Email marketing is one of, if not the most, measurable communication channels in the space. The challenge with these metrics is that everyone calculates and views them differently; so as email marketers look to learn from one another, they may not actually be comparing apples to apples.

The DMA recently released survey results that quoted open rates on a house list at nearly 20%, a click-through rate of 6.64% and a conversion rate of 1.73% - so what does that mean to you and your program? Here’s what it says to me:

1. An open rate of nearly 20%...does that mean that 80% of your email recipients don’t open what you send them? Most likely (or are not turning on their images, which is possible – but doesn’t explain away just how soft this reality is). We, as an industry of marketers, need to do a better job. We need to provide better content, a more relevant experience and a motivation to compel our subscribers to open our email communications. It also means we need to take a serious look at our database. It may be a fine time to renew your recipient's permissions. Just like you clean out your closet in the Spring – sometimes you need to lose some of the extra baggage in your database. Remember – it is about the QUALITY of your database not the QUANTITY.

2. Click-through-rates (CTR) of 6.64%...my first question is, “is that a figure calculated as a percentage of messages delivered or messages opened?” I am going to hope for our sake that it is a percentage of delivered – because if we are providing our subscribers with content and calls-to-action that only drive 6% of those that opened the message to click…we are in big trouble. So if nearly 7% of the messages delivered generate some kind of click action, we still have plenty of room for improvement.

In our attempts to be brief and scannable within our email communications, have we taken it too far? Are our messages unclear or just not compelling? Time to do some testing to find out! We need to spend more time analyzing WHAT it is that motivates our customer base. It may be our desire to offload distressed inventory with a free shipping offer, but the customer may prefer a %-off or $-off coupon code that would send your CTR in to the double-digits. That wouldn’t be so bad now would it?

3. Yikes! Only 1.73% convert?! I am not going to attempt to assume the calculation here. The point here is that we work in a channel that is more easily personalized, more measurable and more real-time than direct mail or telemarketing and yet our efforts under perform them all. Why is that? Are the DM and phone calls more personal? Are we moving too fast to keep our customers best interest in mind and provide them a satisfying experience?

Let’s strive to up these numbers next year – we need to rival the conversion numbers of telemarketing. We can’t be as bothersome as calls during dinner time, can we?

Bruce Biegel, Managing Director of The Winterberry Group gave a very interesting keynote at the Email Insider Summit in Captiva Island, Florida last week. He presented his outlook on the email marketing industry from an investor’s perspective, including shifts in marketing spending, email revenue projections and mergers and acquisitions. The content was so valuable, that I have recapped his presentation for you here.

First the good news. According to Biegel, GDP Growth is back. Q309 officially marked the end of the recession; however, unemployment is still up, which is holding back spending. Companies are finally shifting dollars back into new customer acquisition, but they’re doing it cautiously because spending is lagging. We are seeing some growth in advertising, but not a lot. Surprisingly, television advertising is up 5.6%, while everything else is still down. Print advertising has been hit the hardest, with a significant amount of marketers abandoning it in favor of digital channels. According to Beigel, U.S. digital ad spending in the US will hit $154.3 billion in 2010.

The Winterberry Group focuses their investments exclusively on the Advertising and Marketing industries, and is therefore in touch with a broad swath of marketing technology providers and agencies. To stay current with market demand, Winterberry is seeing a widespread trend where traditional offline agencies are attempting to move into digital marketing.

Marketing Budgets Are Shifting Online
The good news for email marketing providers is that we’ve already mastered the digital space and continue to innovate in it. To keep pace with increased demand, email suppliers are increasing their staffing levels. Email is the #1 area where marketers are increasing spend, but that shift isn’t showing up in the marketing forecast because of declining CPM fees and the fact that marketers have slashed their budgets during the recession.

Of the $1.4 billion that Forrester Research projects will be spent on email marketing in 2010, 80% of email marketing spend is in retention marketing, 17% is spent on acquisition marketing and 3% is spent on transactional email. Acquisition direct mail spend is making a small come back, but retention direct mail spend is moving almost entirely to email. According to Biegel, if email can pick up a fraction of direct mail spend, it will beat its forecast. He predicts that email marketing spend will hit $1.6 billion instead of $1.4 billion in 2010 because of this shift.

The Move Towards Relevant Messaging
Marketers have started consolidating data and systems down to one centralized system so that they can leverage it to send targeted, personalized communications based on specified preferences and behavior. Surprisingly, only 16% of e-commerce companies send personalized or behavior-based email, leaving a huge market for that type of integration. According to Biegel, there is more data available from online transactions than there has been in the offline database in its entirety. This is a lot to manage, so there is a big push by enterprises to consolidate those reams of data down into a single source and make it actionable.

To plug into this new centralized data structure, email marketing providers today are moving towards becoming an "integrated campaign execution stack." Biegel’s message to ESP’s is that if you only provide email, you'll be left behind. When selecting an email marketing vendor, he recommends that marketers look for a provider who offers email in conjunction with social, mobile, e-commerce and analytics integration, services, and an international presence.

