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Dec 05, 2005
How To

Average Email Marketing List Size Growing by 40% Per Year: Four Steps to Optimize Response

SUMMARY: Anybody who tells you email is a dying beast doesn't know the numbers. In this interview (originally published in Ad:Tech's Speaker Newsletter) MarketingSherpa's Research Director recaps the highpoints of his New York speech. Includes the four best tactics (based on researched data) to improve your current email program results. If you're planning to test any improvements for your email campaigns in 2006, these four tactics should be included.
"Reports of email's demise are greatly exaggerated," says Stefan Tornquist, Research Director for MarketingSherpa.

In fact, new list growth findings indicate consumers' interest in receiving email newsletters and sales alerts is growing at a healthy rate.

While numbers vary greatly across industries, on average lists are growing by 5.2% per month. With an average attrition rate of about 2% per month, that leaves an aggregate growth of about 3.2% per month, or 40% per year.

Although open rates have dropped by about 20% in the past year, Tornquist says that is probably a function of mis-measurement rather than a real decline in people reading email.

"Looking at both clicks and conversions, there are improvements in some areas and drops in others; overall they're stable," he says. That suggests that opens aren't getting recorded.

He explains: When an HTML email gets opened, an invisible image is served, and opens are recorded when that happens. So when the images are disabled as in Outlook 2003 and Gmail, it's impossible to record the open. On the measurement side, it's like serving a text email, he says.

On the subject of spam, Tornquist identified two opposing trends.

“Email is such a routine part of daily life that we seem to be getting used to the hassles of spam. The percentage of people who report they are less trusting of email because of spam has dropped by roughly 10% in the last year, and we expect that trend to continue,” says Tornquist.

On the other hand, he notes several studies that show that email users are defining spam more broadly as time passes. He notes that “58% of email recipients define spam as communications from companies they do business with, that come too frequently.”

We interviewed Tornquist on the steps marketers can take to ensure their email campaigns get the best response possible.

Step #1. Focus on the beginning of the relationship

People who have been on a list for less than 90 days -- better yet, under 30 days -- show the highest rate of response. And welcome messages get nearly twice the response as regular email.

"Welcome messages don't get fully utilized," says Tornquist. "Very often it's just, 'Welcome to our list, look for our next issue.' That's really punting."

Consider including the latest issue of the newsletter as the welcome message or use a coupon or specific offer upon which they can act immediately.

Or try autoresponders for that first period of interaction: when somebody becomes a member of your list, send a series of emails once a week for the first 60 days with the best content from the last couple of years.

Step #2. Selecting the best email frequency

Email marketers have known for years that only email with "useful" content will be opened and read. They have spent money on copywriters and invested energy discovering what type of content their consumer wants to read.

But consumers want more than just good copy. They want control over how it is delivered to them. Marketers with the best response rates focus on the following:

a. Frequency -- are we mailing too often?

Top marketers are working with their readers to discover the optimal frequency.

That doesn't mean allowing them to choose a specific frequency (once a week, twice a week, once a month, etc.), because you run the risk of a reader missing something truly relevant if they’ve already reached their email limit.

Rather, allow consumers to choose how often they are contacted by letting them identify what is relevant to them: offer lists of topics so they can choose the amount of communication in terms of relevancy, not frequency.

Interestingly, those email marketers who offer a high level of control actually send emails more frequently than those who don't. Tornquist explains. "If I'm given a list of topics, and that list is extensive and interesting, then I'm going to click and ask for more emails on a variety of subjects."

So are we emailing too often? Most marketers are, but only because they're not delivering the right content to the right people. "The whole thing about frequency is that it really depends on segmentation. The whole list is not a monolith that should get one same thing every month."

b. Information blast vs newsletter – preferences centers

"One consumer might want to see one email a month with a 'laundry list' of all the articles they can choose from," says Tornquist. "Another person might want one article a week."

Find out what your readers want through surveys, segmentation and testing, then deliver it.

c. B-to-B marketers are not exempt

While frequency is not as big an issue for these marketers -- they tend to mail less often -- good copy is still a problem. "We see that a lot of the content itself is somewhat dry, especially in the B-to-B companies that have been doing them for five years or longer. They're having a hard time coming up with new things to say."

For ideas on what your customers are really interested in, take a tip from your B-to-C counterparts: check your search logs from your site to see where their interest lies.

B-to-B companies that mail very infrequently, less than once per quarter, are seeing a drop in open rates because their mail is going unnoticed among the noise. Tornquist recommends getting on a regular schedule of mailing. You don't necessarily have to mail more often, he says, but mail regularly.

Step #3. Getting past filters – avoiding false positives

False positives -- when a company's legitimate message is blocked -- are a big deal today, says Tornquist. "A recent Pivotal Veracity study found that 54% of retail marketers were affected."

In the retail world, you know it's happening because you can see that all your Hotmail addresses, for example, aren't going through. It's harder in the B-to-B world, because the filtering happens behind firewalls, and you don't know it unless someone tells you.

If you see marked changes in open rates or clicks, try testing a text message and see if that increases your stats. If so, your HTML emails are probably being blocked.

Shockingly, a recent study from Silverpop shows that 78% of companies are not asking people to whitelist, yet whitelisting remains a top way to ensure you won't be labeled a spammer and filtered.

Tornquist suggests including a link, with instructions, in every email. "Usability studies show that if you provide instructions it increases response, even when the instructions are very simple."

Step #4. Test landing pages

"Landing pages are a huge part of our interaction with consumers," he says. And, by testing and tweaking email landing pages, you can impact conversion rates by 40% on average. Classic A/B tests as well as multivariate tests are being conducted by sophisticated emailers. Key tests include:

o Matching the headline copy to the email link and offer copy more precisely

o Matching the “submit” button copy to the headline copy

o Matching images, especially product or offer “hero” shots, from the original email creative as precisely as possible

o Simplifying layout to remove extraneous links, multiple column formats, raise typeface point size, and generally “dumb it down” for the easily-distracted eye

Useful links related to this article

Behind-the-Scenes in the Booming Email Service Provider Industry: Why Are Some Clients Complaining? http://www.marketingsherpa.com/sample.cfm?contentID=3132

MarketingSherpa's Email Benchmark Guide 2006 http://www.sherpastore.com/Email-Marketing-Benchmarks-Conve
sion-Data-2006.html


Note: Stefan Tornquist spoke on email metrics at November's AD:TECH in New York. For information about upcoming shows in 2006, visit http://www.ad-tech.com/

See Also:

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