Commentary

Organization Influence on Email Marketing Effectiveness

MarketingSherpa has conducted new research and comprehensively rewritten the 2011 Email Marketing Benchmark Report to provide marketers the data and insights needed to make informative marketing decisions.

Strategically, email plays an important role in achieving a wide range of marketing objectives. Tactically, email appears to have unlimited potential especially when integrated with emerging marketing channels like social media. As a mature tactic, performance improvements are no longer measured in quantum leaps but in incremental steps. But when multiple improvement tactics are combined, performance is accelerated.

This study shows a clear correlation between the phase of an organization's email marketing maturity and the effectiveness of its email programs, opines the report.

The phase of an organization's maturity is determined by the process they use (or don't use) to plan, execute, measure and report on email marketing programs. The segmentation demonstrates the disparity in the performance of email marketing programs by organizations in each phase of maturity.

Half of all organizations are stuck between Trial Phase and Strategic Phase of maturity:

Phases of Email Marketing Maturity

Phase

% of Organizations

Organization does not have a process or guidelines for performing email marketing.

14%

Organization has an informal process with a few guidelines they sporadically perform.

49%

Organization has a formal process with thorough guidelines they routinely perform.

37%)

Source: MarketingSherpa Email Marketing Benchmark Survey, December 2010

 

How executives perceive email marketing's ability to produce a return on investment will determine the investment they are willing to make. Organizations in the strategic phase of email marketing maturity are about twice as likely to believe that email marketing is producing a ROI as are their counterparts in the transition and trial phases. Strategic phase organizations are more than twice as likely to increase email marketing budgets liberally in 2011 for continuous improvement.

Organization Perception Of Email Marketing ROI At Budget Time, By Maturity Phase (% of Corporate Responses)

Phase

Strategic phase

Transition phase

Trial phase

Email marketing is producing a ROI. Let's increase the budget liberally for continuous improvement.

38%

20$

19%

Email marketing will eventually produce a ROI. Let's increase the budget but do it conservatively.

38

43

41

Email marketing is unlikely to produce a ROI. Why invest more?

6

10

8

Email marketing is basically free. Let's keep it that way.

18

28

32

Source: MarketingSherpa Email Marketing Benchmark Survey, December 2010

Email marketers continue to struggle with the challenge of delivering highly relevant content to their target audiences. Developing a sufficient amount of content is a time-intensive process that many marketers do not have the resources to produce. While relevancy will be the most significant challenge to email marketing effectiveness in 2011, there is a range of second tier issues

Most Significant Challenges To Email Marketing Effectiveness, By Primary Channel

Obstacle

Business channel (B2B)

Consumer channel (B2C)

Both channels (B2B2C)

Targeting recipients with highly relevant content

68%

66%

56%

Quantifying email marketing ROI

44

37

44

Improving email deliverability

41

39

31

Getting people to opt-in to email lists

40

46

42

Legitimate email being perceived as spam

38

35

36

Lack of an effective email marketing strategy

33%

33

40

Source: MarketingSherpa Email Marketing Benchmark Survey, December 2010

The popular use of an email marketing tactic does not always reflect its effectiveness, says the report. For example, that the tactic of segmenting email campaigns based on behavior is used more often than automatically sending email based on triggers, which is more effective and less difficult to implement.

Three Dimensions Of Relevancy Tactics: Effectiveness, Difficulty And Use

 

Approximate % of Difficulty/Effectiveness (100% = Most Difficult)

Usage

Degree of Difficulty

Level of Effectiveness

Automatically send email based on triggers

65%

55%

Segmented email campaigns based on behavior

80

50

Segmented email campaigns based on sales cycle

65

35

Dynamic personalized email content

50

35

Allowed subscribers to specify email preferences

42

32

Source: MarketingSherpa Email Marketing Benchmark Survey, December 2010

Making it into the inbox is a perennial challenge for email marketers, observes the study. The effectiveness of tactics used to improve deliverability varies significantly and many marketers have shared their insights in this study on what works best for them.

Deliverability Improvements Offset By Continued Challenges

Deliverability Improvements

Measurably Worsening

Measurably Improving

Bounce back and undeliverable email

15%

37%

Missing rate (not delivered anywhere)

12

22

Inbox placement rate

11

21

Junk folder placement rate

18

19

Emails not opened in more than 6 months

18

18

Emails not clicked in more than 6 months

15

16

Source: MarketingSherpa Email Marketing Benchmark Survey, December 2010

The vast majority of organizations track the fundamental delivery, open and click-through rates. But, there is no clear consensus on the formula used to calculate each of these metrics. These downstream metrics are essential to tracking ROI back to email campaigns, concludes the report

Email Marketing Metrics Tracked By Percentage Of Organizations Tracking Them

Metric

% Organizations Tracking

Click through rate

92%

Open rate

90

Delivery rate

81

Clicks per link in email

51

Clicks per email

51

Post click conversion rate

44

Response by list segment

36

Revenue per mail

33

Social sharing rate

18

Source: MarketingSherpa Email Marketing Benchmark Survey, December 2010

Please visit MarketingSherpa here for additional information about this study, the Executive Summary, and access to the complete report.

2 comments about "Organization Influence on Email Marketing Effectiveness ".
Check to receive email when comments are posted.
  1. Georgia Christian from Mail Blaze, January 6, 2011 at 8:28 a.m.

    Nicely done Jack - thanks for taking the time to put this post together. I agree with Paula - it seems people just aren't interested in making the effort, which worrying because with all the evidence out there to prove how effective email marketing can be, you'd think they would make the most of the opportunity.
    georgia@mailblaze.com
    http://www.mailblaze.com

  2. Thomas Sather from Return Path, January 6, 2011 at 1:38 p.m.

    I think that most people are more focused on running their company and may not have the know-how, savvy or technology to do email marketing effectively. Most marketers I know really want to make the effort, but don't know where to start, or they don't have the resources to do so. This article and the Sherpa Benchmark Report is a great place for marketers to start, and then seek outside assistance if needed to implement.

Next story loading loading..