Like the quantitative side of email marketing and hungry to learn some new metrics you can use to improve your performance? Not so comfortable with the quantitative side of email but know that you need to be to advance your program and your career? Either way, this is the presentation for you! Concerned that it will be dry and boring? It won’t be, I promise! It will be fun and playful — and you’ll leave with the quantitative tools you need to improve your email marketing program and become a rock star in your marketing department! Why go beyond open and clicks? Because they’re nice, but if you’re like most organizations it’s revenue generated that pays the bills and keeps the doors open. Join us for this presentation to learn how to calculate and apply quantitative metrics to help you improve the effectiveness -- and profitability — of your email program. Topics we’ll cover include (but are not limited to): • Data trees • Reach Metrics • Revenue per email sent • Value of an email address • Verifying Statistical Significance Bring your questions and biggest email marketing challenges — chances are the quantitative tools that can help you solve them are here.

1. Email: Beyond
Opens and Clicks
KCDMA | February 11, 2014
Jeanne S. Jennings
Vice President, Global Strategic Services
Alchemy Worx
a 100% Email Marketing Agency
© All Rights
Reserved
KCDMA | February 11, 2014
1

2. Session Overview
• Revenue
• Conversion
• Send Metrics
• Testing Metrics
• Combining Metrics
© All Rights
Reserved
KCDMA | February 11, 2014
2

3. Revenue Metrics
Email: Beyond Opens and Clicks
© All Rights
Reserved
KCDMA | February 11, 2014
3

4. Return on Investment (ROI)
There are a couple different ROI calculations
Data
Calculation
• Source: Web Analytics
and
• Track:
• Revenue generated from
the email
• Costs, which may include:
• Marketing cost
• Cost of goods or services
sold
• Any overhead,
contribution or other costs
(salaries, operational
expenses, etc.)
© All Rights
Reserved
Revenue
Costs (Marketing or all)
• Which costs are
included varies from
company to company
• Expressed as “dollars
generated for each
dollar spent”
• So an ROI of $28 means
for each $1 spent, $28 is
returned
KCDMA | February 11, 2014
4

5. List ROI
Profitable Lists
Not Profitable Lists
• STR Teacher Express
($3.08 )
• TSO Customers ($1.03)
© All Rights
Reserved
• Teacher Newsletter ($0.59
ROI)
• SBC Red Apple ($0.43 ROI)
KCDMA | February 11, 2014
5

6. Revenue per Email (RPE)
When true ROI is difficult to track; to combat list fatigue
Data
Calculation
• Source: Web Analytics
and Email Metrics
• Track:
Revenue
Non-Bounce Send Quantity
• Easier to calculate (usually) than
ROI
• Revenue generated
• Can be used both for individual
from email
sends as well as for all sends in a
given week, month, quarter, etc.
• Quantity of email
assumed delivered (sent • If the number is very low,
calculate RPME – revenue per
and didn’t bounce)
thousand emails assumed
delivered
© All Rights
Reserved
KCDMA | February 11, 2014
6

7. Revenue per Thousand Emails Assumed Delivered (RPME)
Quarterly – all business units
Source: Client Case Study, JeanneJennings.com, Inc.
© All Rights
Reserved
KCDMA | February 11, 2014
7

8. Average Value of an Email Address
How much is an email address worth to your organization?
Data
Calculation
• Source: Web Analytics
and Email Metrics
• Track:
Total revenue generated from email
• Revenue generated
from email
• Average number of
email addresses on the
list
• Usually calculated
annually
© All Rights
Reserved
Average Size of Email List
• Benchmark for improvement
• Useful for determining how much
you can afford to spend to get a
new email address
Annual Revenue from
Email
Average List Size
Average Annual Value of
an Email Address
KCDMA | February 11, 2014
$ 12,030,960
2,023,345
$
5.95
8

