Measurement Myopia is Eroding Email’s Potential
It’s no secret among email geeks that email dominates when it comes to driving a powerful return on investment. Are we limiting its potential, though, by viewing success through a narrow lens? April Mullen of SparkPost will share thought-provoking ideas on how we can better tell the email success story.
About April Mullen
April Mullen is currently the Director of Strategic Insights at SparkPost. She has over 13 years working in email for brands, agencies and in martech. Outside of SparkPost, Mullen has been an Adjunct Professor of Digital Marketing at the University of Missouri-St. Louis since 2013. In June of 2016, Mullen co-founded Women of Email, an organization with over 4,000 members on six continents that is aimed at driving positive change for women in the email marketing niche. Mullen was named to DMNews’ 40 Under 40 list in 2018 and DMNews’ 2019 Marketing Hall of Femme Women to Watch list. She contributes thought leadership at conferences and through writing for industry publications, including Forbes and MediaPost.
Hi, thanks for joining today, I’m really excited to be here at Inbox Expo. So I want to introduce myself very quickly for all of you on the line. I’m the director of strategic insights at Sparkpost. I do a lot of our research content and evangelism for the company. I’m also co founder and board member at Women of Email. So I have likely met you through one of these two avenues. And I’m also an adjunct professor of digital marketing at the University of Missouri St. Louis. I’ve been doing that since 2013. But I think something else is pretty important to talk about right now. It’s just the current state of things in the world. So I thought, why not be a little more personal this time, and talk about how I’m coping with my shelter in place. I’m clearly in my home office, as all the presenters have been this week. And I’m coping through snacks, online workouts, my gym just went online. So I’m like, Yay, get to work out again. video chats had a had a video happy hour with some of my colleagues today. Instagram story updates have been a huge part of my life. And playing with my dogs, I just got a new puppy. So my big dog now has a little friend. So that’s been really exciting. So in a month, where I thought I was going to be travelling quite a bit, I’m actually home and I’m trying to embrace it as much as I can. So I hope you are as well. So on the topic of the current state of things is they’re hard right now, email, marketers everywhere are scrambling to figure out their plans and how they’re going to adjust based on everything that’s been happening. And it just feels like it’s like a little sad, I won’t lie even even myself as a marketer and preparing for this presentation. It felt a little, you know, not not as important as the things going on in the world. But we have to carry on. And I was looking out on Twitter, looking at different things that people were saying, Megan b’shoys and said something, it’s a new day, and new emails need to be sent like, you know, the sentiment of keep on keepin on. Jenna, Tiffany in the UK said marketing today should be about being helpful, generating value and being human. And I think that was the case before all of this Coronavirus stuff came about. But it’s really become pronounced today with just the context of where we are. So, you know, to to the topic at hand that I want to talk about the measurement myopia is, I feel like we’re kind of stuck in this not seeing the forest for the trees. And this will become a little bit more clear as we dive more into the presentation. But you know, we tend to, to look at the individual trees, ie campaigns, but we’re not really understanding how things perform overall. And we have quite a few myopic points in the way not just in the way that we execute, but also the way that we measure because measurement often drives what we can actually do in our tactics. So if you’re being judged on KPIs that don’t line up with being more human, in, in certain aspects of the way that email is, is the direction that it’s going today, then, you’re definitely not going to be able to execute on the things that you want to do that, you know, are more strategic that you know, are more human centred. So I think it all starts with measurement. And so that’s why this topic is really important to me. And just some things that have kind of come out this week. Again, more on the negative side, but you know, brands sending emails to subscribers that never signed up for email, you know, sending emails about COVID-19 that maybe prevent critical news and updates from from reaching recipients. So I’m Stephanie Griffith saying take a step back. And I think that’s really kind of an important point for us right now is let’s take a step back, and let’s figure out how we can be more human in our marketing. And that starts with measurement. So the first blind spot that I want to talk about is around deliverability. So I think as someone that came from the marketing side, I started off on the brand side, I sent my hit send on my first email 1314 years ago at this point. And I’ve often thought that deliverability there’s like this big dichotomy, the separation between marketers and deliverability experts, but I think the tide is changing. There’s more more bridges being created. We’ve seen that with with the emergence of beamy, which I’m not going to talk about in this presentation, but you know that that’s a tactic that will help get more branding and the inbox, but it also helps with deliverability. But deliverability has been a Pandora’s box of confusion for marketers for a long time. And, and I and I show the email conversion funnel here purposefully as inverted because your subscribers have already, they’re already in your funnel. So the whole idea is to continue to drive them up your funnel and keep them from falling out. So you know, your advertising team has probably done paid media, maybe you’ve optimised your website for SEO, you’ve probably done a lot of different things, to get subscribers to come to your website to sign up for email to make a purchase. So they’re already in your funnel. And so I’m going to kind of take you through this funnel view as we’re going through this presentation. But the idea is that, you know, this is a very simplified version of the funnel, but the widest part of that funnel is delivered the the deliverability. And so you want to continue to move them up the funnel, but if they don’t get through the delivered part, then they’re never going to make it to the next step. And, you know, something that’s been a staggering statistic for many years is that many permission, emails end up in