The 5 ways of increasing revenue from email marketing
What is the best way of increasing revenue from email? Pop onto LinkedIn and you’ll see endless claims and case studies of what works with very specific strategies and approaches. But sometimes it’s useful to simplify the ideas and think more broadly about the best approach.
Assuming we only have the email programme itself to tweak, and there is a reasonable baseline in current activity and deliverability, I’ve tried to classify these into 4 options open to email marketers and the plusses and minuses of each, with a bit of a bonus 5th option for those who like creative accounting.
1. Send more email
The easiest way of generating extra revenue is simply to send more emails. In simple maths if you send 2 emails a week currently, and you add a 3rd you might expect to increase revenue by 50%. In reality you won’t achieve the same amount of revenue and there is a point of diminishing returns but still for instant revenue uplifts it’s also the quickest.
There are costs though.
Firstly, the more emails you send, the greater the impact on your list in terms of unsubscribes and general list fatigue. If you really overdo it then also expect deliverability issues.
But what is the optimum number of emails per week? Probably higher than most marketers think. As Tim Watson from Zettasphere researched 6.21 emails per week as the optimum frequency (albeit with caveats and not as a target!) this is higher than most marketers feel initially comfortable with. Open and click rates will drop over time as frequency increases but the overall number of opens, clicks, and therefore conversions will increase.
The second cost with sending more email is the time it takes to produce more email. With email marketers stretched as it is producing what they need to get out of the door the last thing they want to hear is ‘sending more email is the easiest way of increasing revenue’.
There are ways to tackle this resource challenge. It could be as simple as re-sending emails with a quick subject line change. Or you could invest in content automation, reducing the need to manually craft emails. A brand I worked with went from 3 emails per week to daily emails, increased their revenue by over 20%, yet actually spent 1/3 of the time building email as automation took over.
Under the heading of optimisation we can bundle everything from the re-design of templates, to content changes, A/B testing of subject lines, and finding other wins like a best time of day to send the email.
This is where so many marketers focus, crafting what is in front of them. But, what level of improvement can you make with your time here? This activity can be fast to get results with but quickly you run out of runway. You might find the odd 10% or 20% improvement here or there, but after that there will be diminishing returns that mean you get very little for a lot of effort.
When you run out of road with optimisation there is only one tactic to start increasing the performance of your email marketing - personalisation.
Personalisation in this context can be anything from triggering messages at the right time in the customer lifecycle, through to segmented campaigns, dynamic content, and 1:1 personalised content.
Generally speaking, the greater the level of personalisation, that being how individualised the content is, the greater the results. Campaigns segmented to a handful of different segments perform better than ‘batch & blast’ but nowhere near the performance of 1:1 content where perhaps each individual recipient is presented with a unique selection of products based upon their past purchase and browsing behaviour.
The rewards can be huge. There are plenty of often quoted statistics about personalisation, but many of these are often biased by comparing the revenue per email of a specific highly targeted warm send like a cart abandonment or next purchase email and comparing it with the average revenue per email of a generic whole database send. Our own experience has shown adding 1:1 personalised content to an existing email should give something in the region of 10% to 80% uplift.
The obvious downside to personalisation is it takes effort, not just from the marketers but pulling IT and data teams into the conversation. If it was that easy everyone would be doing it already.
So, when you do start on the personalisation journey it’s important to focus your resources on where you will get the biggest revenue wins. For a personalisation project to have sustainable revenue increases consideration needs to be given on how to scale personalisation across the biggest campaigns.
Clever micro targeted campaigns to niche audiences might give you amazing open, click, and conversion rates but the overall incremental revenue isn’t going to be noticeable to anyone at the end of the year. But what if you were able to personalise 1 email a week to the whole base? Immediately even a 10% increase in revenue on these will dwarf any little triggers.
The scope of personalisation is too wide to cover with any justice in this post but all of us will need to face up to it at some point if we have any ambitious email revenue goals.
This post talks about using email to increase revenue and while you can change your tactics to extract more revenue from paying customers, a completely different take is to leverage your email database to find sponsorship and advertising opportunities.
There are many brands I’ve worked with where they have discovered that charging other brands to be featured in the newsletter delivers significant, and guaranteed sources of revenue. As an email marketer I hate it – immediately you lose control of your content calendar, and instead of being customer centric you can end up with low value, irrelevant content.
What is worse is paid sponsorship becomes addictive to a brand. It’s easy to sell as you can show how many people will be sent an email and open it. With it being easy to sell you end up with demand outstripping supply that leads directly to sending more and more of it, overwhelming your poor customers.
Once this revenue is in the building it gets added to forecast for next year, but as the business wants to grow revenue someone adds a 25% growth forecast which means yet more email.
The email marketer will try to put up a fight to reclaim control of the email marketing programme but it’s impossible for them to replace this revenue overnight with more sophisticated, personalised content – CRM strategies by their nature take time to come through and in the meantime those who hold the revenue targets aren’t prepared to wait. After all people tend to lose jobs if revenue commitments aren’t met.
This all sounds horrendous and if we look through the eyes of the CRM Manager it is. But take a wider view when we see the substantial revenue it can generate it can be harder to argue its bad for the overall business.
So, what can the email marketer do to prevent the customer database being destroyed by the onset of paid for brand promotions? Beyond a time machine to stop it happening in the first place you could try these ideas:
- Don’t sell email space on its own but as a package including website coverage, banners and other options. This reduces the pressure on having to rely purely on the email to give value to the partner, which means editorial decisions aren’t as likely to be compromised and partners content dominating campaigns
- Embrace it – use segmentation and personalisation to match the partner promos to the right customers. If you can find the 5% of your database who will likely provide 80% of the clicks for the promotion that causes little damage to your overall list, but does require buy-in from the sales team to educate the advertiser about the merits of this approach
- Prove you are better – if you really think sponsorship is damaging your overall email marketing beyond if you were given free reign then negotiate keeping a percentage of your audience back in a group free from any paid advertising. At the end of a few months how much more revenue, if any have you generated from this group?
5. Change how you measure…
This last one is a bit cheeky but there is an element of truth in it. Back in the day when I worked client side for a group of footwear retailers, I was the irritating sarcastic one in the corner which would pipe up with ‘We could change the way we report’ when someone asked how we could increase revenue from one of our channels.
I raise it here though because if we are trying to improve revenue from email we need to be sure how much we are really making.
Is email simply reporting revenue that we would have happened anyway even if we hadn’t sent the email? (Hello cart abandonment emails, I’m looking at you.)
Or are we underplaying how much of an impact email has? Dela Quist mentions one way of understanding this here, the other classic way is to use control cells to compare those sent and those held back in the control.
Investing time in effective measurement is essential for working out if any of your approaches lead to real revenue wins.
Depending on the maturity of your brands email marketing will determine which of the above you’ll invest the most time into – if there is lots of quick wins no doubt you’ll spend time optimising, while those with mature programmes are likely to be thinking about personalisation to drive revenue.
But have we missed any revenue increasing options?