9. Average Value of an Email Address
Initial Analysis After Test Period
Source
Type
A LinkedIn Ad
B
List Rental
C
Telemarketing
Cost Per Lead
$
2.28
$
5.90
$
9.48
Average Annual
Value of an Email
Estimated
Address (Current
Return on
List)
Spend
$
5.95 $
2.61
$
5.95 $
1.01
$
5.95 $
0.63
Final Analysis After Tracking Actual Performance
Source
Type
A LinkedIn Ad
B
List Rental
C
Telemarketing
Cost Per Lead
$
2.28
$
5.90
$
9.48
Actual Value of an
Email Address by
Source (Annual)
$
5.75
$
2.02
$
36.27
Actual Return
on Spend
$
2.52
$
0.34
$
3.83
Source: Leveraging the Value of Your Email List, Jeanne Jennings for ClickZ.com, June 24, 2013
© All Rights
Reserved
KCDMA | February 11, 2014
9

10. Lifetime Value of an Email Address
How much is an email address worth to your organization over
its lifetime?
Data
Calculation
• Source: Web Analytics
and Email Metrics
• Track/Calculate:
• Annual average value of
an email address
• Average time in years
that an email address
on your list remains
active
© All Rights
Reserved
Annual Average Value of an
Email Address * Average Time
Active on List in Years
• Useful for estimating future
revenue and anticipating when
performance will drop off
KCDMA | February 11, 2014
10

11. NUDGE EFFECT
Cross-channel impact of your
emails
Data:
•
Source: Purchase
data and Email
Activity Data
•
Track by subscriber:
–
Purchases
online and offline
–
Open or Don’t
Open
© All Rights
Reserved
KCDMA | February 11, 2014
11

12. NUDGE EFFECT
Take a holistic view of email success
Holistic view:
•
•
Look at those
campaigns that
may be driving
subscribers
elsewhere.
Test subject
lines that boost
store footfall at
key times.
Revenue from other channels on days when email
campaigns were sent vs. days without
© All Rights
Reserved
KCDMA | February 11, 2014
12

13. Revenue Attribution
What Revenue Gets Attributed to Email?
Four Elements of an Attribution Model
1. Action: sent, open or click (email)
2. Product(s): just those featured, those featured along with
anything else in the cart, any product (featured or not)
3. Timeframe: days, weeks, months from action
4. Order of touch: first, last, any
Define too broadly and you’re overstating revenue…
Define too narrowly and you’re understating it…
What percentage of unattributed revenue is acceptable?
© All Rights
Reserved
KCDMA | February 11, 2014
13

14. One Purchase –
Different Attribution Models
Attibution Models
Model A Model B Model C
Model D Model E
Model F
Opened / Opened /
Sent /
Action
Click
Click
Click
Displayed Displayed Displayed
Timeframe
0 days
7 days
7 days
14 days
14 days
28 days
Featured Featured Featured Featured Featured Featured
plus
only
plus
only
only
only
Product(s)
Touch
Last
First
First
First
Last
First
Total Revenue $
45 $
45 $
45 $
45 $
45 $
45
Attribution:
SEM
$ $ $ $
$
$
20
Email
$ $
15 $
45 $
35 $
20 $
15
Display
$ $ $ $
$
15 $
% Attributed
0%
33%
100%
78%
78%
78%
% UnAttributed
100%
67%
0%
22%
22%
22%
© All Rights
Reserved
KCDMA | February 11, 2014
Model G
Sent /
Displayed
28 days
Featured
plus
Any
$
45
$
$
$
45
45
45
300%
-200%
14

15. Hybrid Attibution Model
Direct
Hybrid Attribution Model
Indirect
Open or
Click
(Email)
14 days
Featured
only
Not Last
$
45
Indirect
Display
or Click
(SEM or
Display)
14 days
Featured
only
Not Last
$
45
Click (All
Action
Channels)
Timeframe
14 days
Featured
Product(s)
plus
Touch
Last
Total Revenue $
45
Attribution:
SEM
$
$ $ Email
$
45 $ $ Display
$
$ $
15
% Attributed
100%
0%
33%
% UnAttributed
100%
100%
100%
© All Rights
Reserved
KCDMA | February 11, 2014
15

16. Conversion Metrics
Email: Beyond Opens and Clicks
© All Rights
Reserved
KCDMA | February 11, 2014
16

17. Abandon Rate
Email Acquisition Process or any other Conversion Funnel
How effective is my conversion funnel?
Data
Calculation
• Source: Web Analytics
• Track: people who make
it to the initial landing
page but don’t convert
• Good to have an overall
figure from start to finish
• Tracking page-by-page
(for multi-page
conversion funnels) tells
you where you are losing
them
© All Rights
Reserved
(Unique Visitors – Conversions)
Unique Visitors
• Unique Visitors to first page of the
conversion funnel
• Conversions , the number of
people who completed the goal
action
• Signs-ups for acquisition process
• Can also be leads generated or sales
• For page-by-page analysis, next page
in the process
KCDMA | February 11, 2014
17