the spam folder, something like 20%, we’ve even seen clients that have come to us new clients that come to us, and we see that they have even 40 to 45% spam filtering. And that’s just a real tragedy. And your typical ESP reporting is not going to tell you, if something made it into the spam folder or not, it’s going to tell you, you know that it was delivered, but that delivered might be counting the spam folder. So there’s a huge upside for a lot of companies out there that might be hitting the spam folder, but may not even realise it. So for example, we had a new client that we were working with, they had a 4% open rate, which is abysmal, like it’s just terrible. And they had a nearly perfect sender score as identified by one of our competitors, when in reality, they actually had a 45% spam rate. And so they were not making it to the inbox. This explains why their open rate was so poor. And so we were able to help them with that. A case study for a large global retailer, online, and brick and mortar, they improve their spam rate by just 1% and put over a million dollars in their annual revenue on the books. So, you know, getting your email seen and in the inbox actually will help you drive additional revenue. And I’m going to have gifts throughout this presentation because well, I feel like we could all use a little cheering up. So you know, stop carrying around all that spam. Like, understand how many of your emails are going to the spam folder, and and indefinitely have some inbox intelligence, you’ll probably need to work with an analytics email analytics provider to help you with that, and sparkpost. Through our acquisition with a data source last year, we have those inbox intelligence tools that can give you a very detailed look at how your emails are performing. Okay, so moving on to the next one. blindspot number two, this is around clicks. So clicks we often think of as engagement, right? It’s, you know, somebody clicks, we think, Oh, great. They’re, they’re moving up this email conversion funnel, and they’re getting even closer to conversions. But clicks do not always equal engagement. And I think a lot of people are often surprised by this. These could be people that are clicking to unsubscribe. And I know I was several years into my email career before I realised this. So what you’ll need to do is, first of all you need to find out from your ESP, if the unsubscribes count toward clicks. If they do, then you need to take those clicks, subtract out the unsubscribes. To get your true click number if you want to know that like the truly engaged people that are clicking on your emails, and I will say actually a lot most of the espys are tracking this way. So you either have to custom configure to be able to track unsubscribe clicks separately, or you know, you’ll you just need to know that you need to back up those unsubscribe link clicks from your click engagement to get to the true engagement number. Okay, so the next one is the third blind spot is around unsubscribe rate. So, you know, people typically think of unsubscribe rate is being pretty straightforward and unsubscribe being you know, anywhere along this journey. They have decided to, to click on the unsubscribe link, and they fall out of your funnel. But it’s not always as simple as calculating, you know, the unsubscribes and having the delivered as the denominator. So what what I’ve seen often in my career is, and this is from an actual campaign that I analysis that I had done with a client, I’ve obviously very much over simplified this. But from one campaign to another, your unsubscribe rates, they’re not going to vary that much, you’re going to have like, here you see, point 02, going up to point 05 percent down to point 03 percent, then 2.04%. These are tiny, tiny, fractional differences from one campaign to another. So not i’m not saying that looking at unsubscribe rate is a bad thing, I think we need to continue looking at it. But if you take unsubscribes divided them by unique clicks, instead, you’ll get what I am calling the disengagement rate. If someone else wants to give it a better name, please let me know. But taking the same data set that I just showed you the same chart that I just showed you. And breaking it down, taking instead of looking at delivered as the denominator, taking clicks as the denominator, you start to see campaigns that stand out is actually being problematic in terms of the clicks, actually leading to the unsubscribe. So I actually think most brands should be looking at unsubscribe rate and disengagement rate. Because in a past life when I was on the brand side, this is actually how I was able to get laser focused on showing my colleagues where our problem campaigns were, where these campaigns not only just didn’t resonate, where it was like people ignored it, which I’ve heard people call the pocket veto, or the emotional opt out, but the people who are actually upset enough to unsubscribe. And you could do the same thing with your spam complaint rate as well, if you wanted to really get granular and see where the problems are. So highly recommend this to clients. Because it just gives you another view. And kind of like this cat here, because it wouldn’t be a good presentation. In a in a during a sad time without a cute cat, you’re going to be surprised if you run this through campaigns that you’ve you’ve done recently, you’ll actually see some outliers that are a little bit more problematic. And, and you’ll know that those campaigns were probably not beneficial. And maybe you need to change your segmentation, or your targeting, and maybe change your content, but it will tell you where your problem spots are. Okay, so now we’re going to talk about a blind spot that relates to revenue. And it seems like revenue would be pretty clear right? Now, you know, there are some companies and verticals out there verticals, companies within verticals that have trouble tracking conversions. So when I’m asking this question about revenues, pretty clear, right? I’m talking about like e commerce, maybe even travel, where someone can click through, go to the website, make a purchase. And so typically, you can see the revenue as a direct result of someone clicking through the email and then converting on the website. But there are some things I think we need to consider as we look at revenue by the different campaigns. So a suggestion that I like to make to clients is subtract the value of unsubscribes, from your revenue for our campaign. And some have taken this advice. Some are like yeah, I don’t know, I don’t want to reduce the look of my campaigns to my management team. But the reason that you want to do this is because again, kind of like