As a marketing technique, sometimes I feel that people undervalue email as a channel because it’s ‘cheap’ and easy deploy. The knock on effect is that it can receive very little in the way of board-level attention. This makes it really hard for marketers to get more budget to support their email marketing campaigns.
However, there are other ways to think about email, which might help you make a more powerful case!
The DMA’s email marketing council did some research which found that the lifetime value of an email address to an organisation was on average £9.11
It is worth examining this £9.11 figure in a bit more detail. It is an estimated average based on ROI from transactions relating directly to email marketing – a snapshot in time across a broad spectrum of different verticals, strategies and techniques.
This figure will be different for every organisation, but working out what it is for your company is an exercise I would recommend you conduct on a regular basis.
How to make the CEO sit up and take note
I was inspired by a conversation I had some time ago with Stefan Elliot a colleague of mine on the Partnership hub at the DMA’s Email Marketing Council where he described emails lists as your ‘Email Asset’. I am surprised how few people still to this day do not properly understand the value of their data, and types of data with it.
Identifying this is a useful starting point for assessing the value of an address over time but an internal benchmark can also assess a number of contributory factors as well.
It all adds up
Taking this one step further, it can help to assign specific monetary value to each data element you hold in your database. For example, what value would you put on holding a record for Age (£1), Location (£0.50) or Eye colour (£0.10) etc.. You decide based on your business.
Then add these amounts to the value of the email address, and consider the total value of a completed database record. Next, consider how many users you do not hold this data on and therefore the opportunity lost here.
It’s possible to take this further by assigning a value to actions including an open, a click, purchase and so on. The value of each potential recipient is far greater if they are active and engaged. They are more likely to be engaged if you have put in place a strategy to collect this additional demographic data and used it to personalise your communications.
This does take some time and sometimes budget, but for the results it achieves it is worth it.
Use this benchmarking scheme to help you to make a strong case for email, by doing the reverse in your next meeting with the Board. For example, a 100,000 strong email list is, as a statistic alone may be fairly meaningless to a board of directors. But when you use the £9.11 figure ( or let’s round it up to £10 per email for now to make the maths easier) to attribute to it a value of £1,000,000, they will start to take note! This is a company asset they should after!
And what happens if email marketing isn’t carried out effectively? Well, it damages this asset. Let’s say you see a 10% unsubscribe rate due to poor design or a lack of a call to action, that’s a £100,100 loss! This is a great way to build a business case to convince your FD or C-level executive to invest in a new email template design, testing strategy, list building strategy or some additional copywriting resource!
Invest in your email asset
And the even better thing is that, if you invest in email marketing, your asset can grow in value. Once you have this initial benchmark in place, the emphasis should move to ways in which you can increase this value.
Which segments are underperforming? Are there any similar traits that can be identified? Could you be getting even more out of your top performing email addresses? Do you need to build a more concentrated campaign for particular subscribers, perhaps with a targeted micro site to convert?
There is a small, but growing elite of email marketers who already understand and are applying these principles, reaping the benefit. The refined nature of email marketing makes it a fundamental part of the entire marketing mix – building brand identity, developing and prolonging relationships whilst remaining visible. Elite emailing will increase the real value of your email list and could make £9.11 seem like a drop in a much larger ocean.