Utilizing Email Metrics to Build your Business Case and Enhance Performance

Utilizing Email Metrics to Build your Business Case and Enhance Performance Simms Jenkins Founder & Principal BrightWave Marketing & EmailStatCenter.com sjenkins@brightwavemarketing.com 404.888.0133 www.brightwavemarketing.com www.emailstatcenter.com

Today s Agenda Current State of Email Marketing Metrics Selling Email Marketing with Statistics Using Metrics to Enhance Performance Email Metric Resources

Background 5 year old Email Marketing Services Boutique Firm Specialize in creating, auditing, enhancing and managing Email marketing programs that cut costs, drive revenue and build relationships Recognized as one of the leading email service firms in the industry Featured in dozens of industry publications, including Bloomberg TV Created, with the eec, EmailStatCenter.com, leading email research and metric portal for email marketing practitioners Contributor to imediaconnection, dozens of email industry related articles One of the top 21 email marketing information sources - Email Marketing Reports.com Forthcoming book on email marketing best practices and tactics Platinum Member & Silver Sponsor of Email Experience Council BrightWave Marketing s appearance on Bloomberg TV

BrightWave Marketing Clients

State of Email Marketing Metrics

State of Email Marketing Metrics EmailStatCenter.com s First Annual State of Email Metrics Survey conducted August - October 2007 95% of email marketers measure results 56% measure immediately after campaigns while 48% and 44% measure weekly and monthly, respectively only 18% measure annually Survey respondents said it was very important to measure email campaigns in order to improve results Respondents ranked email metrics by importance : 1. Click Through Rate 2. Deliverability 3. Conversions 4. ROI 5. Open Rate 6. Revenue 7. Total Subscribers 8. Forwards Only ½ of email marketers are using email metrics for budgeting/forecasting purposes Biggest Metrics Challenge = Lack of standardization

Selling Email Marketing

Email has Reached Mass Adoption Email has reached almost universal penetration, with 97% of consumers & 94% of marketers using the channel - Forrester, 2007 Nearly 170 million people in the U.S. will use email in 2007 - emarketer, 2007 83% of marketers choose email marketing as the most important advertising media they planned to use in 2007 - Datran Media, 2007 81% of marketers plan to increase spending on email marketing in 2007 - Alterian, 2007 94.5% of retailers surveyed are building bigger opt-in lists and 64.7% are conducting more email campaigns than a year ago - Internet Retailer, 2007

Email Reaches the Big Spenders People who buy products advertised in emails spend 138% more than those who don't - Forrester Research, 2007 90% of consumers use email to engage in and determine the value of a relationship with a company - JupiterResearch, 2006 50% of the shoppers surveyed said they used emails to make purchases; 50% said email had some influence on their shopping habits - Return Path, 2006 50% of consumers who open and read email marketing messages are also likely to purchase other items on impulse - Forrester Research, 2007 47% of consumers who think email is a great way to find out about new products or promotions are willing to pay a premium for products that save them time and hassles - Forrester Research, 2007 40% of email subscribers will go "out of their way" to patronize a company whose email programs they like - Quris, 2006

Email Marketing Delivers ROI For every dollar spent on Email marketing in 2007, marketers can expect an estimated $48.29 ROI. -- DMA, 2007

Email Marketing Delivers ROI Email Marketing Outperforms Other Media Email delivers one of the lowest costs per order Email's ROI index is 70 percent higher than any other direct-response marketing vehicle - DMA, 2006 83% of marketers surveyed said that they thought 2007 ROI for email will increase over last year. - Datran Media Research, "The 2007 Email Marketing Survey: Looking Forward" 45% say best performing online advertising tactic is emailing your inhouse list - CMO Council, 2006 B2C marketers will spend 11% of total marketing budget on email marketing in 2007 - DMA, Nov 2006 B2B marketers will allocate 6.5% of their marketing budget to email marketing in 2007 - DMA, Nov 2006 $80 $70 $60 $50 $40 $30 $20 $10 $- $7.00 Email Cost per Order $17.47 Affiliate Programs $26.75 Paid Search $71.89 Banner Ads Source: Shop.org, State of Retailing Online 2007 report Sept. 2007

Using Metrics to Enhance Performance

Metrics Indicate Lack of Analysis 70% of respondents said they apply basic or no analysis to any of their email campaigns. -- Alterian, 2007