the the prior metric that I share, I think it’s important to to really track the value of the loss of subscribers. And I think this actually lends itself well to elevating what we do is email marketers, and the importance of our channel. So I’m not going to go through this entire equation here. But if you would like to calculate the cost of an email address, so that you can back that out of your unsubscribes you know, please check out the slide. It has the equation. You may have to work with your internal finance team to you know, get to some of the details. Here, but this is definitely a good way to understand the cost of losing email subscribers, so that you can then better protect those subscribers, when people are asking you to send COVID-19 emails to your entire database as an example. And you’ll be armed with the right data to be able to push back and really show the cost of how hard it will be to to get these subscribers back. And the loss not just in in the future value of the email address, but also the cost it it took to acquire that customer, which is often a lot more expensive than the retention efforts. And I just thought this was hilarious, you got to know in the hold’em, you got to know when to fold them. So this is just another way of showing how your subscribers you know, can can really elevate you. Or they can really, if they unsubscribe there, they really are damaging the revenue that you have in your campaigns. Okay, so the last blind spot that I would like to talk about today is customer lifetime value. This one is really important to me, because I think the funnel is bigger than a single campaign. And what I mean by that is, you know, I mentioned earlier that the subscribers are already in your funnel, and you’re trying to move them up. But I think we could think bigger than just the delivered opens, clicks, conversions, but having them stay in the funnel. So that campaign to campaign, even if they don’t engage in some way, you’re still tracking the value of that individual subscriber or customer. And this is how you’re going to be able to shift the narrative internally from what kind of promos do we want to put in this campaign and, and getting away from people calling it a blast and, and getting away from it being just so myopic, and campaign focused and moving into a, a focus of the customer, and the importance of delivering a set of experiences that are really going to delight them in and derive value from them, and for them. So this is really again, all about putting the customer at the centre of your strategy. So with this one, we’re really going to think big, this is so much bigger than the typical email reports that that we would run in our programme. So in order to get to customer lifetime value, you know, you want to multiply the product of value of email address by the estimated average number of years that an email subscriber is likely to remain active on your file. So this is really going to give you that long term view and understand the value of individual subscribers over time. So I’d like to walk you through what I think is a big problem in marketing today. And that’s the well the ideal scenario is that the cost to acquire a customer, the CAC, so this is what your counterparts on the advertising side of your team are doing. So the cost to acquire a customer is ideally, much less than the customer lifetime value. So the idea is that, you know, the customer lifetime value, ideally, there’s a fast payback period on those acquisition costs, and that the lifetime value is much higher, so that when you’re looking at an individual customer, you’re actually you know, operating at a profit. But what’s actually happening in marketing in a lot of cases is that the cost to acquire a customer is often much higher than the customer lifetime value. And there are a couple different issues here that I see today, when I talk to companies is the customer lifetime value is either a not being tracked, or it’s lower than the cost to acquire a customer. A lot of times it’s the problem of not tracking customer lifetime value. It’s it’s very challenging. So I don’t want to reduce how difficult it is to calculate customer lifetime value. customer lifetime value is tremendously difficult. And I will say there’s no perfect equation. When when creating customer lifetime value equations for your company or as an equation for your company. What you want to keep in mind is that you need to make sure everyone buys into what goes into that calculation. And you have to do something that’s very befitting of your culture, and has the endorsement of people in finance, marketing, your CEO, probably even us to believe in it. So bring people to the table. Get them to to contribute To what they think the customer lifetime value calculation is. Because otherwise, you’re gonna be throwing money out the window. A lot of companies really are if you if you follow the the tracking on the individual consumer the money you’re spending to get them in. And the experiences they have along the way, a lot of times, customers will just unsubscribe quickly. They don’t stay on the list very long, because we just continue to blast them. And I say blast. I hate that term when it comes to email. But we really are based on how my inbox looks and just the different views that I have. As someone that’s worked in this industry for a long time, we’re blasting subscribers, and it’s just a highly offensive way of doing business. And so we’re throwing money out the window. We’re not really maintaining subscribers on our lists or our databases. And there’s just so much more that we can be doing here to be human centred. So thank you for listening. I just want to briefly talk about spark posts as we in here. We are the largest email sender in the world, we spend almost 40% of the world’s commercial email for the back end of various mahr tech companies. We also work with a lot of tech companies, financial companies, and we have a 90% view of the world’s commercial email landscape meaning we have really robust analytics, we have many different data sources that contribute to the views that we have of the email landscape. So if you are looking for really good email deliverability analytics, like we’re here for you, if you need competitive intelligence, or if you need to do large volume sends, we would be really excited to hear from you. So thank you so much for listening today and ever forward. We will get through the next few months. And if you ever have any questions about deliverability or email measurement, feel free to reach out to me at my email address here. And if you’d like to ask me some questions, go ahead and enter them in the chat window. Thank you