Back in 2009, e-mail marketing was in the throes. Other than the fact that 30% of all business-related emails weren’t reaching inboxes, most marketers damaged the relationships they had with their subscribers and gave the industry a bad name. Email marketers sent too many spammy buy now messages that maximized short-term sales at the expense of building long-term relationships that could produce much higher lifetime value per subscriber.
Fast forward to 2016 as email marketing now reaches subscribers at any place, at any time, directly on their smartphones – and smart marketers now take email marketing and email reputation more seriously. Respect your audience’s inbox. Add value before asking for the sale. Focus on what your audience wants to get from you more than the money you want from them. You’ll almost always make more money sending 52 emails a year that people look forward to receiving, with a soft sell in each, than prematurely asking for the sale and alienating a high percentage of your audience.
Automation has also become a big part of the game—making it easier for brands to focus on the specific preferences and needs of the individual, and providing them the option to choose what they receive (even if they don’t know what they are choosing at the time). Quality has triumphed over quantity and, in a way, put email marketing in a much better state.
Renaissance and ROI
Email marketing recently topped advertisers’ must-have lists of marketing technologies. In a survey conducted by dotmailer, 88% of the respondents chose e-mail marketing over SEO, social media management and CRM. Dynamic content and personalization play a major role in email’s comeback. In addition, 65% of the respondents from the same survey said they will be investing in the technology for the coming year.
Now, on to ROIs (return on investment). This is the meat of all email marketing campaigns (every marketing effort really), and the goal of course is to get more than what you paid for. According to VentureBeat, mid-sized businesses win big from e-mail marketing, with a colossal 246% ROI. On the other hand, small and large businesses receive their fair share of success with 183% and 117% ROI, respectively.
There’s a caveat, however, that comes with a thriving e-mail marketing channel: costs. Managing ESPs, email automation software, analytics and miscellaneous email marketing agency costs can be sizeable expenses. Plus, it takes time to develop new emails and new content to send, and as you know your time has value. But, with a potential profit of $5 per email that costs $1 to create, it’s hard to resist email marketing.
Taking the Right Steps
In terms of doing email marketing right, there’s not much to it: gather a large mailing list, create dynamic content that encourages interaction, and give your audience what they want. These things, however, are much easier said than done.
The first priority is building a list. You need permission to email your target audience. This is where free-mium (free + premium) offers (aka lead magnets, opt in bribes, etc.) work so well. It may be counterintuitive in business to be offering something for free, but it’s usually essential to growing your list. Popular freemiums include e-books, certain website privileges, tools… whatever you can give away for free that builds your brand while at the same time adding tremendous value for your audience. And you only give it away in exchange for the prospect’s email address.
Once they give you their email addresses, you can market to them, repeatedly, at a very low marginal cost. Which is why the ROI for email marketing is so high.
A quick but IMPORTANT side note: avoid buying mailing lists. Not only will you be paying money for a potentially stale group of e-mails, people you send blasts to don’t actually know you or your business. In addition, reputation is important in e-mail channels; the more people who report you as spam, the harder it becomes to deliver email to anyone, even those people who can’t wait to hear from you. Overall, it’s just bad practice to rent emails.
As you build your list, the next step is nurturing that list. Indoctrinate them to your brand. Let them get to know you personally and your business. Build relationships. You don’t have to know them to build relationships. What matters is that they get to know you and how your company can solve their pain points.
Start with a content calendar. This way you’re not scrambling for new content; the whole process is much simpler and well planned when you’re working off a calendar. Think of how you can help people with your knowledge, entertain them, or inspire them. Plan the year out so that you’re delivering this valuable content when it’s most timely and relevant: i.e. tax tips before April 15th, Christmas specials around the holidays, etc. To make your calendar as effective as possible, create two tiers of e-mail blasts: one that you send out with the intention of selling, and one that aims for less promotion and more about building relationships with customers.
Aim for at least a 3:1 ratio of content/relationship building to sales emails.
Now, how do you know whether all of this working is paying off? This challenge is probably one of the biggest reasons why most business owners pay email marketing companies to do the hard work for them. Nevertheless, it’s good to know how it actually works. It’s a good first step in determining if you’re paying for a good return.
There are certain metrics that every email marketer must look at: how many emails reached their intended recipients, how many of them opened the mail, how many clicked, and how many converted into customers.
Bounce Rate: A rule of thumb is that 99% of all emails should send successfully, and only 1% should bounce. There are hard and soft bounces. The former is the result of sending to an invalid or nonexistent address, while the latter is a result of a server problem or a full inbox.
Open Rate: More than anything, this is the trickiest part of customer interaction. Everything will depend on the subject line, the frequency of the email, the time sent, and the content (a subjective matter given the context). There isn’t a generally accepted equation for calculating open rates, but on average, only 17.35% of all business-related emails get past the barrier.
Click Rate: In terms of real reactions from customers, this is the metric to look at. It’s most useful when trying to determine the performance of each email in its effectiveness of driving website traffic. Look at the click through rate to determine whether the content within the email itself was compelling enough to get people to take one small step, whether it’s reading your article, viewing your video, or viewing your offer.
Conversion Rate: This is at the bottom of the barrel, and not because it’s the least important, but because it’s the hardest to achieve. What do you want people to do? Sign up for an event? Call your business? Buy from your online store? Those are the conversions. Make sure you have a system in place to measure how many conversions your emails are generating. You can use coupon codes, call tracking, Google Analytics. Pick a method and be religious about tracking results.
In the end, however, it’s the sales that matter. Regardless of the number of clicks, feedbacks or how many participated in the contest, it’s important to convince a customer to actually buy something. This hinges on targeting the right market and showing them what they are most likely to buy, and the quality of the content. This is when you compute for the general ROI.
The equation is: [($ in additional sales – $ invested in the campaign) / $ invested in the campaign] * 100. If successful, the number would exceed 100%, proving that email marketing is twice as valuable as the amount of money put into it.
Is It Doable?
Everyone starts at zero with email marketing. With a small amount of recipients, and very limited knowledge about the technology and best practices, it can be a struggle to build momentum. Here’s what not to do: don’t try sending emails from your gmail or settle for the least expensive email marketing software.
You may not need a full suite marketing automation system, but use a program like MailChimp or ConstantContact to easily create branded, highly professional emails. These software programs also come with many automation features that will save you and your staff time.
Get a Free Email Marketing Plan
So, where to start? I obviously wrote this post for a reason as an email marketing consultant, so here’s my freemium offer to you: Contact me today by simply writing to email@example.com or fill out the form on this page here and let me know you’d like a free email marketing plan.
You’ll get a full recommendation on the software to buy (no affliliate stuff), strategies to grow your list, and ideas for your calendar, as well as pricing for the tools you’ll need and done-for-you service.