Monday, March 24, 2008

The Only Email Benchmarks That Matter Are Your Own

iMedia has a worthwhile article about the dangers of "keeping up with the Joneses" when it comes to email benchmarks. Spencer Kollas makes some interesting observations about how email marketers should be more focused on improving their own metrics rather than trying to ascertain and achieve industry benchmarks. As he says, "Say your industry average is at 88 percent, but you have a delivery rate of 92 percent. Does that mean that you shouldn't keep working to possibly get to 95 percent?"

While I agree with Kollas' observations, he doesn't really touch on the most troubling and confounding aspects of email benchmarks: There is no such thing as an objective benchmark. There are simply too many variables that impact email metrics to make it worthwhile to evaluate an email program against a single number that represents an industry benchmark or average.

For example, open rates can be significantly affected by whether list hygiene is managed well or not. I once worked with a client contact whose boss evaluated his performance based on the size of the company's email list. With the goal of growing the list to the largest possible number, no list hygiene activities (such as deleting email addresses that are unresponsive or bounced) were performed. This company's open rate was poor and delivery became difficult due to spam complaints, but they succeeding in building a mammoth list.

Another factor that can have considerable impact on open rates is the method used to collect subscribers. Email marketers who collect opt-ins carefully, gathering permission only from people who visit or purchase from the brand site, will find recipients more interested and more inclined to read email messages received from the brand. But email marketers who pursue more aggressive methods for collecting subscribers such as sweepstakes and contests (or who use foolish methods such as harvesting or buying email addresses) will generally add people to their database who are less interested in brand messaging and thus are less likely to open emails received from the brand.

Open rates--one of the most sought after benchmarks--can be impacted to a substantial degree by the decisions and management of the email marketer. For example, sending an email campaign that can achieve an amazing open rate is really quite simple; simply cull your list of anyone who hasn't opened your most recent two or three email messages. This strategy will result in your list being reduced by 90% and it won't increase the total number of emails opened, but the open rate you can achieve would be phenomenal.

Another factor that impacts open rate is the content and offers sent to the email database. If Brand A always sends offers of 50% off and Brand B instead sends messages extolling the virtues of their products, it is likely Brand A will have a higher open rate. This doesn't mean Brand A has a better email marketing program--in fact, constant deep discounting tends to hurt a brand and adversely impact profit--but if we only look at a single open rate benchmark, it is easy to see how Brand B might feel their email efforts were falling short.

Finally, there's the common bugaboo of any sort of benchmarking--are the companies against which you're benchmarking really in the same business? Take the travel industry: one might find an email open rate benchmark for the industry, but all travel companies are not the same. A company or agency that specializes in expensive adventure tours, which their customers may take only once every several years, will likely see a much lower open rate than a company who specializes in discount, last-minute packages to Vegas.

Ultimately, Mr. Kollas' iMedia article is correct--the only benchmarks that really matter are your own. A steady program of testing different email attributes and creative in a way that delivers incremental improvements based on your own brand and your own list is far more worthwhile than chasing nebulous benchmarks.

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