Will Social Media Kill Email? Absolutely Not.
Email is still the most powerful way to reach consumers. When asked if social media is going to kill email, Biegel stressed that social media is a partner to email. It's not going to stand alone or replace it. Interestingly, he pointed out that of the $1.2 billion projected for social media spend in 2009, $700 million of that figure is display advertising and $200 million of it is applications. Should that really be categorized as social media spending or is that display and mobile? This drives home how pervasive social media is and how it touches multiple departments and marketing channels. As the wild social frontier continues to evolve, email marketers can rest easy knowing that the channel still remains the backbone of business critical communications.

According to Forrester Research's 2009 ROI of Relevance report, highly segmented email marketing programs generate 2 - 5X the performance of non-segmented programs. This may seem like a natural email marketing strategy for large enterprises with reams of customer data available to them; however, centralizing all of that data and making it actionable from a marketing perspective is no easy task. InterContinental Hotels Group recently co-presented a case study with StrongMail on how they are tackling this challenge at OMMA Global in San Francisco earlier this month. Here are some highlights from that presentation.

Only 50% of big companies currently segment their customer data for use in email marketing campaigns. This is because consolidating data is hard…many companies have disparate databases and some executives don't want to give marketing control over channels like customer service that are a critical part of the customer lifecycle. IHG was fortunate to have a management team that saw the benefits of creating a customer-centric organization and set about making it a reality.

IHG has 180 million guests per year and 40 million priority club members. To initiate the email customer lifecycle, IHG captures 70% - 80% of their email opt-ins on-property in their hotels. Prior to each stay, IHG sends a pre-stay email to initiate the guest experience, which are transactionally driven by data to sell upgrades, car rentals and other relevant offers prior to each trip. Then IHG follows each trip up with a post-stay email encouraging the customer to set their email preferences.

This is all pretty standard fare for the travel and hospitality industry, but what's unique about IHG is how they measure success. IHG measures email effectiveness by engagement. What matters most is how engaging the email content was – not how much revenue a specific email generated. Instead, they measure revenue by customer and let each channel optimize towards maximum performance. This holistic approach prevents IHG's various marketing channels from competing against each other for revenue and enables email to be the backbone of the customer lifecycle and experience.

Using this framework as a backbone, IHG employs a mix of specified preferences and behavioral targeting to generate dynamic content for custom promotional emails that are based on the types of offers that the recipient has said he or she would like to receive. To prevent cross-channel conflict, IHG dedicates content slots in every transactional email to their local hotels, enabling both corporate and the property to leverage a single customer touch point to promote their respective offers. Most importantly, IHG's email marketing team carves out time in their busy schedule to focus on segmentation strategies so that they can constantly improve on their already successful programs.

So is all of this work worth it? If you judge by action, most marketers don't appear to think so. Less than 30% of marketers take the time to personalize email marketing campaigns because email's return on investment remains sky-high without a targeting strategy. However, if you decide to put in the time, the payoff can be significant. According to Forrester Research, monthly email revenue can lift from $159K (no targeting) to $540K (web analytics) to $664K (segment/target) to $840K (social targeting).

That's some food for thought. If you're thinking about implementing a targeting strategy, we offer this piece of advice: don't try and boil the ocean. Start with the explicit information that you have in your database and then begin to layer in behavioral data after you've mastered phase one. The evidence is clear. No matter how basic the targeting, the rewards will be worth the investment.

The blogosphere is a buzz with tired arguments over whether or not social media signals the death of email. The most recent prediction comes from Matt Cain of Gartner, signaling that “by 2014, social networking services will replace e-mail as the primary vehicle for interpersonal communications for 20 percent of business users.” This very well might be true, for the 20% that need to collaborate, however it in no way replaces the need for bi-directional communication.

Anyone that engages in a debate over which channel is superior is approaching this from the wrong angle. Not only do both channels complement each other from a marketing perspective, they are significantly more powerful when used together than either channel alone. What’s most interesting is that while the talking heads continue to debate the value of one channel vs. another, the 800 pound gorillas in the email marketing and social media spaces are answering this question for us by taking convergence to the consumer.

The Market is Shifting
In the past three weeks, Google, Microsoft, and Facebook have all announced plans to integrate email and social media for their end users. Google and Microsoft plan to integrate social functionality into Gmail and Outlook respectively, and Facebook is rumored to be launching its own webmail service. These announcements are significant in that, if all three are successful, the consumer’s view of email and social media will become highly integrated during the next year or so. As email marketers, it is important to prepare for this shift by developing an integrated marketing strategy for the two channels now. Get ready for your viral marketing programs to become exponentially more powerful.

StrongMail has created a whitepaper on this topic that you might find useful called Email in the Age of Social Media. Other email marketing whitepapers that can help you ensure that your program strategy is current include:

22 Quick Tips for Better Email Marketing >>
Mastering Your Email Reputation: Seven Strategies for Improving Deliverability >>

If you'd like to address the contacts in your email database based on customer life cycle, but don't know where to start, I recommend that you read my latest article in BtoB Magazine.

