• by editor , David Baker , August 1, 2005

We've finally reached the end of our story. I've compiled two specific return on investment (ROI) stories that illustrate the success of using the four elements of financial returns,customer value, and internal efficiencies, and learning and progression to tell your story.

The first story comes from an online-only retailer that is actively involved in e-mail marketing. The company's average open rate was 20 to 22 percent with an average click-to-open rate of approximately 45 to 50 percent. Mailings produced a 1.5 percent conversion rate and customers spent about $75 to $80 per order. Those are the basics. Now, let's tell the story with my approach.

The e-mail program represented a 10:1 return on investment with an average total cost of 5 cents per delivered e-mail message or 25 cents per e-mail impression. By running recency, frequency, monetary analyses, the e-mail team was able to isolate the most frequent purchasers, the purchasers with the highest average order value, and the ones that were most likely to respond to seasonal communications.

By monitoring the high-value customers' responses, the team could isolate the demographics of those customers. The high-value customer turned out to be female, over 50-years-old, with an annual income of $100,000; she typically responds to e-mails at night, on a broadband connection.

By isolating the high-value responders and high-value non-responders, we had the choice of simply ignoring the non-responders (those who never opened or clicked through to an e-mail) or reverting to another channel to reach these people. By illustrating the reactivation costs through traditional methods, we convinced the organization to take a direct and indirect view of reengaging these subscribers through mail and third-party communications, rather than leaving them dormant in the e-mail database.

All this effort made the team much more effective. They increased acquisition by 15 percent, converted 20 percent more first-time subscribers and improved retention by increasing order frequency and raised the customer's lifetime value.

The second ROI story is about a b-to-b brand marketing organization that specializes in industrial products sold through myriad distribution channels. This company launched an e-mail program with the goal to bring to life their brand through different business-and consumer-level e-mail communications. This organization's story is primarily focused on list growth and the value of information being sent.

The main e-mail list achieved 15 percent growth annually; it also had a 5 to 7 percent churn rate and had been acquired through a variety of adhoc acquisition methods over three years. No one in the company really knew the value of this e-mail channel. Most executives couldn't answer the question, "What does a successful e-mail program mean to you?"

To change the leadership team's frame of thinking, we painted a picture of a customer and a channel partner, and how the customers use e-mail to help inform business decisions. We profiled a series of communications and which types of communications had higher responses. We also spoke about the value of personalization and viral efforts in growing and building brand loyalty through valuable, timely e-mail communications. We likened their e-mails to tracking a package shipment: We know the customer got it, opened it, and forwarded it around the office. We also know where and what time this happened. These are all important components in defining the success of an e-mail program.

Each of these stories could go on. There is always more to share than just the customer insights and results. But the important thing to note is that the ROI story should always feature a financial return that is tangible and means something to the organization. It should infuse a customer story or business experience that brings value and context to the effort, and should tout the value of "the effort" and what that means to the organization.

Give it a try and I'll guarantee your program will be viewed differently by your organization and by your team, and will give you a different perspective of what e-mail marketing success means.