The Truth about Measuring Email Marketing Success: Profit and ROI vs. Click and Opens
When measuring the success of an email marketing campaign, many financial marketers can become hyper-focused on clicks and opens. While these are important metrics to track and optimize, they don't tell the whole story - at the risk of missing more significant opportunities to drive organizational performance.
Did this email cause someone to open an account for the product it promoted? Did it potentially even cause additional product adoption? To fully measure the success of email marketing campaigns, we need to look at other important KPIs, such as conversions, profitability, and ROI.
One of Stephen Covey's most powerful insights in The 7 Habits Of Highly Effective People was to "begin with the end in mind." So let's discuss why it's essential to focus on these additional metrics and how to track them.
For our marketing campaigns, we should be asking the following three questions:
What are the institution's most engaged and profitable customer segments?
What segments should we be cross-selling? With what products?
What is the profile of our most "ideal" prospect segments to target? What products are the most likely to want or need?
So let's break down how we measure the results of the questions above.
Question 1: What is the institution's most engaged and profitable customer segment?
We first need to understand profit with this question. We cannot answer this question if we don't have a baseline of understanding how profitable our customers (not just overall products) are in their overall relationship. So the first step is building a current account level profitability model which can be scaled, customized, and accurate enough to drive insightful answers. This white paper goes into greater depth about measuring relationship profitability.
After developing a relationship profitability model, it is vital to tie that model directly to each customer and track that information back from the email provider and the core system.
Question 2: What segments should we be cross-selling? With what products?
To cross-sell segments is to know your customers' lifestyles and needs and be able to classify customers into segments to make your customer journeys more manageable. If you are not tracking individual customer data and can efficiently work with that data, cross-selling something relevant and valuable is not targeted or personalized.
No one wants to be "sold" a product they don't need. However, everyone could use help with attaining their own financial life goals. The only way to understand those goals is to understand your customers. Unless you know your customer segments well, what motivates them, their life plans, debt and savings, and life stage, being relevant is nearly impossible.
Furthermore, many financial institutions will define segments or personas based on their internal data but fail to combine that with third-party lifestyle segmentation data. What's missing is the ability to look into your market and target prospects who can be identified and targeted.
More on data-driven segmentation here.
Question 3: What are the best new customer segment(s) to target? What product(s) should we sell them?
You must first understand who you have been historically performing well with and which segments represent your ideal growth segments to understand the best new customer segments to go after. Understanding your growth segments requires you to classify your customers into segments and understand the market opportunity of those segments in the areas you serve. The market opportunity of those segments needs to be indexed to see how each measurable segment is performing.
After understanding and defining each growth segment, the real work begins on profoundly understanding the goals of those customers to understand what products to sell and what products still need to be developed.
Access to the correct data to assess each campaign is critical in determining the campaign's true success. We can't tell how well we're doing if we don't measure against our overall objectives.
Not all data is created equal. While having clicks and opens in an overall email is essential, we don't know if our actions are working without a clear understanding of the impact of providing bottom-line growth.
You cannot improve what you cannot measure, and you cannot grow if you measure the wrong data.
The Strum Platform creates an easy way to evaluate your customer data, ask questions and execute a campaign along with trackback accurate ROI results.