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?

I just returned from two days at the Canadian Marketing Association’s annual conference, CMA Next 2010, where I was tweeting from the event in conjunction with The Email Guide. The event programming covered a broad swath of topics from branding, traditional advertising and product marketing to web analytics and social media. The presenters were some of the best and brightest minds in Canadian marketing who over the course of two days, challenged our assumptions and made us think, talk and laugh out loud. The hard work of programming co-chairs Mitch Joel of Twist Image (@mitchjoel) and Sandy Perlman of Microsoft Canada paid off and I left feeling enriched and informed. I have recapped some of the best takeaways from the event for you below.

1. Don’t Suck. That pearl of wisdom came from Avinash Kaushik (@avinashkaushik), Analytics Evangelist for Google and author of Web Analytics 2.0. According to Kaushik, if you suck, nothing else matters. “Sucking” is obviously a relative term, which he defines in terms of engagement. How are people interacting with your content? Are they engaging with your website or are they visiting your site and leaving after looking at the first page? If they “came, puked and left”, you need to stop worrying about everything else and fix it. He also stressed that speed and access to information should be the #1 feature of your website. Don't sacrifice functionality for sexiness. If your website isn’t fast, you will die.

2. We Live in an Age of Conversation Marketing. Participate and Empower. Kaushik also reminded us that marketing today has to be conversational – it’s time to stop broadcasting messages to our audiences. We need to use engagement metrics to analyze effectiveness in today’s marketing world. It’s no longer about reach metrics like fans, followers and hits (which he defined as “How Idiots Track Success”.) The new age of marketing is customer-centric. Abandon your comfortable metrics and start leveraging engagement metrics like your website bounce rate, clicks, email opens, social media sharing rates, re-tweets and Twitter lists. Once you have these metrics identified, optimize your marketing strategy, creative and technology choices to support improvements in those areas.

3. Challenge Everything You Know About Marketing. Ken Wong (@kbw2009) of Queen's School of Business and CMA Hall of Fame inductee dropped a bomb on the audience when he told us that the C-Suite tends to view marketers as “margin sucking maggots.” Most companies know that they need to market their way out of a recession and yet the first thing that the executives cut when tough time hit is marketing. Why? Because marketing doesn’t appear to have a direct effect on profitability, the #1 factor affecting the success of a company.

The NYSE 2010 CEO Report ranked Marketing/Advertising Initiatives dead last in Profitability Impact for 2007. In the same survey, only one marketing variable entered into the equation as mattering to shareholders – brand strength – and it ranked second to last. It gets worse. According to Wong, only 18% of 545 executives in UK firms rated their firm’s marketing effectiveness as better than good and 36% rated it fair/poor. In fact, you are 2X more likely to get a marketing job in the UK if you have a finance background than if you have a marketing background. Ouch!

Why do executives view marketing as wasteful and expendable? Because we’re not communicating our value in terms that they understand. Marketing needs to stop focusing on market share and volume and return to building brand value because when the value is clear, you don’t need to slash prices. Price is the #1 factor in contributing towards profitability. Help your executives get there and your budget won’t be the first thing slashed during a recession.

4. Great Brands are Simple and Clear. Canadian design guru and television celebrity Debbie Travis (@debbie_travis) reminded us to keep to basics when building your brand. The best brands know what they do well and focus on that. When you try and take on too many ancillary things, you dilute your brand and loose strength and meaning. There are two aspects to every brand: brand character and brand value. Character is how you make a first impression. Brand value is about loyalty. You should develop a clear strategy for both sides of the brand equation. Do you provide enough value to keep your audience coming back for more?

5. Your Company Can Make A Difference for the Next Generation. One of the more surprising and inspiring keynotes was a joint presentation from the Ontario Power Authority, the World Wildlife Federation (WWF) and Airmiles, a Canadian frequent flier company that has penetration into 70% of the homes in Canada. This unlikely partnership was the result of three very different entities uniting for a common cause: to reduce carbon emissions while meeting distinct goals that benefitted each company.

The Ontario Power Authority needed to find alternative sources of fuel to avoid the rolling brownouts that have been plaguing the province and ensure continuous, clean power for future generations. They partnered with the WWF to develop a program that will eliminate Ontario’s reliance on coal by 2013. Simultaneously, Airmiles greened their company and became the largest rooftop solar energy producer in Canada. Now you can also redeem your miles for a transit pass, a scooter, bicycle, or other low carbon options instead of airfare. Their inspiring message was that transformative companies should use their influence beyond their four walls to change the world. Think about what influence you have beyond your own life and talk to your company about your environmental footprint. You can help change the world as well.

6. Surprise is the Key to Successful Relationships. Andy Nulman (@andynulman) reminded us in his own unique and creative way that the element of surprise is what keeps human nature moving forward. We tend to fall into comfortable patterns and are doing ourselves (and our marketing programs) a disservice by lulling our audience into complacency. Put in the time to think different and be creative each time you want to make an impression. It’s the only way to ensure a healthy, engaging ongoing relationship with your audience.

7. Friction is a Powerful Tool of Persuasion. Ad veteran Terry O’Reilly (@ageofpersuasion) had a slightly different theory about what the surprise ingredient in everyone’s marketing programs should be… friction. According to O’Reilly, friction is a powerful tool of persuasion. Only the smartest and most insightful marketers use friction to make a sale. For example, Johnson & Johnson invented a cream that healed without pain, but people didn’t believe they were being healed unless they felt a sting. J&J put a little alcohol in the cream and sales went through the roof. Marketers are social anthropologists and it’s product marketing’s job to find the right combination of ease of use with a just a touch of friction to make people want what we’re trying to sell.

