Focus on what moves the needle and don’t overcomplicate your email & SMS marketing program.
I see marketers constantly confused and in a spin at how to measure the effectiveness of their email marketing efforts.
Instead of refining their strategy and optimising key growth levers, they end up lacking focus and building convoluted workflows that are cumbersome to manage.
This article will provide a framework for how you should master your CRM strategy and literally never run out of areas of what to focus on next.
I’ll be using an alias case study of a company called, let’s say “Evolution Supplements” to illustrate my point.
Email marketing is fun when there’s infinite improvement and never-ending progress.
The Questions Every Email Marketer Needs to Ask (Clients and Themselves)
If you’re working with an eCommerce brand and onboarding them for the first time, you need to ask 1 simple question the day you onboard the client.
Adam: “What are your business goals?”
Evolution Supplements: we want to increase revenue (profitably).
In 99% of cases in email marketing, the brand is going to say “Profitable Revenue”.
We’re off to a flyer but we want to dig a little deeper.
Adam: “I understand profitable revenue is of utmost importance to you but are there any other areas of your business that we can support you with? Email is a fantastic channel to collect UGC, deploy qualitative research, de-risk product launches, support acquisition and build communities. Do you have a secondary focus you’d like us to assist with?”
Evolution Supplements: “Come to think of it, we SUCK with UGC. We haven’t got the budget to pay for influencers and we aren’t sure where else to look. This would definitely be an area we need support with.”
Awesome. We now know very clearly the brand wants to focus on PROFITABLE REVENUE and USER-GENERATED CONTENT to support their business. If we can create a strategy around maximising this, they’ll be super happy.
We now need to ask ourselves two straightforward questions on a high level:
What will move the needle on profitable revenue most effectively in email marketing?
What strategies will allow me to maximise profitable revenue?
Let’s answer each of these.
How to increase profitable revenue with email marketing
To scale an email program, you need some fairly obvious fundamentals in place to increase performance.
- Proven product-market fit that customers get results from/enjoy: they aren’t coming back if the products suck
- A strong acquisition funnel: you’re limited to what you can work with. If there are no leads and customers entering the account, your strategy won’t be effective
Let’s assume that the brand does have product-market fit and a strong acquisition funnel bringing in customers. We now need to know which metrics and elements to track in order to increase profitable revenue MoM and YoY.
The core components are:
- A bigger email & SMS list to target more people (more reach/impressions = more revenue opportunities)
- Better inbox placement (deliverability) to ensure our messages reach as many people as possible
- Traffic returning to the website from email (total clicks)
- Optimising Average Order Value (AOV) with a strong contribution margin across first purchase and repeat sales
- Maximising Customer Lifetime Value (CLV) and if possible, as fast as possible to improve cash flow into the business
Now that we know what metrics to focus on, we’re good to focus on the strategies that are going to take us to our desired end result.
What strategies do I need to deploy to maximise these metrics?
Let’s deal with the key goals one by one and look at the most effective strategies to achieve our goals.
Goal: Increase list Growth over Email & SMS
Proposed Strategy: Optimise Signup forms & co-marketing partnerships
The Why Behind the Strategy: As an email marketer, your job is to capture as much traffic to the website without harming conversions. Re-read that last sentence again as it’s important.
We don’t control external traffic coming to the website, but we can definitely implement systems to expedite list growth and need to be ruthlessly testing creatives and offers on a monthly basis.
If you already have a signup form in place, don’t settle for a 3% opt-in rate - test it aggressively until you’re above 6%. It compounds month-over-month to make a massive difference to your database.
Imagine having 100,000 visitors to your website per month and you capture 3,000 of them. An increase to 6% would double that to 6,000. Over the course of the year, that’s 38,000 more profiles to retarget! You can’t sleep at night unless you’re ruthlessly optimising this area of your business.
Same with building out your SMS database. Build this in tandem to your email list by setting up returning customer signup forms and progressively capturing consent around key holiday seasons and flows. Keep a core focus on this KPI and don’t get complacent with building the channel out relentlessly.
Lastly, remember to push for co-marketing partnerships with other D2C brands. Whilst not directly in your remit, it’s a great opportunity to expand the scale of your email marketing operation and generate more high-quality leads, so it’s in your interests to work strategically with potential partners. More on this strategy here and how it can be used effectively.
Goal: Better Inbox Placement
Proposed Strategy: Optimise your dedicated sending domain/infrastructure
The Why Behind the Strategy: Let’s imagine for a second that you’ve built a nice big juicy list. It’s a high-quality list of engaged prospects and customers and you know that if you’re able to communicate with as many of these people as possible then sales are virtually guaranteed.
Then you get diverted into the spam folder with at least 50% of your sends.
This is a very real challenge that can bleed cash out of your business yet so many brands are unaware of issues they’re facing in regards to hitting the consumer’s inbox because they don’t measure placement strategically.
