Commentary

3 email ROI metrics retailers often ignore

Will Devlin, senior director, marketing, for MessageGears, explains that while retailers expend a great deal of effort measuring the sales impact of email campaigns many are often missing the mark.

November 19, 2018

By Will Devlin, senior director, marketing, for MessageGears

Retailers expend a great deal of effort measuring the sales impact of their email campaigns. Retail marketers will run A/B tests to determine the subject line that will get the most people to open, arrange the content to maximize and highlight their call-to-action, and then use traditional open/click/conversion numbers to determine how well it performed. Rinse. Repeat. Pretty graphics can even make them visually interesting and help to create nice PowerPoint presentations for the bosses upstairs.

These aren't the only standards for email marketing success, though. In many cases, in fact, they're woefully inadequate for determining the true ROI of a campaign. If that's all you're looking at, you're likely only skimming the surface of how email is impacting your business's bottom line.

Challenges of measuring email's impact

While some retailers are online only or exclusively brick and mortar, it is common for most consumer-facing companies to have a combination of both online and in-person sales. Any retailer that does a significant amount of its sales away from its own website is particularly susceptible to this under reporting of email's impact on company revenue. If a retailer sends out an email campaign promoting a one-day trunk show, even opens might not be a worthwhile measurement. If the email is clearly from the retailer, and the subject line says "One-Day Trunk Show from 10a.m. -7 p.m. tonight!" the reader may have all the information they need to make the decision to swing by without so much as opening the email.

Judging by traditional metrics, this email was a failure — no open, click, or conversion. But if the customer comes to the store because he saw the email, and maybe brings a few friends, the email accomplished exactly what it set out to accomplish. If you weren't making that connection, though, it'd be easy to get the impression that email had little value to the business. That is, if you either weren't willing or aware enough to think about customer behavior and dig deeper.

It's difficult to measure email ROI accurately, some of it will never get traced back to the email, and there's some guesswork involved, but there are a few actions you can take to connect the dots between email and customer actions. Below are a few ways to dig deeper into customer data and customer behavior to better understand the impact of email.

Unopens vs. actual purchases

If you're tracking purchases at the subscriber level, you may see that someone you thought was ignoring your brand — who you were going to drop from your email list as inactive — is still alive and well (and, quite possibly, influenced by your emails). Typically, emails that didn't generate any action in the inbox would be deemed a sign of a lack of engagement with your brand, but if you combine unopened email data with subscriber in-store activity, you widen your view of customer behavior.

If someone is still active as a customer, but doesn't open your emails, consider this a metric in itself. The strategy to reach this customer is different than the one for a customer who doesn't open emails and isn't active. This metric tells you that your messaging to this customer may be off base, you may have incorrect contact information, or perhaps they prefer a different form of communication all together. See this as an opportunity to adjust your messaging strategy to better fit the needs of your customer.

Baseline vs. bump sales

If you have a solid record of typical baseline sales, you can do a little subtraction to identify the impact of any marketing effort that isn't easily tracked. This works for email or any other type of hard-to-measure marketing effort. For instance, if you experience a bump in website traffic or sales whenever you send a promotional email campaign, it's likely you can trace that back to your email efforts. The key is to time these campaigns so they can be isolated as individual events. Tracking these unofficial metrics can help you identify patterns of actual customer behavior over time that clicks and opens cannot always identify for you.

Location and date specific sales

If you have a special promotion to share, it makes sense to push it all to all channels at the same time, including your website, social media accounts, advertising and email marketing to let everyone know. However, there can be a benefit to spacing out the launch of a promotion. This is an especially effective tactic if you want to track sales leads, but don't want to offer a discount code. Run A/B tests with respect to the timing and locations of your email campaigns so you can see the difference in sales when emails are sent vs. when they're not.

Finally, don't give up

Of course this isn't to say that the traditional metrics are meaningless, or that you shouldn't look to improve upon them. For most businesses, this is still useful data that can help you better understand how your emails are performing. But, particularly if you're in an industry where the vast majority of sales are made offline or at third-party sites, it's important to remember there's more to email ROI than the metrics that are easy — and common — to apply.