Greetings from
sunny California, where we've just enjoyed our 24th day of rain in
March. That broke a
San Francisco
record set in... 1906 (a year remembered around here for records we don't
want to revisit).
Just
like you, we're wrapping up the first quarter of the "new" year. Time to
take stock of what's really working - and re-evaluate programs that
aren't.
One
of two surprises is top of mind for many marketers right now: why your
direct marketing programs aren't performing as well as they did last year,
or why they're doing so much better. Things have changed, and that's
widened the gap between winners and losers.
We'll
look at some of these changes, including dropping open and response rates
(both online and offline), changing reading habits, optimal list size, and
(gulp) the AOL and Yahoo! Goodmail deals. And how you can use this info to
stay in the "winners" camp.
We've included a resource list at the bottom, where
you can find lots of the data we reference here. Some of it's free; some
isn't. And there are a couple of special opportunities, if you act today.
What's Goin' On Around Here, Anyway?
Traditional direct mail response rates are down. According to DM ace
Clayton Makepeace, programs that have generated 300-400% ROI for years
aren't working any longer - and a successful replacement may only generate
an 85% ROI. For those who are counting, that means instead of getting $3
or $4 for every dollar spent, you now get 85 cents. Ouch!
On
the email side, things are a little more confusing. According to
ExactTarget's
2005 Response Rate Study,
open rates are way down, but
average response rates have held steady and even improved a bit late in
the year (6.6% in Q4 2005 versus 6.0% in Q4 2004). But that's the average
- most long-term programs saw response rates drop along with open rates.
Unsubscribe rates, on the other hand, improved a bit and may have
stabilized at around a quarter of a percent.
There's good news, too. Conversion rates are up - orders per email are up
18% and clicks to purchase are up 28% according to MarketingSherpa's
Email
Marketing Benchmark Guide 2006. And the audience is growing - according to ExactTarget, lists across all segments showed net growth in 2005.
So
even if "business as usual" isn't working, the rewards are there for the
curve-breakers who adapt to this changing environment.
What's Causing This?
In
one word: overload. According to Epsilon's Al DiGuido, 2005 was a "stellar
year for email marketing" - more and more organizations are using this
channel, and, fortunately, using it responsibly. But that still leads to a
cluttered inbox.
This has impacted both online and off-line direct marketing. Clayton
Makepeace identifies seven reasons for off-line response rate decline,
including clutter, skepticism, risk-aversion - all driven, or at least
exacerbated, by prospects' online experiences. And the biggest factor -
what Clayton calls the "Google Syndrome" - even people who do read
your off-line
piece are more likely to go online to find a merchant, than they are to call or
mail a response to you.
This should all sound familiar to online marketers. Spam is still a huge
problem - and, according to DoubleClick, 57% of respondents define spam as
"I once gave permission, but I no longer wish to receive." They still
won't use your unsubscribe link, because they know that a few unscrupulous
senders (who send a ton of messages) use these links to verify email
addresses. (By the way, this practice seems to have increased since the
passage of the CAN-SPAM act, but that's a topic for another article.)
Another word: timing. The most effective days to send have changed.
According to ExactTarget, the vast majority of emailers send on Tuesday,
with Wednesday and Thursday tied for second. But the highest open rates,
in both B2B and B2C campaigns, were on Friday, which also had the second
highest click-through rates.
The highest click-through rates were on... wait for it... Sunday! In spite
of lower open rates. Even for B2B campaigns, where average weekend
click-through rates were 25% higher than during the week.
Prospects' behavior has changed. Marketers' hasn't.
Two more words: bad data. I'm not questioning ExactTarget's data - I think
it's good. But open rates, specifically, are problematic. What we
actually track is download requests for a specific image file. That
request may happen from the preview pane. Doesn't mean you're actually looking
at the message.
And now, with the prevalence of image blocking, that "open" isn't tracked,
even if you are reading the message. That will artificially push "open" rates
down.
In
any case, open rates have never been a measure of a successful campaign.
