Marketing sans spamming: easier said than done

20 Dec ‘17

Marketing by email is inexpensive – and exceedingly popular. In an effort to increase profits businesses send ever more emails to leads and prospects. On the flip side, email marketing is more and more often seen as spam.

«We realize we’ve been burning out our lead base.
We wish we could’ve been sending less — but each time we tried that our revenue decreased.»

Marketers

How come?

If you google the most common reasons for unsubscribing, the hits will be the same all over.  Too often, too many emails, too often, inbox swamped, too frequently

The message is clear: people don’t like frequent mailings.

Okay, what about the gains?

The vast majority of businesses evaluate the efficiency of email marketing just like they do with any other channel: using Google Analytics.

Due to the low cost of the email channel many businesses fall into the trap of evaluating efficiency by GA.

Increasing lead generation via other channels always comes with a price tag. On the other hand, cranking up the sheer volume of your marketing mailings is nearly free. And due to the specifics of the attribution and data collection methods, the numbers look good. It’s easy to get tricked into believing that email works just as any other channel.

  • Paid search – conversion rate 1.13%
  • Email – conversion rate 1.38%

Looks familiar and reassuring. But shouldn’t conversion from emails be significantly higher?

Email is different from other marketing channels. One’s inbox is one’s personal space. The conversion rate of 1.38% in GA means that 99.96% of all messages got into people’s email without any positive effect for the business.

Let’s assume your online store has an optimistic purchase rate of 3%. This means the overall conversion rate via the email channel is 1.38% x 3% = 0.0414%. That’s only 414 of every one million messages leading to purchase.

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So is this okay that the overall conversion rate from direct communication is only 0.004%? Judging by the fact that everyone calls it «spam», it definitely isn’t.

Heavy email bombardment does precious little to get large numbers of customers interested in the product and the brand. It only helps to catch the outliers.

There is always a handful of prospects who tolerate frequent mailings well, are very loyal to brand, or have already decided to buy the product. It is this small fraction of the audience that shows up in the positive stats.

When the volume of mailings is reduced, the number of these outliers drops, resulting in GA showing decreased revenue. There is no reason to panic, however. First, this decrease is usually only temporary: in the long term, the revenue typically rises, thanks to the lower unsubscription rate and increased LTV. Secondly, it’s a good indication that adopting a segmented approach is in order.

What’s to be done?

1. Add a new metric to your GA revenue metrics

In order to balance your revenue metrics, add to them one of the following:

  • Revenue per sent email.
  • Conversion to purchase from sent emails.
  • Unsubscription percentage (the number of the unsubscribed / the number of recipients of at least one mailing per given period; it’s important not to calculate by individual mailing).

A marketer who strives to increase the revenue without drops in conversion and hikes in unsubscription will sooner or later figure out the important trends in the customers’ behavior. This can take time but in the end inevitably leads to positive results.

2. Get ready to accept short-term losses to gain in the long term

In today’s world, things change fast. In order to grow, one must be able to respond to these changes, seek the right answers, and gain new knowledge every day.

How to gain new knowledge? By trying new things and experimenting with new ideas.

Not all experiments immediately bring useful results, but in the long term they lead to growth.

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An excellent example is booking.com, where marketing decision-making is based on data analysis. The company views the number of sales lost due to AB testing and other experiments falling below a certain level as a warning sign. That is, they consider it poor strategy to reduce losses by cutting on experiments, since it translates into a slow-down in innovation.

Losses due to experiments are normal. They are actually good investments and a mark of the company’s evolution.

Of course, this should always be offset with common sense. It’s crucial to set the boundaries beforehand and monitor all important parameters during the testing. But being afraid of experiments because something can go wrong is a direct road to stagnation.

What does Mindbox do?

We strive to make marketing more socially conscious, so the customers could appreciate the opportunity to learn about a product or brand instead of complaining about another useless ad or spam.

One step toward this goal is automatic frequency control. We have developed an algorithm that increases or decreases the frequency of mailings based on the behavior of individual customers. Some of our clients kindly agreed to test it, and the results demonstrate that we are on the right track!

Over the next few months we are going to add this feature to our product and publish the results of testing. If you are our client and wish to participate in the testing process or see the results earlier, please write to us.

Talk to people, not to the traffic!

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