s almost time to define your budget for next year, we thought it was the right moment to do so!
The perception of email marketing ROI is a reality for more than a quarter of companies (26%) before deciding to increase or decrease budgets (Source: MarketingSherpa 2010). In reality, email marketing has regularly proven it could be considered as one of the highest return on investment tactics in the online marketing mix. Reality is one thing and perception is another… and the thing is, decision makers will determine investments on the ROI they feel email marketing will be able to generate.
Check your budget allocation
In your online marketing budget, ask yourself how much is allocated to your email marketing activities? Do you actually spend more of your budget on your website, search, display ads or social media activities? Social media marketing is still very new and therefore, it might be benefitting from an increasing part of your budget and allocated resources. As most companies are still in the early stages of social media marketing, it’s not easy for them to define precise targets yet. Targets can be based around a variety of topics, most marketers are currently using social media for product launches, brand awareness, customer loyalty, purchases and new client wins. A good way to improve both email and social media activities would be to create connections between them and have indirect benefits on the email channel, coming from social (i.e. generate new subscribers via the specific eCircle Facebook App).
To create a cost effective email marketing mix, you should address the right questions and define what’s important for you to achieve. Therefore, we recommend that you ask yourself how much you spend on the acquisition of new contacts, if you have regular programs for it and if these addresses are profitable? Do you concentrate your efforts to warm up these addresses before actually sending them your regular messages? Do you know the average order value of your new contacts?
Another question should be: can you improve the overall results of your lists by having specific targeted messages to specific groups or automated messages? If you need experienced experts to help you find out how to have a more cost effective email marketing strategy, most ESPs offer consulting services and the investment is often worth doing!
Follow up your sales/ROI
It’s difficult to say if email marketing is producing a return on investment unless you have a reliable method for quantifying it. Surprisingly, nearly 6 out of 10 companies don’t (only 41% have a solution for doing so). Most professional broadcast tools present the key performance indicators including conversions/purchases. To be able to have all relevant information on the number of orders or average order value received from your email campaigns you should integrate your email marketing with a web-analytics tool. This enables you to have a better knowledge of the behavior of your users, and therefore allows for a better targeted and more relevant message. And that is all about having a better ROI for your email campaigns, (read our Whitepaper on Email and Web-analytics)
On average, the percentage ROI for companies which have solutions for quantifying ROI, are good, but the degree varies depending if it’s a B2C or B2B activity. The B2C marketing channel achieved an ROI nearly nine times greater (256%) than the B2B marketing channel (MarketingSherpa).
Use Email Marketing best tactics:
The success of email marketing is not only a question of money, but also a question of tactics used to drive more traffic to your website and of course to drive sales. Segment specific emails, product recommendation in newsletters and automatically delivered emails, etc… are all tactics you should use and test. To be more cost efficient you should not forget to remove your inactive email addresses (even if you paid for a lead generation campaign) as they won’t open your email communication and will lower your statistics. Getting rid of them will also help you keep your finances up as they will lower your deployment/send-out fee. However, before you do so, remember to set up a specific program to reactivate all of these contacts before deciding to remove them from your lists.
Last but not least, we wanted to share statistics from the first part of our Social Media Study from the Consumer part with you, it showed that 70% of French internet users use email to make online purchases, this number is higher in the UK (84%) and Germany (79%). So this is the proof that the email marketing channel is generating sales and ROI!
