Back to Basics with Email Marketing

Natalie Lin, Analyst (林楓 / 分析師)

Natalie is an Analyst covering AppWorks Accelerator and Greater Southeast Asia. Before joining the team, she worked in the search engine marketing and email marketing teams at Zappos, America’s leading shoes and fashion online retailer, where she primarily focused on KPI management, campaign optimization, and project management. Born in Canada and raised in the Middle East, Natalie returned to Taiwan for high school before moving to the US for college and work. She received her Bachelors of Marketing at Case Western Reserve University in Cleveland, Ohio. Outside of work she likes to read, travel, and play video games.

About a month into AppWorks Accelerator AW#16, one of the startup founders approached me with a problem he was facing.

“My EDM (Electronic Direct Mail) person is leaving my company. Should I continue sending emails out to my customers? I don’t have a lot of time to dedicate to this type of marketing…what are my options?”

To answer his first question, yes. Absolutely. His second question required a deeper dive into the fundamentals of email marketing. In this blog post, I will explain the virtues of implementing an email marketing strategy, how to analyze data from your emails to simplify your marketing strategy, and what actionable takeaways you can use to create value for your customers through email marketing.

Why Email?

Email marketing is known as a way to improve your retention rate and increase the LTV of your customers. I experienced this first-hand in my email marketing role previously at Zappos, a subsidiary of Amazon and a leading online retailer of shoes and clothing. This marketing channel was strategically focused on the retention of existing customers for the company. When I asked the founder who posed the aforementioned question if his competitors were sending emails to their customers, what do you think his answer was? By implementing a deliberate email marketing strategy, you’re creating value for your customers in the long-run by offering relevant content instead of being seen as a platform for one-time use.

One of the most important KPIs for any business to measure is ROI (return on investment). How much bang can you get for every buck you spend? Compared to some other marketing channels that require you to invest a lot of your time and money, email marketing has for years generated the highest ROI, aptly dubbed the “king of the digital mountain.” Not only is sending emails incredibly cheap but it is also estimated that for every dollar spent on email marketing, there is a US$ 44 return to be had.

As more and more of the world’s population make the move online, email’s influence will continue to grow. Almost 46% of the world’s population are active internet users and one of the first things any digital user needs is an email account. Progressively, websites are requiring users to sign up and login with email accounts for access to content and services. With emails being completely free to create, email accounts are expected to grow at a faster rate than internet users worldwide as many users have multiple email accounts for different needs, so the market is only expected to grow over time.

Be that as it may, not every startup needs an email marketing strategy. Perhaps you’re still in the very early stages of your startup. You’re swamped with building an MVP, your SEO needs work, or you don’t have any customers yet. Acquisition of new customers may be more important than retention efforts. It wouldn’t make sense to spend time sending emails to your (lack of) customers. One day though, you’ll start focusing on building a, hopefully, life-long relationship with your customers. It will be worth your time to start thinking about what to do when that moment comes.

A “How To” Guide to Email Marketing

You either have never tried sending emails out to your customers or you already have some data you can use to improve your email marketing strategy. If the former, there are a multitude of blogs and articles that can help you get started. As mentioned above, email platforms won’t put a strain on your budget as there are many that offer free or affordable email services to use, such as MailChimp, Amazon SES (Simple Email Service), and even one of our own alumni NewsLeopard (AW#4). For this particular case, the founder was using MailChimp, which had a pretty good UI but had some reporting features missing that I would have liked to use. I’d like to add that one specific advantage to using a startup email service such as NewsLeopard is that they are more flexible with pricing if that’s a big concern of yours and can customize services and features to your needs. So for beginners, we highly recommend NewsLeopard.

Before you begin any sort of marketing campaign, you need to determine how you’ll measure the success of your campaigns. What KPIs should you look out for? Which KPIs do you need to focus your efforts on? While these questions sound similar, they are actually quite different from one another. Take a look at some of the important ones related to email marketing campaigns.

For optimization, you mainly want to focus your efforts on improving your open rate and your CTR (click-through rate).

Open rate = the number of times a user opens your email in their inbox.

Your open rate will tell you two things. The first is how well you’re managing your email lists. Not all your customers are the same. Some might come to your site and but not purchase anything. Some may only purchase once and are unlikely to return. Your favorites will probably come back again and again to buy your products or use your services. Therefore, you’ll want to organize your email lists accordingly. If you have the time to dedicate to this, you may want to create different email campaigns depending on what type of customer you’re targeting. If you don’t, my suggestion is to focus on the ones that are engaging with your emails – they’re more likely to benefit from your future emails.

