Make More Money From Managed Email

Are you avoiding revenue by underspending on email campaigns? How 5 key strategies increase annual email budget by $876, 000 but return $49.5m in new revenues and $19.8m in new operating margin.

Part Of Our Series On Improving Multichannel or Cross Channel Data Driven Customer Experience Success

Today?s customer increasingly interacts with business and non-business organizations across multiple channels. Different customer types or segments prefer different channels and any given customer may look like different people depending on how they behave and the channels they use (i.e the ?persona? they appear to be).? The successful organization of today and tomorrow needs to gain data and information from every interaction, combine that with data available from 3rd parties about the customer and apply increasingly sophisticated behavioral models that use analytics visualization to predict what a customer wants next and how they want it and then target and personalize interactions to ensure every customer interacts the way they want and need to.

A typical customer uses a combination of online and offline channels as they explore options to meet their wants and needs, search and compare products and service options including pricing and eventually move to purchase or transact, receive whatever it is they were looking for and then operate or execute with what they have purchased.

Mobile devices continue to transform these customer journeys as a customer may be engaged with email, social media, talking of iChatting with a contact center or even looking at websites on a smartphone or a tablet.

A series of recent reports from market leading analysts and customer experience technology platform providers have demonstrated that customers prefer to become aware, explore and research online, on TV / Radio or in print, or through community insights on social media but overwhelmingly prefer to be ?driven to purchase? in response to personalized, targeted emails from organizations they trust.

For this kind of multichannel company email (and it?s sister capabilities of SMS Text and Mobile App Push) is increasingly the ?tip of the spear? in successful customer experience management. A world class organization must have a world class email management capability focused on excellence on each of the 6 key components:


However, email management is one of the least understood, most unmeasured and often most unglamorous customer experience capabilities despite increasingly being one of the most profitable.

5 Key Email Related Strategies That Have Specific Impact On Revenue:

1. Increasing email campaigns alignment with the multichannel experience can deliver 75% improvements in transaction results, examples include:

– Personalized thank you email following a purchase online or in a store offering complementary products or services and exclusive promotional messaging

– Abandoned online or retail shopping experience following up on an abandoned online cart or even tracking ?showroom? interest in store

– Targeted email offers based on a partner experience or an inferred behavioral experience (e.g. you loved our wine at your favorite restaurant now buy it at our store)

2. Improved email design improves results by over 50%, examples include:

– Improved, more attractive and more compelling designs gaining attention with average consumer email interaction time currently at 3 secs such as including the customers name in the subject line

– Increased relevance of content and messaging to the appropriate stage within the customer journey and supporting a customer?s specific interests such as an accessory for the item purchased last holiday season

3. Improved campaign execution through improved tools improved campaign effectiveness by more than 50%

– Automated data and event based triggers for email launch based on a customer?s inquiry and review of a particular product or paying a bill online

– Email formats by target device

– Improved coordination of email and mobile text messaging and ability for customers to express preference

4. Improved campaign analytics and optimization supports 100%? improvements in campaign results, examples include:

– Deeper understanding of campaign effectiveness and the linkages between email campaign actions and business results across customer journeys including transactions by message and customer segment

– Improved visualization of results including color coding and innovative trending representation allowing real time adjustments and responses to campaigns will change results by 25% to 50%

5. New and improved platforms improving targeting and? messaging improves results by over 100% including:

– Improved data about the entire customer journey including data from third parties like partner based purchase or review

– Improved monitoring of customer email interaction behavior like delete without open, and spam trapping

– Shared behavioral models and effectiveness learnings across multiple platforms and companies


How An Increase Of $876,000 In Annual Email Budget Returns $49.5m in New Revenues And $19.8m in Operating Margin

A strategy review process has identified that additional sales opportunities are available and that incremental online revenues including email, deliver operating margins of 40%, much higher than overall 30% company margins.

-??????? A $1b multichannel store, catalog and online company generates 30% or $300m in operating margin and has 10m customers in its online database.

-??????? They send 15 email campaigns a month, each email campaign reaches 10% of the database for a total of 15m emails a month or 180m emails a year.

-??????? They have incrementally built a team of 3 full time people to create and execute email campaigns at a total annual staff cost of $150,000. Additionally there are 15 ?content creators? in the business units across the organization who provide campaign content as a part of their role.

-??????? They use a cloud based email platform that costs $3 per month per 1000 emails for a total platform cost of $45,000 per month or $540,000 per year

-??????? They have a 0.25% success rate in driving transactions resulting in 37,500 transactions a month or 450,000 transactions a year (i.e. 99.75% of emails serve to simply raise awareness).

-??????? Each transaction generates $40 in revenue or $12 in operating margin

-??????? Email delivers a visible total of $18m in revenue and $6m in operating margin a year, additional revenue from awareness improvement is understood but challenging to measure.

-??????? With a total current annual platform and staff cost of $690,000 this is an operating margin based return on investment of 8.6X

Executing all of the top 5 recommendations could increase email results by 375% or an increase of email results to $67.5m in revenues. The additional $49.5m in revenues will generate $19.8m in additional operating margin based on higher online / email operating margins.

To capture this requires 4 key changes in business strategy and an associated increase in annual investment from $690,000 to $1,566,000. The $876,000 in additional investment delivering an additional $19.8m in operating margin is a return on investment of 22.6X rather than the traditional 8.6X return, 3 times more profitable.

The 4 pronged strategy executed is:

-??????? Retain an external campaign strategy, campaign design and build and campaign analytics and optimization team increasing team size and competencies and an increase of team cost from $150,000 to $525,000 performing high powered strategy, analytics and optimization for the first time and producing far more compelling and brand enhancing content.

-??????? Development of improved analytics driven visualization dashboards to help drive improved campaign reaction time and accuracy for a one-time development cost of $300,000 which equates to an annualized $100,000 using a 3 year allocation model.

-??????? Replacement of the current email platform at a one-time conversion cost of $500,000 which equates to an annualized $166,000 using a 3 year allocation model.

-??????? Increase annual operating cost of the new platform from $540,000 to $775,000 per year including new purchased data feeds.

Additionally a number of softer benefits have been identified which have distinct business and financial benefits but are harder to quantify.

-??????? Greater connection to customers.

-??????? Greater insights into customer needs.

-??????? Ability to upsell and cross sell to customer social network friends.

-??????? Increased ability to deploy new products and services to the customers

More importantly all of the alternative strategies that have been identified to grow company revenues including building more stores, creating alternative business alliances or buying another company cost significantly more to achieve the same results with significantly lower probability of success.