Now, I enjoy a good benchmark study as much as the next guy -- but I worry that marketers don't get as much value from them as they could. "How are we doing?" is a legitimate question, but a better one is "How can we do better?"
“Average” is the New “Bottom”
In our latest benchmark study, which I oversee, we report on overall mean results for all of the 2015 study participants. The study also adds the more informative median, in which half of brands perform above a mark and half below, along with the best (top 25% of performers) and worst (bottom 25%).
This additional data helps you benchmark against the top performers in your field and seek ways to improve Instead of fixating on the average, where outlier numbers can skew results.
Translate Insight into Action
1. Sell the dream to build open rate: In the study, the overall median open rate was 41.3%. But travel companies scored higher than retailers (23% to 16.1%). In the top quartile, travel ranked number one at 56.7% while retail ranked 16th of 17 verticals at 33.8%.
Cadence, calls to action, the aspirational aspect of travel versus the daily-deal drumbeat of retail – these factors contribute to the differential. Knowing this, retailers could add an aspirational aspect that sells the dream as well as the deal.
2. Enhance transactional emails: Not surprisingly, transactional open rates more than doubled nontransactional: mean 44.9% to 21.08%, median 45.9% to 17.3% and top quartile 72.2% to 40.8%. Click rates are correspondingly high as well.
Marketers can capitalize on transactional emails' inherent higher engagement and add content that can drive an extra action or two, depending on what your country's anti-spam laws permit. Consider links to how-to product videos, user guides and forums/FAQs.
3. Use CTOR to find and fix weaknesses. The click-to-open rate, which reports clicks as a percentage of opens, is one of the more valuable process metrics. It incorporates the notoriously imprecise open rate but improves on the raw CTR because it isolates content and layout within your email from the affect of your brand and choice of subject line.
The overall median CTOR in this study was 9.4%; meaning about one in 10 openers also clicked a link in the email, and 28.7% overall in the top quartile, with some sectors approaching 30%.
4. Renew permission to clean up databases and reduce churn: With six months' worth of 2014 performance data under Canada's Anti-Spam Law, hard bounces and unsubscribes for Canadian brands were generally half those of other global regions (United States, U.K., Europe/Middle East/Africa and Asia/Pacific).
Canada's mean hard-bounce rate was 0.27% compared to the overall mean of 0.54%. Its mean unsubscribe rate of 0.06% was less than half the overall mean of 0.13%.
We expect that companies renewed or acquired permission and cleaned up databases to avoid CASL violations. Permission-renewal campaigns and database hygiene also likely suppressed potential unsubscribes.
Beyond Benchmarks: Your Next Steps
Once you compare your metrics to benchmark numbers, what can you do with them? Here are three suggestions:
1. Use your insights to lobby for improvements. Knowing where you stand against the leaders in your own industry vertical helps you identify opportunities to reduce waste or drive more engagement and revenue. Use these insights to bolster your request for more budget resources to make improvements.
2. But audit your tools first. Once you identify improvement opportunities, see if you already have the technology and capabilities you need. Perhaps your vendors offer features you're not using yet. Or, you could collaborate with another department to save money and resources.
3. Maintain perspective. With all benchmark studies, you are looking at results taken at a specific moment in time on a representational slice of a particular client database. How your own numbers fall or rise is a much better measurement. And ultimately, output metrics such as revenue, conversions, increased loyalty, etc., are the only ones that really matter.
Until next time, take it up a notch!