The second thing that open rates tell you is how engaging your subject line is. Obscure or unrelated subject lines will only confuse your customer – you have one chance to get them to click into and read your email. When the founder approached me with his campaigns, I took a look at his subject lines and the accompanying open rates and came up with the following suggestions:

If you have the time, you should test out what types of subject lines work best for you. After some time collecting data, pull a report of all your campaigns (include subject lines as a column) and sort by open rate. It will give you a high-level overview on which subject lines work and which don’t.

CTR (click-through rate) = the number of times a user clicks on a link in your email

Your CTR can tell you a number of different things: how compelling are your images and do you even need them? How coherent is the format/design/structure? How engaging is the message? How relevant is the content? Does the length of the email matter? Depending on your business, you’ll get various answers to these questions, and the only way to find the answers is to test out different strategies of building an email. After looking through the founder’s email campaigns, I realized there were some tests that can be performed to improve CTR:

  • Images vs. text: a well-known media company, theSkimm, is a subscription-only newsletter that sends out text emails of news stories that are intended to be simple and easy to read. Maybe your customers are looking for something minimalistic and straightforward. If your business doesn’t benefit from the power of images, this might be a good test to run.
  • Formats: let’s say images are helpful for your customers. You can test out the types of hero images to use (the main image at the top of a section in the email). You can test out whether tiles or banners work. What colors do your customers respond to? If you work on SEO, it’s similar to how you would think about structuring your website. A quick tip: clear text is vital. Extravagant backgrounds that drown out your text will only confuse your customers.
  • Messaging and CTAs: what kind of content will engage your customers? Depending on your overall marketing strategy, are they looking for something short and sweet, or do they want you to write more personal thoughts like a blog? If you have multiple CTAs, you can also dig deeper and see what content your customers are clicking on. If they are scrolling all the way to the bottom to click on certain links, you could start putting those links at the top of your next email.
  • Timing: when is the best time to send an email during the day and during the week? Consider time zone differences, especially when you’re in the US and have to find an optimal time for both east coast and west coast customers. Are your customers checking their email during work hours or on the weekends? Also for holiday promotions, creating a calendar schedule will be helpful; instead of sending a Mother’s Day promotional email the day of, send one a week before so your customers have time to shop.

If you have the time, you should definitely test out what works in the content of your email and what performs poorly. In the same report you pull for open rate, sort by CTR instead and dig into your emails that have high CTRs and compare them with the ones that have a low CTR. The quality of the traffic you’re driving to your site will depend on your CTR.

There are so many resources out there that will help you identify what you can test to improve open rates and CTR. There are also some other KPIs that you should keep in mind, although you don’t necessarily need to optimize for them because open rate and CTR should be able to give you enough information to explain these other metrics.

Conversions = the number of actions/orders a customer has taken/placed on your site.

This one is obviously important in many ways, as you want to make sure you have a good return for all the effort you’re putting into creating emails. Keep an eye out for what types of emails are driving conversions however email marketing is not just about getting your customers to buy. It is about building a relationship with them so if your email is still engaging and useful but doesn’t lead to sales, it can still be considered a win.

Unsubscribes = this is pretty self-explanatory.

Decreasing unsubscribes is not necessarily a good optimization strategy because customers unsubscribe for all sorts of reasons but it’s a good metric to pay attention to for signals on what’s working and more importantly, what’s not. You’ll notice around the holidays your unsubscribes will increase; everyone is sending emails then and your customers might be unsubscribing en masse. Don’t take it personally.

Again, go back to open rates and CTR. Those metrics will help you identify the strengths and weaknesses of your email marketing strategy. Using the metrics I mentioned above, I was able to give some actionable takeaways to the founder and some advice on how to simplify his email marketing strategy so that he can continue to engage with his customers through email.

What’s next?

The most important takeaway from this post is a reminder that using data to drive decision-making can result in high ROI and a better relationship with your customers. Remember to test and look at the performance results of your tests. In the end, you’ll find that email marketing is an effective, easy, and affordable method to develop customer loyalty and increase sales. If you ever have any specific questions about your email marketing strategy, please don’t hesitate to shoot me an email!

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Photo: Pixbay