Ideal State - The Metrics Scorecard Establish goals upfront - revenue, page view, in store traffic, conversions, retention, subscribers, etc. Create a monthly scorecard Benchmark against industry Focus on ROI go beyond click throughs and open rates A high open rate with zero sales is irrelevant Evaluate newsletters and promotional mailings differently Revisit goals and results Remarket based on metrics Recommended Metrics for Success Overall Goal Success Metric Industry Average COMPANY current state COMPANY desired state a) Drive Revenue Revenue NA $10,000,000 $22,500,000 a) Drive Revenue ROI $57.25 $20.00 $40.00 a) Drive Revenue Conversion Rates.13% 0.50% 1% a) Drive Revenue Value of Email Subscribers NA $2.00 $3.00 (# of subs/revenue) b) Customer Loyalty Total Email Subscribers NA 5,000,000 7,500,000 b) Customer Loyalty Unsubscribe Rate.29% 0.15% < 0.10% b) Customer Loyalty Customer Frequency (average monthly visits/average monthly unique visitors) b) Customer Loyalty Customer Retention (% of site visitors returning to website) c) Brand, Product, Feature Awareness c) Brand, Product, Feature Awareness c) Brand, Product, Feature Awareness NA 1.2 2 NA NA Begin to track, initial goal should be 25% Open Rate 20.77% 26% 30% Click Through Rate 5.32 8% 12% Deliverability 96.9 94% 97%

Metrics Indicate Creative Challenges Fewer than 50 percent of marketers create emails that render appropriately - Email Experience Council, 2007 59% of online customers routinely block images - MarketingSherpa, 2007 One in five emails are invisible and ineffective due to blocked images - Email Experience Council, 2007 34% of marketers surveyed said that creative optimization had the most impact on email campaigns - Datran Media Research, 2007

Email Without Image Suppression

Email With Image Suppression On

Without Image Suppression

Optimized for Image Suppression

Creative Optimization Guidelines Be concise with a clear call to action above the fold Consider fact that many are starting to view emails on BlackBerrys or other mobile devices Limit graphics Ensure call to action and links are formatted as text. Avoid postcard style messages. Add a link so readers can view the message as a Web page 6-10 links generate the highest response - Silverpop, 2006

Creative Optimization

Metrics Indicate Targeting Opportunity Engaging your audiences in more relevant communications increases net profits by an average of 18 times over broadcast mailing. -- Jupiter Research, 2006

Targeting Misses the Mark 46% of internet users say commercial emails they receive are not targeted to their needs - emarketer, 2006 ¼ of marketers surveyed are sending broadcast email campaigns with no differentiation or targeting - Jupiter Research, 2006 Only 65% are using limited personalization, such as using a customer's name, and limited segmentation, such as demographic targeting or using geo-targeting to identify a local store - Jupiter Research, 2006 Only 11% of marketers send targeted campaigns that use a customer's purchase history, click-stream activity, or other data to send a relevant, targeted offer - Jupiter Research, 2006 Other Areas To Target & Test By Domain/ISP, Customer vs. Prospect, responder vs. non responder

The results say target! How targeting affects campaign performance 35% 33% 30% 26% 27% 25% 20% 15% 10% 20% 9.5% 9.3% 9.3% 14% Open Rate Average CTR Average Conversion Rate 5% 0% 1.1% Untargeted Broadcast Emails 2.3% Lifecycle messaging campaigns 2.3% User-triggered campaigns 3.9% Clickstreambased campaigns Source: Jupiter 2006

Metrics Indicate Blind Spot In Campaigns Only 15% of companies that sent opt-in email messages answered subscriber responses to their own emails - BrightWave Marketing, September 2007 34% of email queries went unanswered when reviewing eretailers email response during customer service - Talisma, September 2007

Close the Loop Don t Forget Email s Place in the Customer Communication Loop Audit your campaigns and website Revaluate where replies/inquiries go Automate Consider CAN-SPAM Issues Consider Missed Sales Opportunities Consider Brand Damage

Metrics Indicate Need for Centralization Only 38 percent of executives said their email messaging endeavors are centralized in one location, with 24 percent citing that six or more departments manage it separately. -- Jupiter Research, 2007

Why Centralize? Maintain Coordination & a Holistic View of Metrics Manage Frequency & reduce email churn Standardize from lines & subject lines Maintain brand cohesiveness & a messaging strategy Ensure CAN-SPAM Compliance

Email Metrics Resources

Benchmarking & Research Sources Bronto http://bronto.com/stats/ 14 industry verticals Open, CT & Delivery eec www.emailexperience.org Groundbreaking studies on timely email issues eroi http://www.eroi.com/roi_resources.htm Quarterly & Seasonal Studies Internet Retailer http://www.internetretailer.com Frequent detailed metrics from the email retail world Lyris http://www.lyris.com/resources/reports/index.html Quarterly Deliverability Reports ReturnPath http://www.returnpath.biz/resources/ Seasonal Consumer & Deliverability Studies Silverpop http://www.silverpop.com/practices/studies/index.html Ongoing series of topical user based studies

EmailStatCenter.com StatShare free newsletter 40 Categories Hundreds of Metrics User Generated Metrics Searchable Database

RetailEmail.Blogspot Detailed Reports Daily trends on top retailers

Questions & Answers Simms Jenkins BrightWave Marketing & EmailStatCenter.com 404.888.0133 sjenkins@brightwavemarketing.com