In order to mitigate this, here is some sage advice from my good friend and renowned deliverability expert Nick Koreck on how to optimise your sending infrastructure and measurement on an ongoing basis:
“Did you know, 1 in 5 emails sent by 'legitimate senders' are blocked or filtered to spam? The truth is, most senders don't know they have deliverability issues, nor do they know where to look, or what potential exists.
Over 40% of senders have a poorly configured email technical setup, contributing to unnecessary deliverability issues. So, if you're starting to investigate your deliverability, checking the technical configuration and sender authentication (SPF, DKIM, DMARC) is a good place to start.
The baseline for every sender should be to reach the inbox across all relevant ISP-domains so that your optimization efforts don't fall short. But what really seems to get people excited about deliverability is that the uplifts continue over the long term, and the ROI is incredible!
It's important for senders to test often, and know your audience by mailbox-provider domain. You may be inboxing at Gmail but spam-filtered at Hotmail/Outlook, so consider the reach impact % on your audience, and the uplift potential if all those emails were inboxing.
These things are not obvious in your ESP reporting dashboards, but tools like "InboxMonster'' from "360INBOX" can provide detailed visibility into nearly 100 mailbox-provider domains and filters around the world - plus, rich insights about your sender reputation, data-hygiene, authentication, engagement behaviour, and more.
Better deliverability improves the user experience, boosts engagement, and of course, generates more revenue across the customer lifetime. Knowing your emails are inboxing allows you to send with confidence, and that's a good feeling!”
Nick Koreck, Founder @ 360Inbox
Goal: Increase Returning Website Traffic
Proposed Strategy: Create great content
The Why Behind the Strategy: It sounds simple but it’s true: if you increase traffic by to your website, customers will buy again by virtue of them being there and browsing.
The best way to get customers to return to your website is by timing them with a perfect offer (difficult most of the year) or by engaging them with great quality content.
This does require investing in content assets such as educational articles, videos etc that are served on your website, but I’ve seen time and time again that for brands who invest in this, the fruits of their labour are always plain to see.
This isn’t a quick fix for an email marketer as it’s often dependant on the quality of the assets the brand they’re working with is able to provide but if there is material to play with, this is a killer opportunity to drive repeat sales.
Goal: Optimise Average Order Value (AOV)
Proposed Strategy: A/B test offers on signup forms and campaigns & bounce back offers
The Why Behind the Strategy: Email marketers have more control over AOV than they think.
The signup forms they propose often directly impact AOV and contribution margin for the brand for first-time customers and the campaign offers they test have a significant impact on this metric.
It’s not something we can always massively influence in the context of predicting consumer behaviour, but it’s definitely a lever we can pull and should be measuring the impact of in relation to our campaign strategy especially.
At the very least, ruthlessly optimise the signup forms for maximum conversions and contribution margin in order to serve the brand’s unique unit economics effectively.
Goal: Maximise Customer Lifetime Value (CLV)
Proposed Strategy: Build in habit formation to the post-purchase experience / create a great bounceback offer
The Why Behind the Strategy: Measuring the impact of your strategy on CLV is difficult and often open to variables outside of your control (poor customer service, product not meeting expectations, etc).
However, if you are able to drive repeat purchases, you will positively influence CLV.
The best strategies to help you achieve this are:
- Ensuring the customer adopts the product
- Timing the customer with appropriate offers
To ensure the customer adopts the product, you need to conduct qualitative research to find out how they’re using it and what bottlenecks you need to overcome to build habit formation.
Waterdrop’s Drink More Water challenge is a brilliant example of this, and you can deploy similar strategies to gamify the post-purchase experience and embed your product in the customer’s life.
It takes creativity and there isn’t an easy way to achieve this, but the results if you’re able to nail it are massive, with the potential for customer advocacy also built into the equation.
Secondly, one of the easiest ways to increase CLV is with a thoughtful, well-tailored bounceback offer immediately post-purchase over email.
This has to be a no-brainer, an offer so good that it just doesn’t make sense to pass on it.
It also shouldn’t cannibalise the first offer so that you don’t trigger customer service complaints (i.e. offering 20% off after giving 10% off somebody’s first purchase), but it must be time-sensitive, compelling and if possible, product-specific so that it’s unique to what the customer just purchased.
Putting it all together
Let’s recap the best way to drive profitable revenue for an eCommerce brand over email and SMS.
Core metrics to track
- Email & SMS list growth
- Inbox Reputation Placement
- Total unique clicks to website
- AOV for first-time customers & returning customers from email/SMS marketing
- CLV (preferably within a 30/60/90 day timeframe)
Strategies to strengthen these KPIs
- Optimising signup forms & co-marketing partnerships
- Optimising sending infrastructure and monitoring reputation
- Creating great content & returning traffic incentives
- Understanding unit economics & creating effective offers
- Building habit formation & creating great bounceback offers
Focus on what moves the needle by tracking these metrics relentlessly and conduct rigorous A/B testing, and you’ll be 99% more successful and effective than other email marketers.
further in depth reading
This is a collection of articles that will provide you with more information about our FREE email marketing course.