18. Abandon Rate
Start – Page 1
Email Address
and Name
Page 2
Lead Scoring
Questions
Page 3
Phone and
USPS Address
Any Conversion Funnel
Start - Page 1
Page 2
Page 3
Finish - Page 4
Start to Finish
Unique
Visitors
10,000
8,000
1,500
1,000
Conversion Abandon
Rate
Rate
80%
20%
19%
81%
67%
33%
10%
90%
90%
Abandon
Rate –
Conversion
Funnel
could be
better
(Goal: 50%
or less)
• Collect data after each page, not at end
• Partial info is better than no info
• Prioritize the pages
• What’s more critical – lead scoring questions or phone
and USPS address?
Finish – Page 4
Thank You
© All Rights
Reserved
• Test to lower the abandon rate on the Lead
Scoring Questions Page
KCDMA | February 11, 2014
18

19. Website Email Conversion Rate
How effective is my Website at driving Email Sign-ups?
Data
Calculation
• Source: Web Analytics
• Track:
• Unique NEW Visitors
per Month
• Online Email Sign-ups
per Month
© All Rights
Reserved
Email Sign-Ups
Unique NEW Visitors
• Unique NEW Visitors weeds out
previous visitors, a high
percentage of which have signed
up previously
• If you have acquisition efforts in
place driving directly to the signup page, you’ll want to exclude
these folks from both data points
KCDMA | February 11, 2014
19

20. Control
Website Email
Conversion Rate
Online Email Sign-up
Control
Test
Lift
Test
Website
Email
Unique
Website
Email
Conversion Revenue
NEW
Visitors Sign-Ups
Rate
Generated
5,738
748
13.0% $ 20,024
5,492
933
17.0% $ 25,494
30%
27%
30% lift in Website
Email Conversion Rate
Revenue generated
didn’t decrease, in fact
it increased
© All Rights
Reserved
KCDMA | February 11, 2014
20

21. Send Metrics
Email: Beyond Opens and Clicks
© All Rights
Reserved
KCDMA | February 11, 2014
21

22. REACH
Overall Email Program or Individual Sub-program
How much of my subscriber base is engaged with my program?
Data:
• Source: Email activity data
• Track: Number of unique
subscribers who open an email.
–
Typically measured email by
email over a Quarter and/or a
Year.
Calculation:
Open
Reach =
De-duped list of all email
addresses that opened
De-duped list of all email
addresses that were delivered
Click =
Reach
De-duped list of all email
addresses that clicked
De-duped list of all email
addresses that were delivered
© All Rights
Reserved
KCDMA | February 11, 2014
22

23. REACH
Focus on subscriber
behaviour
•
Goal depends on your
program
–
–
•
Weekly or less: 50%
Open Reach
More often: 70%
Open Reach
Look out for the emails that
give you those new Engagers
vs. attracting repeat.
© All Rights
Reserved
KCDMA | February 11, 2014
23

24. Lifecycle
of an
Email
Address
© All Rights
Reserved
KCDMA | February 11, 2014
24

25. Mobile View Rate
Source: Mobile Maintains 51% Majority; Gmail Gains 3%, Justine Jordan for the Litmus Blog, January 9, 2014
© All Rights
Reserved
KCDMA | February 11, 2014
25

26. Mobile v. Desktop
View Rate
How much effort should I
make to address mobile?
• Reported, not
calculated
• Device type as well as
operating systems
• Match your resource
expenditures on mobile
to your current and
projected mobile view
rate
• Responsive design vs.
narrow fixed width
Source: SubscriberMail
© All Rights
Reserved
KCDMA | February 11, 2014
26

