Nick Martin's Marketing Pages

Email marketing maturity profile?

The latest research from Marketing Sherpa, looking at the most commonly utilised performance metrics by maturity phase of the email marketing enduser, provides some interesting insights into how deeply practitioners systematically measure. 

Of particular interest is seeing the proportion of endusers who do not measure things, even at the mature, strategic, end of the scale. Take a look at the following graph:

So, 40% of mature users don't analyse the different link click-throughs; 56% don't look at the performance of different data segments; and 38% don't or can't analyse post click conversion rates.

This fresh-to-release  study, conducted a few months after the European benchmark survey I authored for FEDMA last year, reminded me of some of the key conclusions of that earlier report. Strikingly, users who had considered themselves strategic email marketing practitioners hadn't projected that sense of savvy when it came to campaign performance practise. Those who saw email marketing as strategically important for their organisations nonetheless often had poor visibility of metrics such as conversion to sale and conversion to action.

With just 16% of campaigns entirely data driven, and 38% of campaigns driven by some data, it is apparent that there is a way to go before the critical insight and testing necessary for optimising the email marketing channel is systematically practised.

Even when metrics are in widespread use, such as delivery rate, are practitioners really measuring in full awareness and knowledge? Most practitioners will determine deliverability as delivery to Internet or to mail server as the primary measure (i.e. less the hard and soft bounce codes), but delivery to inbox or Inbox Placement Rate (IPR) is a far better measure. Why? Because around 18% of email never ends up in the Inbox, or even in a Spam folder; nor  is it accounted for in the bounce data. It simply disappears, into a virtual Bermuda Triangle. The worse your reputation, the greater the problem. 

Much in the same way practitioners focus on improving their click through rates, they must also monitor, manage and take steps to continually improve their reputation to improve IPR, campaign performance and user engagement.

What this evident gap in email practise perception and reality truly highlights, is that whilst we tend to view email as a mature marketing channel, there is still a way to go to master it. Whilst email may have been around as a viable marketing channel for more than a decade, we are far from the point where outstanding direct marketing disciplines are routinely applied to it, and where the nuances of the medium are yet globally understood and managed.

Customer Management Trucks

Apple CEO Steve Jobs recently made a comparison between PCs and trucks, vehicles that once dominated the car market in the US, but which got killed by smaller cars as the US consumer got real.

In an article in the WSJ, Mr. Jobs said computers, including Apple’s own Macintosh, won’t go away, just as trucks didn’t disappear. But he suggested that sleeker portable products such as his company’s iPhone and iPad would be the equivalent of cars—offering touchscreen Website browsing, droves of applications and other features not found on PCs that run Microsoft Windows.

Arch rival Microsoft reacted negatively to the pronouncement, after all laptop shipments are still showing double digit growth rates. Yet Jobs is simply facing up to the reality of a changing world.

And so to the analogy: in business, we have witnessed just as profound a change in the challenges that confront CMOs in the face of the mind-blowing explosion of online and interactive channels; increasingly important social media with the potential to become as significant a source of demand as Search; in short the most radical market-led upheaval we’ve ever experienced.

You’d wonder whether the same tools and platforms proposed by marketing services providers that promised tremendous business improvements just a few years ago might be struggling to make an impact in today’s shifting landscape. You’d be right to.

Forrester, in a report entitled Campaign Management Needs a Reboot (April 2009) highlighted how platforms were struggling to keep up with business change: 

Today the notion of campaigns extends beyond traditional communication channels to include emerging and inbound channels like mobile, Web sites, landing pages, and social networks. Campaign management applications struggle to keep up with the design, management, and reporting needs of these channels. But an explosion of channels is only one of the many challenges that threaten the relevance of campaign management solutions. Campaign management tools also struggle to:

·       Improve cross-channel customer interaction. 

·       Make sense of the social phenomenon.

·       Lack defined processes and methodologies to use social insights to improve marketing campaigns.

·       Marketing campaigns no longer have finite start and stop dates. 

·       Social media channels and customer conversations.

·       Lower the learning curve associated with technology adoption...As one direct marketer said, “The complexity of the system makes it hard for our distributed stakeholders to build and execute campaigns and increases dependence on our small group of power users.” 

Forrester’s perspective is that there are too many different platforms that make it hard to integrate, leading to missed business opportunities, poor customer experiences, and inefficient program execution.

Whilst I agree with the analysis, I disagree on this conclusion. On the one hand, multiple marketing execution platforms tend to make it harder to integrate and measure the vast range of engagement activity that marketing has to deploy across. On the other hand the solution isn’t to create one meta marketing platform. Software rarely shines when it’s asked to do many tasks in one. Marketing users hate ‘integrated’ platforms that attempt to do everything, because they’re hard to use, overly complicated and tend to be too rigid. 

Specialisation is the name of the game. Solutions for lead generation that work on demand pull principles are a totally different proposition to campaign managers that are designed for push marketing applications. 

In the world of multi-channel integrate marketing, the execution platforms can be managed in house, outsourced or rented - in the form of SaaS or cloud computing. Frankly, it doesn’t matter in principle. What matters more in practise is which platform suits the business needs best, and complies with their policies in regard to security, control, strategic and privacy imperatives.

But how to integrate effectively, in order to deliver the vital operational improvements whilst allowing the organic and fluid nature of marketing communications to follow its customer-led path of least resistance?

