The One Email Marketing Metric That Matters
If you read email marketing tips you’re probably reading about glamorous metrics.
Everybody these days is concerned about metrics. Big data is the big news in most online marketing circles. People are obsessed with all the various metrics available regarding consumer marketing.
Much of the information is great. Businesses are able to get closer to 1-to-1 marketing where creating offers and products for individuals is possible.
Yet if you talk to any executive they will not give you the time of day if you discuss email open rates and click rates. Executives earn their positions in companies because they have understood that there is really only one metric that matters.
The only email marketing metric that matters is Profit.
Let’s review a few key areas of email marketing that concern profit. If you can master these areas you’ll be ready for those meetings with the executives and that could mean promotions and raises. You see you’re really looking for the same thing as any executive. You just have to think in their terms and deliver and they’ll be more than happy to reward you.
Budgeting and Reporting Email Marketing Programs
The best companies in the world create budgets and plans. Most plans are laid out based on historical results combined with emerging trends and a little bit of intuition. If you have sat in on executive meetings you know that budget meetings do not include discussion about email open rates or email clickthrough rates. The only discussion in executive meetings is about profit and growth.
When setting up your email marketing budget it’s important to focus on the profit equation. You’ll want to focus on profit per email sent. This is a metric that describes how much money the business is making on each of the subscribers.
Also report on overall bottom line dollars. Focus on the cost of the email marketing program and the cost of goods sold subtracted from the total sales dollars generated from email programs.
To get more complex start using holdout testing where possible to see how the email program interacts with other marketing programs such as paid search, natural search, display advertising, and even direct mail marketing.
Focusing on Email Marketing Goals and Conversions
Profit matters, but it’s also important to understand the goals and conversions that lead to profit.
Focus on goals and conversions. The conversion you’re ultimately focusing on is a sale that doesn’t result in a return or cancel. You want profit and that comes from converting a person to a sale.
The goal is what you setup for your email program that generates the conversion.
Business executives focus on profit, but they also focus on what generates profit. These are goals and conversions. Think like an executive and focus on what drives profit for your business and maximize those goals and conversions.
Build the List of Subscribers
I’m a strong believer that the money is in the list. This is an old direct marketing phrase and it’s been something that is true for direct mail companies and email marketing companies.
As you optimize your email designs and strategy for profit it’s also worthwhile to focus on adding subscribers to your email file. It’s one of the most profitable functions you can do as an online marketer and email marketer.
Focus on growing the list and maximizing the profit.
The executives at your company focus on profit in their meetings. There is no other metric that matters in any area of marketing except profit.
Wouldn’t it make sense to focus your email marketing program on profit?
Focus on profit and really start improving your email marketing program. When you focus on profit you’ll focus on the right metrics that really improve the bottom line of the company and this is what will impress the executives.
Stand out and focus on profit.
It could mean more money in your own pocket come raise time.
About the Author: Dayne Shuda is a contributing blogger for Fluttermail, an email provider for small business. He has worked on a variety of email marketing campaigns including email newsletters and e-commerce emails.
Image Credit: Sudhamshu
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by Jordie van Rijn
Nice article Dayne.
It’s a misconception that executives only talk about profits and not about the activity in the audience (opens, clicks, etc).
I’ve been in enough executive meetings and can ensure you, most of the time goals are also plenty soft and sometimes process based too. Surprised? Realize that an exec team is made up of people with different responsibilities and functions. Business case? Measuring revenue per source? Those steps are often not even taken (yet). Now that doesn’t mean that you shouldn’t focus on the outcomes of your efforts and create a strong position for growth. And together with thinking what generates profits and revenue, also think about removing elements that are costing loss of profits and saving costs.
by Dayne Shuda
Great points, Jordie. I’ve had experiences too where execs like to see the entire revenue and profit funnel. They want to know the sources of the revenue. I think it allows them to see if the business model is changing in any way so they can focus on the future of the company.
by Terence Savage
Sorry Dayne, I disagree with the simplicity of your argument. Profit is the long term objective but is far from being the primary objective for many campaigns either in the short or long term in both B2B and B2C.
Jordie mentioned cost avings options. Ther are many others e.g. list building, recruiting cutomers, testing propositions/pomotions/pricing, launching new products & services, CRM activities, research, channel integration development etc can all be more important metrics. Profit need need not be even relevant or measurable in some campaigns.
Good to prompt the debate, however.
by Dayne Shuda
Thanks for the comment, Terence. I agree with the items you and Jordie have both mentioned. I think they all lead to managing the overall profit of the business, though. Like Jordie mentioned. It’s not always about measuring just profit, but the sources of revenue and costs.