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"Our email campaign got a 108% open rate." "Average industry click-through rates are 4.2%" "Our email campaign generated a response rate 5 times greater than direct mail."
Lies, Damn Lies.
While perhaps not actual LIES, there are a number of email metric white lies and half truths that continue to pervade the industry. Paradoxically, accurate and detailed metrics are one of email marketing's greatest benefits. It is important then, that email marketers take a critical look at (their own or others') email statistics before making key decisions or benchmarking their program's performance. This article will explore a few of the most common untruths in email marketing, including:
- The highest open and/or click-through rates in a split test wins.
- Industry average open and click rates are XX% and XX %.
- XX% of recipients opened our email.
- "Response" rates for email are X times greater than postal mail.
The white lies come in two basic flavors:
- Definitional: Many companies define differently terms such as open rates, response rates and conversion rates.
- Misleading: These can be incomplete statistics that point to a potentially incorrect conclusion. Or, in the case of industry averages, the base statistics are too narrow or biased toward the source's clients to be considered "industry averages."
Many of the untruths in email marketing actually involve a combination of misleading and definitional statistical lies, making it even more challenging for the average marketer to make sense of things. To help you navigate the murky waters of email metrics, we've attempted to shine some light on four of the most common email metric lies.
The Top Four Email Metrics Lies
Lie #1: The highest open and/or click-through rates in a split test wins.
A common technique with email marketing is to conduct split tests to compare the effectiveness of subject lines, creative approaches, offers, etc. Marketers will often then email the rest of the campaign or the next campaign with the version that had either the highest open rate or click-through rate (or both). The reality, however, is that the email opened or clicked on the most may not be the version that produces the best results.
For, example, we have seen ecommerce split tests where the email with a lower click-through rate will produce a higher number of transactions. The reason frequently is that the lower CTR email was of greater interest - but to fewer people.
So how do you make sure your stats aren't lying to you? It is important to track results beyond open and click-through rates all the way through to your desired action - whether it is a purchase, downloading of a white paper or registering for an event. One of the simplest methods is to use Web site tracking, such as EmailLabs Action Tracking, which entails putting a single line of code on each Web page that you'd like to track. This enables you to track the actual actions taken on your site, such as a visits to an order confirmation page.
Lie #2: Industry average open and click-through rates are XX% and XX %.
Various companies report "industry average" email metrics such as open, click-through and bounce rates. We all love these statistics, but let's be clear - they are not industry averages. What the statistics usually are is a snap shot into the average results from one company's client base. Unless your profile is similar, then the "average statistics" are probably not a good benchmark for your company's program. Factors that influence these "average" statistics include: types of emails sent (newsletter, notification, ecommerce, etc.), industries, sophistication of senders, size of lists, source of addresses, amount of personalization, nature of relationship with recipients and how they define their metrics.
So how do you use these reported industry stats? I suggest using them as goals rather than clear benchmarks. For example, if your first newsletter generates a 25% open rate, but you read of a 40% industry average, establish internal targets and steps to achieve open rates of 30% and 35%.
Lie #3: XX% of recipients opened/read our email.
Open rates are tracked using a transparent one pixel gif image hosted on a server just like the viewable images in an HTML email. As a result, any action on the recipients' part that attempts to load the "open gif," will count as an open. This includes the Preview Pane in Outlook, for example. On the opposite end, text messages that are opened but not sent in HTML/multipart format and/or opened by a non-HTML compatible email client will NOT be reported as an open. (There are many other reasons an email that is opened may not be reported as such, including images being disabled and the email being opened offline after download.)
The generally accepted definition of open rate is "unique emails opened as a percentage of emails delivered." Some companies measure open rates based on total opens rather than unique opens (many people will open an email several times), leading to inflated open rates. Additionally, many companies report open rates based on the number of emails sent rather than emails delivered (delivered = sent - bounced).
Some marketers also falsely assume that an "open" actually equates to an email being "read," which is often far from reality. For email marketers, what is important is to set a definition that works for your company, and then consistently benchmark against your program. Focus on how to get your open rate to 40% from its current 30%, and don't worry about reports of a 70% open rate.
Lie #4: "Response" rates for email are X times greater than postal mail.
Many companies in the online space loudly proclaim that email "response" rates are several times greater than traditional postal direct mail. For example, one company claims common response rates are 5-15% for email versus 2-3% for postal mail.
The first problem is the definition of "response" rate. In direct mail, response rate is the percent of people who responded by calling, returning a business reply card, registering online, visiting a store, etc.
In email marketing, the metric known as "conversion rate" is generally more consistent with direct mail's "response" rate. Email click-through rates typically range from 2-15 percent, with conversion rates (actions taken as a percentage of unique click-throughs) generally running in the single digit percent range. Rates can vary widely, however, based upon what is being offered, the strength of the landing page, etc. For ecommerce, for example, an email campaign with 0.25% to 0.50% of orders sent is generally considered pretty good.
So the reality is that email "response" rates often may or may not be higher than direct mail. But because emails cost significantly less to create and distribute, email marketing generally produces a much greater return on investment.
Lastly, though, pitting email against direct mail is a short-sighted argument. Smart marketers know that there is a role for both postal and email marketing. Integrating telemarketing, direct mail and email marketing together generally produces the best results.
There are of course, many other white lies or half truths in email marketing that we haven't addressed. The keys for email marketers are to resist benchmarking your program against the "industry average du jour" and to base critical campaign decisions only on facts, not assumptions. Email provides marketers with an incredible number of available metrics - just be careful how you use them.
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