The answer lies not in embedding rules engines, data management et al into campaign management and other marketing execution tools. That’s yesterday’s model and simply reflects the established order: one of channel specific siloed organisational structures where marketing teams are responsible for online, for direct mail, for contact centres and so on. 

What's needed is a much broader marketing biosphere, which comprises 3 key areas:

1. Data management, analysis and rules definition

• Design of the data model, single customer view creation, activity data, semantic web data.
• Analysis and segmentation
• Rules engine

2. Marketing Activity Management

• Document processing
• Digital asset management
• Marketing workflow automation
• Resource management/ web-based utilities

3. Marketing execution

• Campaign managers
• Email/ SMS platforms
• Networked lead generation deployment & settlement platforms
• Online advertising network platforms
• Social network solutions
• etc.

The centre of gravity in creating a truly effective, flexible, adaptable customer communications management environment lies in getting the first two areas correctly architected. Herein lies the solution to true multi-channel integration, an approach that can be orchestrated manageably.

 

It means that wherever the media explosion takes us, however many new and unpredictable IP enabled channels open up, the means to be able to simply integrate them exists; using the right data, content, channels, technology and people.

 

More specialisation around execution, not less, is likely to win out. Fees associated with those platforms will continue to fall, as users pay for what they actually need and use, safe in the knowledge that their marketing biosphere is in place, ready to meet with every fresh challenge. 

Email marketing on a wing and a prayer

Email marketing is poised for strong growth this year at the further expense of traditional offline channels. 

Having recently completed the survey analysis and report for FEDMA, here are some key excerpts. You can purchase the full report from FEDMA here.

In FEDMA’s first European Email Marketing Benchmark report published in April 2010, 19% of the respondent Email Service Provider (ESP) base expected their clients to increase volume of email marketing between a quarter and a half year on year; a continuation of the shift from offline to digital channels.

Hardly surprising when you consider the results of the Ipsos Mori poll for the Chartered Institute of Marketing’s report,The Shape of Digital to Come?. The question was asked which activities delivered the best return on investment. Top of the charts came CRM by some margin, followed by online advertising (12%) and email marketing (11%). Those activities considered to deliver the worst return were direct mail, sponsorship, and internal marketing, mirroring the evident shift in spend.

Econsultancy’s Email Marketing Census 2010 also predicts a net increase in email marketing over the course of the year, with the greater proportion coming from retention marketing, where 71% expect to ramp up their activities in this area, and only 1% expect to reduce activity on email marketing activity to their customer base. This reflects a growing recognition that email marketing is the perfect medium for customer management and development, and a key component within integrated multi-channel consumer engagement.

To that end, newsletter and related customer management activity is likely to be a key growth area over the next 12 months. This is reflected in the difference in click through rates reported in FEDMA’s Email Marketing Benchmark Report 2010 between newsletter and sales or product/service information campaigns, which average 17% higher. 

Practitioners need to plan use of email marketing more strategically to gain greater payback from ongoing customer engagement and the up and cross sell opportunities arising.  For example, 53% of respondents to FEDMA’s report do not use email marketing for customer or product (development) surveys. Where they do, they experience excellent results.

The majority of companies do not use email marketing for win-back campaigns following the loss of customers. The minority of respondents who do use email for win back see conversion to sale or action of between 2% and 5%. Nor do they systematically use transactional emails for cross and up selling.

In both cases here are clearly opportunities missed, which once again suggests that email marketing is deployed typically as a series of standalone activities, in some cases integrated with online and other channels, but generally not implemented as an end-to-end programme or integrated with other customer channels.

Whilst end users overwhelmingly believe email marketing to be strategically important, that belief is yet to translate into a rigorous approach around execution.

  Poor visibility of conversions to sale and conversions to action, and the lack of testing around aspects such as creative templates and frequency suggests there is much more critical measurement and insight needed. Practitioners would do well to test more rigorously each element of an email campaign, beyond the generally adopted focus on subject lines, sender name, time of day and week, and spam filter scoring. 

Continued growth may well be anticipated and planned for by the majority of respondents, but it should not be assumed at any cost. The future growth – and health – of email marketing will depend on some key factors:

 

• Better targeting, measurement and the use of properly permissioned and managed customer information databases and lists; the relevancy of campaigns and careful application of local/ EU laws.
• Careful stewardship of customer information, and developing its use further into the consumer/ buyer engagement process. The impetus to increase volume and activity can only be successfully achieved where it remains engaging.
• Delivery to inbox, which will be increasingly seen as a barrier to overcome, especially in B2C.

Whilst Deliverability rates are optimistically expected to improve or remain the same, this raises a key question of how deliverability is measured.

Most practitioners will determine deliverability as delivery to Internet or to mail server as the primary measure, but delivery to inbox or Inbox Placement Rate (IPR) is being seen as an increasingly key metric. 

IPR is tied in with reputation. If reputation is poor, acquired through issues like indiscriminate use or poor targeting, large groups of consumers belonging to the same ISP domain, for example, such as GMail or Hotmail will not receive bulk email from that source into their inbox. It is estimated as a much as 7% of email marketing campaigns go missing, which historically has not been accounted for. 

Marketers need to understand what their reputation is, and much in the same way they work to improve their click through rates, they need to monitor, manage and improve their reputation. If ISPs migrate from identifying sender by IP range to identifying the sender by their domain name, as some commentators believe may have already started to happen, this issue could become even more significant.