Knowing where your customers are in the customer lifecycle and sending them relevant messages for each stage is an effective way to increase conversions and customer satisfaction. As I write in my article, you can start out small and then expand your campaigns as you get more comfortable with it.

In today's MediaPost Email Insider Column, I use the game of football to provide some insights into how email marketers can improve the success of their programs. I break it down into investing in the quarterback (you) and having a good offense (driving innovation) and defense (accessing quality data). Read the article for more information and to find out my favorite team.

I've been working in the email marketing space for many years. Periodically I see email promotions, or components of messages that trigger the, "why didn't I think of that?" reflex. On the rare occasion that I have those moments, I am compelled to write about them - and give kudos when they're due. So today, I pay homage to Southwest Airlines for providing me with a "why didn't I think of that" moment and for that I thank you.

This promotion almost completely makes a subject line strategy completely moot in driving open metrics for the Southwest Click 'n Save email program entirely, and in its place? Good 'ol fashioned bribery. It's genius! I mean, really, why didn't I think of that? It starts with a very direct subject line, "Winter fares on sale, plus a chance to win*!" I'll admit, you do have to open this message to see why this is so smart - but if you do, here's the treat: "Keep opening our e-mails and you could win free travel!" There it is, the bribe to continue opening their email. I love it! (check it out for yourself)

Now, as I scrutinize it more closely there are some opportunities to take a great program and make it outstanding. For example:

• - Socialize this heck out of this email and ask subscribers to share this great promotion with their social networks



• - Leverage sites like Twitter, Facebook and even TripAdvisor to tell the masses - further minimizing the need for a subject line



• - Put it right in the subject line, "Open our email and you could win free roundtrip tickets*"

Southwest has done a terrific job at incorporating content that is viral, engaging and fun in their email campaigns but unfortunately are not actively asking their subscriber base to share it or pass it along. The assumption is that the recipient may share with others, but if you don't ask you can't really expect it.

The other question that looms (which triggers a series of other questions based on the response), albeit a terrific promotion, what's the objective? I assume it is either to drive more opens or drive more subscribers. If it is the former, there must be a direct and compelling correlation between open and conversions. If so, is that correlation minimized because the open behavior is less genuine? If is the latter - then why is there no direct call to share with friends?

Or maybe, just maybe - it is just a fun way to gain entry in to a sweepstakes and I am making it way too complicated - which is ALWAYS a possibility. What do you think? Like it, love it, indifferent?

As my first post on the Email Marketing Insight blog, I thought I would give you some background on me.

When I tell one of my three children to hold the railing when coming down the stairs or not to touch the hot oven, they are taking advantage of my years of experience negating minor burns and abrasions.

In my non-mommy role, there is hardly a day that goes by that I’m not explaining to a colleague, prospect or client the “why” of the methodology behind an email strategy or the technology that drives it. The moniker of “email expert” didn’t come without years of research, hundreds of hours of coding experience, industry conferences and countless debates on best practices with fellow email cronies. Did I also mention that I’m a very humble person? (smile) Title aside, I’ve earned my email chops and in the end, what’s in my head can help you. All you need to do is take notes and be ready for answers that you might not want to hear.

As email marketers, we are all at different stages of our career and the sophistication level of the marketer on the other end of the line often correlates with the amount of information that is digested and eventually incorporated. My role is more about taking a concept and serving it up in a way that is understandable from the tech folks to those looking at the bottom line. With the tug and pull of getting the most of your email program in the shortest amount of time, those little nuggets of goodness might get lost. Sure, search long enough and you can eventually find someone who will tell you what you want to hear; however, good things don’t come easy. Engaging with an email expert and giving them your ear can definitely make things easier.

I liken my role in the email world as more of an email doctor. I can help fix problems but also provide a bit of insight on the best plan to keep your email programs healthy and fit, as well as ideas on how to grow big and strong. So I might say “because I said so,” but know that I’ve got your best interests at heart. If you have got the time to listen, I’ll gladly explain why.

As StrongMail spends more time working with email marketers to accelerate their program through the social web, we find ourselves constantly reminding clients that email is still the preferred channel for customer communications with brands.

Nowhere is this more true than in service-oriented or transactional emails. Read my latest MediaPost Email Insider post as a reminder about how critical it is to ensure that your transactional email streams are just as relevant as your Facebook Fan page!

I had the opportunity to speak at the Canadian Marketing Association annual meeting in Toronto this week, and the topic was email marketing ROI. As some of you may know, I was a CPA before I jumped head first into digital marketing and, in particular, email. So I feel just as at home in Excel as I do in email marketing applications. Now, I know what you are thinking -- how does one go from accounting to blogging about email marketing? Well, it probably has something to do with the fact that I was a terrible accountant. However, I was able to learn a few things that have served me well over the years, and believe it or not, a few of the lessons provide insight that is easily applied to the email channel and how we can look at calculating program effectiveness. Read the full article at my MediaPost Email Insider Blog!