• by Loren McDonald , Op-Ed Contributor, November 8, 2007

An effective email marketing program isn't just a big single-cell creature. It's an interconnected ecosystem, with many factors that affect its vitality. Using a limited set of metrics to measure performance can mislead you into thinking you're succeeding wildly or failing miserably.

Instead, use a "balanced scorecard" approach to get readings from all around the ecosystem and help you understand more clearly exactly how well you're really doing.

This concept, used often by companies to assess corporate performance beyond just financial measures (e.g., customer and employee satisfaction, innovation, brand strength, etc.), can help you grasp the bigger and more complicated picture.

Applied to email, this forces you to move beyond simple metrics such as revenue per campaign or opens and clicks. Both sets of statistics will give you only part of the picture, no matter how accurate they might be.

This concept goes along with my previous EmailInsider column in which I urged you to begin assessing the strength or weakness of your email program in terms of business goals, not just email-oriented metrics.

These seven factors are one example of what might make up the balanced scorecard for your email program:

1. List growth and health

2. Deliverability

3. Message level

4. Campaign performance over time

5. Conversion activity

6. Subscriber/customer engagement and relationship

7. Financial performance and ROI

Using the balanced scorecard can help you assess whether changes in your email program are ultimately helping or hurting it. One classic example is in deciding to increase message frequency in order to bring in more revenue -- a timely example as we head into the holiday shopping season.

If you rely only on bottom-line performance, you might think you've succeeded if you see an increase in number of orders, order size or total campaign revenue. This is actually what happened with one client that increased mailings from five a month to 12.

However, that increased frequency had a severe cost. Once we looked at process metrics, such as delivery rate, opens, unsubscribes and spam complaints, we uncovered a whole lot of subscriber unhappiness. Spam complaints and unsubscribes went through the roof, outpacing the revenue increase.

The total cost of boosting frequency -- reacquiring the subscribers who left, acquiring new ones, sending more campaigns, potential lost revenue -- would have actually cost the company money over the longer term and immediately harmed the client's sender reputation.

The balanced scorecard approach will help you spot problems in other areas so that you don't find yourself, six months down the road, wondering why you aren't making money anymore and why your email messages get blocked at every major ISP. And, it doesn't just help you avoid failing. It can also show you where you are succeeding when you want to measure things other than financial performance, such as customer engagement, list health, etc.

Yes, using a balanced scorecard will take more time and effort, but your reward is a more accurate picture of your email program's vitality and contribution to your corporate goals. That can help you justify your requests for a bigger share of the marketing-budget pie and for email's place as a strong channel in a multichannel marketing program.