By John Landsman, Director, Strategy and Analytics

Screen Shot 2015-10-28 at 3.00.19 PMSmoldering in the eternal tug-of-war between email marketers and their management taskmasters is the philosophical contention around optimal email quantities, and how deep in the customer file to mail.  A corollary issue centers on optimal email subscriber contact frequencies.

The classic discussion I’ve had with clients on these subjects usually includes someone of senior rank stating, with authority and finality, “I don’t care what you say about optimizing.  All I know is that the more I mail, the more business I drive.”

So  . . . let’s talk about that.

First, to be fair, there is more than a germ of truth to it.  We all like higher read rates.  If a mailer sends 20 million promotional emails at a healthy 20% read rate, that’s 4 million ‘read events’ driven by those emails.  But if that same mailer sends 30 million promotional emails at a less-impressive 15% read rate, the yield is 4.5 million read events, or 500,000 more actual sets of eyes on those emails than driven by the smaller send size with the higher read rate.  Assuming some reasonably positive relationship between read events, clicks and conversions, the higher mailing quantities almost certainly drive more business.  

And email’s business model actually compels this thought process.  It has lower costs than other forms of addressable messaging, and its decreasing marginal send costs are extremely attractive, especially as we head into the huge frequency/quantity email pushes associated with Holiday.   

BUT — you knew there was a “but” —  if that’s where you’re headed, then you need to keep certain factors in mind — and make sure your management knows about them too.

 

  • Know how each email campaign performed from a revenue and contribution standpoint at all file depths, even if you mailed that campaign to less than 100% of your file.  Ideally, this analysis needs to be based on incremental impact; that is, the difference between mailed and control (not-mailed) group samples extracted from the full mailable file.  The incremental revenue is then subjected to a relevant gross margin rate, and from that result is deducted the costs of that mailing, including creative, applicable campaign programming and all send costs.  That calculation yields an incremental contribution metric.  (Note:  In my ten-plus years in the email space, I have not seen much use of non-mailed control groups, and we won’t belabor that here.  But I do believe they are important to any understanding of true email impact.)  The point of this analysis is to understand which mailings do or don’t have positive impact, and at what mailing quantities those impacts are strongest from a contribution standpoint.  If your management wants to push you past a certain optimal point, you and they should at least know the costs and consequences of doing so.
  • And there are other consequences.  Even if mailings are profitable, you should know what possible over-mailing may be doing to your longer-term email list health.  Yes, you can push up the quantity/frequency throttle, but you also should be monitoring your dashboard read-outs of deliverability and unsubscribe metrics.  The hidden costs of too much email mostly point to list attrition.  Many emailers overlook unsubscribe rates when they appear to be low:  often fractions of one percent, on an individual campaign basis.  But these accumulate.  In the course of a year, over what may be many hundreds or thousands of email campaigns with ‘low’ unsubscribe rates, total unsubscribes can become a sizeable percentage of your average mailable file.  You can easily wipe-out the population equivalent of a medium-size city this way.  Each loss reflects an acquisition cost and a replacement cost.  Not to mention the cost of losing the business value of that email address.  These costs are not trivial, and you should be tracking them.
  • One way of managing over-mailing is to understand contact frequency optimization.  We’ve talked about contact frequency before in this space.  There is no single ‘right’ number, although we do get concerned when we see a client’s subscriber email contact frequency nudging past four or five per week.  And we also know that Holiday introduces a certain expanded tolerance for increased contact frequencies.  But this is mostly a matter for each individual mailer to be testing — by mailing different frequency cadences to various customer engagement segments, and then observing the impacts on opens, clicks, conversions, revenue, deliverability and unsubscribes.  When optimal frequencies are established for various customer segments, the resulting caps can help retain a large number of email subscribers who might otherwise be lost.
  • (The horn we toot so often) . . . . Make it relevant.  Customers are more likely to accept, trust, open and act upon email from senders who’ve proven over time that their email is worthwhile.  It’s about things like segmentation, targeting, personalization, and mobile-optimization.  You know the drill.  Relevance is the best tool you have to offset the possible adverse impact of higher quantities and frequencies.

 

These considerations on driving quantity and frequency management are meant to facilitate an intelligent discussion of the related trade-offs.  We understand that the object of an enterprise email activity is to support its businesses.  How that’s done is obviously a matter of management judgment.  After all, those responsible for the decisions are also those accountable for the results.  They need all the insight you can possibly give them.

 

Comments are closed.