27. Responsive Design
© All Rights
Reserved
KCDMA | February 11, 2014
Usually Best…
But Think it
Through
27

28. Testing Analytics
Email: Past Opens and Clicks
© All Rights
Reserved
KCDMA | February 11, 2014
28

29. Estimated Sample Size
How many emails should I send to have a good chance of getting
statistically significant results?
Calculation
Data
• Source: Email Metrics
and Assumptions
• Track:
31.38 * CR * (1-CR)
(Lift * CR) * (Lift * CR)
• Split the quantity returned
between 2 cells
• Average expected
• My rule: minimum of 20,000 per
conversion rate (CR)
test cell (over multiple sends if
necessary)
• Minimum lift you’re
looking for (Lift) Average expected conversion rate
1.0%
Minimum lift desired
Total Send Quantity Needed (Control + Test Cells)
Control Cell
Test Cell
© All Rights
Reserved
KCDMA | February 11, 2014
25%
49,706
24,853
24,853
29

30. Statistical Significance (95%)
Are my test results valid?
Calculations (Excel Formulas)
• Conversion Rate (CR: Control and Test)
=Conversions/Quantity_Assumed_Delivered
Or…
• Standard Error (SE; Control and Test)
=SQRT ((CR*(1- CR)/Quantity_Assumed_Delivered)
• Z-Score (Z_Score)
=(Control_CRTest_CR)/SQRT(POWER(Control_SE,2)+POWER(Test_SE,2))
• P-value (P_Value)
=NORMDIST(Z_Score,0,1,TRUE)
• Statistical Significance
=IF(OR(P_Value<0.05,P_Value>0.95), “YES”, “NO”)
© All Rights
Reserved
KCDMA | February 11, 2014
30

31. Statistical Significance
Are my test results valid?
Use a Free Online Calculator
•
•
•
•
Hubspot.com
TheKeystoneSolution.com
UserEffect.com
VisualWebsiteOptimizer.com
Most use Website
terminology – but they work
just fine for email (visits =
quantity assumed delivered)
© All Rights
Reserved
KCDMA | February 11, 2014
31

32. Combining Metrics
Email: Past Opens and Clicks
© All Rights
Reserved
KCDMA | February 11, 2014
32

33. Combine Metrics to Set Goals and
Prioritize Time and Resources:
Bubble Chart
© All Rights
Reserved
KCDMA | February 11, 2014
33

34. Combine
Metrics to
Identify
Areas of
Strength
and
Weakness:
Data Tree
Analysis
Source: Diagnosing a Common Email Malady: ‘Revenue Failure,’ Ed Henrich (ClickZ), March 4, 2010
© All Rights
Reserved
KCDMA | February 11, 2014
34

35. Additional Resources
Email: Past Opens and Clicks
© All Rights
Reserved
KCDMA | February 11, 2014
35

36. Additional Email Marketing
Resources (Free)
Look for Jeanne’s column on email
marketing every other Monday
www.ClickZ.com
The Alchemy Worx email newsletter;
Read past articles and sign-up at
www.alchemyworx.com/emailworx/
@JeaJen to follow Jeanne
@AlchemyWorx to follow the agency
© All Rights
Reserved
KCDMA | February 11, 2014
36

37. Additional Email Marketing
Resources (Paid)
The Premier Email Marketing
Association, part of the DMA;
Resources and Annual Conference
www.EmailExperience.org
A Private Community for Email
Marketers; Discussion Lists and
Meetups (Feel free to say I referred
you); Look for Jeanne’s monthly post on
the blog
www.OnlyInfluencers.com
© All Rights
Reserved
KCDMA | February 11, 2014
37

38. Alchemy Worx
A 100% Email Marketing Agency
• Services offered include strategy, creative, production
and deployment
• We are ESP agnostic – we handle deployment for many
clients through a variety of ESPs
• Headquartered in London; US Headquarters in Atlanta
• Founded in 2001 by Dela Quist, CEO
• Jeanne joined the team in 2013, after having her own
email marketing consultancy for 12 years
• Call us! We’d love to help make your email marketing
more effective and more profitable
© All Rights
Reserved
KCDMA | February 11, 2014
38

39. Email: Beyond Opens and Clicks
KCDMA | February 11, 2014
Thanks for Joining Us Today!
Questions?
Jeanne S. Jennings
Vice President, Global Strategic Services
404.922.7448 | JJennings@AlchemyWorx.com
Alchemy Worx
a 100% Email Marketing Agency
www.AlchemyWorx.com
© All Rights
Reserved
KCDMA | February 11, 2014
39