How valuable are email campaigns for your business?
We all receive hundreds of emails every week from companies vying for your attention promoting their products or services. Most people will skim over their inbox and delete the majority unless it has a headline that grabs their attention.
Ultimately, you will never really know how many people will actually be interested enough at that very point of receiving your email to click your link or contact you directly to enquire and make a purchase. With the exception of having a regular email communication strategy for your existing clients/customers, you shouldn’t embark on producing email campaigns just because it’s what every other business does, unless you know whether or not they really are of value to your business.
How much are they worth?
Working out the value of your email campaigns for your business will help you understand how important they really are and how to make them work well for your business needs. For the most part you will actually be issuing emails to generate new leads and in other cases it will mainly be about generating interest and awareness as well as providing knowledge.
If you are using an email platform to send your emails you need to understand what your KPIs are so ask yourself these questions:
What’s the cost per campaign?
How many contacts are you sending your message to?
What percentage of those contacts do you expect to open your message?
What percentage of those contacts do you expect to click on the links in your message?
What percentage of those contacts do you expect to send you a direct message and become a lead?
What percentage of those leads will convert to a client/customer?
Each point will decrease in percentage as you drill down and down further more on each level up to the point of lead conversion. The percentage of clients/customers generated will be the value in relation to the overall cost. So you are ideally looking for the campaign to at a minimum, pay for itself.
According to Mailchimp – the average conversion rate for Business and Finance industries is approximately 20% open and approximately 3% clicks. Roughly 1% will then become a lead and then let’s say 25% become clients/customers because these leads are now warm to your proposition and you have the opportunity to speak directly to them and persuade them to use your services.
Let’s say you are running a campaign to promote life assurance, from which you will receive a fee of £50 for each policy sale. The cost of your campaign is £100. Working backwards, you will need the following number of contacts to break even:
2 become clients (25%) – value £100
8 send a direct message and become a lead (1%)
800 click on your link (3%)
2400 view your message (20%)
12000 email contacts required for campaign
This is obviously a large number of contacts and conversions will vary depending on the quality of your campaign and how targeted the content of your promotion is to your audience’ needs. The actual value of each lead will also depend on the revenue generated from the product or service you are promoting. If the revenue value from one client/customer is higher than the cost of running your campaign then you are already in a position of profit just by converting one lead.
Testing and Analysis
Using this system will allow you to understand the value of your email campaigns, how it fits into your overall marketing budget and how important they are to the growth of your business and your brand awareness.
It will be a case of trial and error over the first few campaigns to really understand what works well for your audience and generating new business. Segmenting your database by age, demographic, income and interests at a minimum will give you enough information to create an email promotion that is targeted to their needs and more likely to generate the leads you are looking for from your campaign.
Once you start your email campaigns, the more analytics you have to measure, such as; open, click, bounce, forwards, replies, unsubscribes etc, will be crucial in understanding how to manage and create successful emails. In turn, the more you appreciate and anticipate your audiences’ needs, the more valuable and successful your campaigns will become.
Contact Data and Lead Generation
There are several companies that offer data that you could use to promote your campaigns and generate leads. Whilst purchasing data – particularly personal details is generally outlawed by many email platforms, conducting due-diligence to understand how the data has been generated and that the contacts have opted in to receive marketing emails will help to ensure that you are not breaking any data rules.
If you are using this method of generating data, it’s a good idea to use the email or postal direct mail services they offer to help you generate leads, because the contacts have opted-in to receiving marketing emails from them and their associated companies/partners, of which you will then be one by using this service.
Other ways of generating contacts for your database is by running campaigns via social media offering sign-up to your newsletter or access to free guides, conducting research on a particular topic using survey’s or questionnaires, promoting sign up to events that you are running, attending networking/community events and working with professional partners to access their contacts.
Email campaigns may not be a valuable resource for all businesses, but with more and more consumers accessing information and purchasing through this medium if it is a key part of your marketing strategy, making sure they are of value for you and your business is crucial to their success.
Download our complimentary guide on Managing Your Email Campaigns for more information.