8. Use Checklists. O’Reilly also referenced a study that was performed to reduce the number of accidental deaths that occurred due to human errors during surgeries. They analyzed how pilots prevented mistakes and found that they used checklists. A test group of surgeons adopted checklists and their mistakes plunged by 80%. I think everyone can learn from that one.

9. Be Open to Opportunity and Change. Howie Mandel’s (@howiemmandel) closing keynote had everyone roaring with laughter, and yet his key message was an important one. You have to be open to opportunities as they arise and be willing to adapt and change. Over the years, he has “re-branded” himself from a carpet salesman to a comedian to an actor to a game show host and television producer, but none of that evolution would have happened if he had given in to fear and doubt and not been open to change.

Similarly, we learned that Indigo Books & Music is transforming their brand, product offerings and fulfillment mechanisms in real-time to adapt to the changes in how people are consuming media. Instead of clinging to traditional books as adoption of digital readers skyrockets, they are embracing change and adapting to become a leader in this new method of consumption.

10. Never Underestimate the Power of Alcohol in Building Relationships. And finally, this oh so true statement came from the advertising veteran “war stories” panel and was the most tweeted and re-tweeted phrases from the event. I’m not sure if Mad Men’s constant drinking reflects the era or the industry… but one thing is certain. Marketers love our booze.

For a complete play-by-play of the event, I invite you to read my full Twitter Transcript posted on StrongMail’s website. If you would like to follow my coverage of future marketing events, you can find me on Twitter (@kristinhersant).

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 >>

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 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!

It seems our clients are becoming more and more focused on automation. How can email marketers leverage technology to automate communication workflows, enhance relevance and in general, do more with less? Read my latest Email Insider Blog for some ideas on how StrongMail's clients are marching towards email marketing automation.

With the hundreds of emails that I receive on any given day, an email looking like this would get passed over very quickly in my inbox.

With so much competition in a person’s email inbox, it is critical to design your email to be effective with images on and off. With the images turned off, the majority of the email above does not tell a reader who it's from or what's the call to action.

Let me walk through an example that highlights the potential impact.

 > One in five emails is invisible and ineffective due to blocked images.
    - Email Experience Council (Jan 2007)

> Let's apply the statistic above to a mailing with 1 million delivered messages. 
    - 800,000 delivered with images on
    - 200,000 delivered with images off / blocked

> Assume 50% of emails with images off / blocked were opened.
    - 100,000 total emails potentially looked over in your readers' inboxes.

In this example, wouldn't you want to have an extra 100,000 people read your email? Especially when this can be easily accomplished by tweaking your template so it still offers valuable information when images are turned off.

In terms of ROI, a few small adjustments to your emails will allow you to see improvements across every category.

Yesterday, Yahoo announced its new social, extensible email Inbox, almost a year after Founder Jerry Wang unveiled it during his keynote address at CES. This new destination blends social media with smart inbox functionality to filter “important” emails and present those towards the top of your Inbox, pushing newsletters and other commercial communications down towards the bottom.

Because this functionality is linked to Yahoo’s social media functionality – you have to befriend someone in order for their emails to take priority – this will initially spell bad news for email marketers. It is unclear whether or not they will allow individuals to befriend a brand, like they can on Facebook or MySpace. And if they do, how will they determine who has the right to send priority email on behalf of that brand?

If you haven’t tested it yet, this might be a good time to look at StrongMail partner Goodmail. Their Certified Email product is a paid service that can ensure priority Inbox delivery to Yahoo though this period of uncertainty.

With 275 million users worldwide, Yahoo represents approximately half of the world’s webmail accounts. These changes will pose significant challenges to email marketers unless Yahoo offers them a way to engage with their recipients. But for now, we’ll have to wait and see how unpredictable inbox placement will affect our powerful marketing channel.

Having just finished MediaPost’s Email Insider Summit in Park City, Utah, I can say that the email marketing industry is definitely being impacted by the recession. However, not in the way that traditional advertising and trade shows are… email marketing is rising. Apparently, senior management was listening when marketers touted email’s high ROI, because now everyone wants a piece of email – and they want more of it.

The marketers at this event were the heads of email for major brands, including Marriott International, Overstock.com and Turner Broadcasting/CNN. General consensus was that the demand for email marketing within their respective organizations is increasing, and they’re challenged with determining how to satisfy the sharp rise in demand from the various divisions and departments that they service, without burning out their list through increased volume.

As Aaron Smith of Smith-Harmon recently pointed out in MediaPost’s Email Insider Newsletter, email volumes have already skyrocketed, increasing competition for Inbox real-estate. In 2009, it will be more important than ever for email marketers to focus on optimizing their email programs to achieve more with less. Keeping a close eye on contact frequency and email attrition rates will be paramount, as will clearly communicating the value of your email list in business terms order to manage internal expectations. Bob Frady of Live Nation gave an excellent presentation on this topic. By communicating the aggregate purchasing power of their opt-in list to senior management instead of what resulted from email click-throughs, he was able to raise email’s visibility and importance within his organization to a must have for every tour and a significant driver of revenue for his organization.

In addition to optimizing contact frequency and internal communication, marketers should look to Transactional Email inventory as a potential way to alleviate the demand for stand-alone promotions. Transactional Email is opened more than any other email communication, and that valuable real estate should be leveraged for targeted cross-sell and up-sell offers.

With a little creativity and a lot of elbow grease, we have the opportunity to prove email’s value in tough economic times and gain a seat at the marketing strategy table.