Success means at least a click-through, and really you should be counting
conversions and, ultimately, sales. Open rates are useful in helping
identify the problem you need to fix. E.g., if both open and click-through
rates are down, you need to get the message opened. If opens are good, but
click-throughs low, fix the offer or the creative. If click-throughs are
fine, but conversions lacking, fix the landing page. And so on through the
list.
Here's a good one: the bigger your list, the lower both your open and
click-through rates. Lists of under 1000 records performed significantly
better than larger lists. (Lists with less than 100 members did even
better.)
Costs have gone up, too. The USPS raised their rates at the start of the
year, so direct mail costs more. And in the email world, AOL and
Yahoo! raised quite a furor when they announced programs supporting Goodmail's
pay-to-play CertifiedEmail.
But, will it really affect you? Probably not and, if it does, the impact
probably won't be as high as first feared. We'll discuss that in our next
issue, along with some suggestions to get your direct marketing programs
back in the "winner's circle".
All the best in all your marketing efforts,
-
Steve
P.S. If you can't wait to see
our suggested fixes, we've
posted the next issue online. It just got too
long for one article. "If I'd had more time, I would have written a
shorter letter."
Resources
Here are the primary sources of
data for this article. Some are free; some not. The first two offer
special savings if you act today (March 31).
MarketingSherpa's Email Awards - Nomination Deadline Today
If
you've built an award-winning email program, why not get an award for it?
Sure, the real reward is increased sales, but would it hurt to tell
173,000 MarketingSherpa readers how good it is - and have MarketingSherpa
link to your site?
It
costs $125 to
enter - but all Email Summit attendees (see below) get one free
nomination. I
know at least a couple of you have programs that are worthy of this award.
Go for it!
http://emailawards.marketingsherpa.com/?9047
(This is an affiliate link.)
MarketingSherpa's Email
Summit
April 21-22 in
Chicago. Sign up by
Friday, March 31 to save $100.
-
Attend 21 Case Studies from real-world email marketers
(big and small) including American Airlines, IBM, Doubleday
Entertainment...
-
Enjoy networking galore with America's top 300 email marketers
(business-to-business marketers, ecommerce sites, and consumer mailers)
at MarketingSherpa’s GALA Party at House of Blues.
-
Plus get * practical * expert advice on:
* email delivery (panel includes AOL)
* Creative & newsletter design
* growing your opt-in list (with quality names)
For more info, visit
http://www.sherpastore.com/Email-Summit.html?9047
(This is an affiliate link.)
Note: the
$100.00 discount ends
3/31/06
ExactTarget Email Marketing 2005 Response Rate Study (free)
Free report with lots of data from their 4000+ customers' 230,000 email
campaigns and 2.7 billion email messages. A few typos, and more data than
analysis, but good stuff. Free, but you must give your contact info...
http://email.exacttarget.com/lp/2006_BestDay_WP.asp
MarketingSherpa's Email Marketing Benchmark Guide 2006
Want to know what's really happening in Email Marketing? For my money,
this report contains better, more actionable data than what some of my
clients get from analysts with $20,000+ retainers. For only $247.
Features 1,927 marketers' real-life results stats from email newsletters,
sales alerts and blasts; plus, usability, design, measurement, and
delivery tips. Also includes:
-
New email Eyetracking laboratory results (aka “heatmaps”)
- Opt-in tactics and list growth trends (including co-registration data)
- Spam filtering, bounce rates and deliverability data
- Which email creative tests give worthwhile results
- RSS, wireless SMS, and desktop applications vs. email
In
total, 310 charts, tables, and eyetracking heatmaps are included. Download
your copy now at:
http://www.sherpastore.com/c/a.pl?9047&p.cfm/1976
(This is an affiliate link.)
Paul Myers TalkBiz newsletter (free)
I
get a lot of newsletters. This one, I read. Focus is primarily online
marketing, more B2C than B2B, more small-biz than multi-national. But I
still get tons of good information I can use...
http://www.talkbiznews.com/
Clayton Makepeace "Total Package" Newsletter (free)
The focus is on copywriting - both online and off-line, although there is
more of an off-line focus. Get it at
http://www.makepeacetotalpackage.com/
AOL Whitelist Procedures
Here are the options to get your email delivered to AOL users.
http://postmaster.aol.com/
|
|
