If you research email marketing tools for any length of time, you’re bound to come across statistics like these:
- Email marketing offers an impressive ROI of $36 for every $1 spent (Litmus). Unlike paying money for retargeting ads, the cost of sending an individual email is almost $0.
- Combine this with more than 4 billion daily email users, it’s no surprise 37% of brands plan to increase their email budget.
But what do these numbers mean for your email marketing campaigns? Do your email campaigns really drive the metrics you care about? Understanding the impact of your Customer Relationship Management (CRM) and email campaigns is crucial. It not only helps you gauge the effectiveness of your strategies, it also gives you insights into how you can deliver the best experience for your users and customers .
This blog post will guide you through a three-tiered approach to measure the impact of your CRM/email campaigns.
How to Measure the Impact of Your Email Campaigns
Tier 1: Gauge the Overall Impact of a Campaign
The first step in measuring the impact of your CRM/email campaign is to understand its overall effect on the metrics that matter to your business.
According to a study by Forrester, businesses that leverage CRM effectively have seen sales increase by 29%, sales productivity by 34%, and forecast accuracy by 42%.
- Key Question: How did this campaign in total move the metrics I care about?
- Approach: Implement a holdout strategy where a small percentage of users are excluded from receiving all steps of the campaign or email flow. Instead, they might only receive transactional emails like 'Welcome to [Your Company]'. You can then compare the impact on metrics between the holdout group and all other users.
- Outcome: This approach will provide the impact of your CRM/email campaign on the metrics, giving you a holistic view of your campaign's effectiveness.
Source: customer.io
Tier 2: Determine the impact of individual emails
The second tier involves understanding the performance of individual emails within the campaign. A Litmus report found that brands that A/B test every email see email marketing returns that are 37% higher than those of brands that never include A/B tests.
- Key Question: Which emails drove the performance of the metrics I care about?
- Approach: In your product analytics or attribution tool, create reports that attribute actions you care about (such as users making an order) to emails. To do this, tag your email Call To Actions with UTM Parameters and see which clicks led to sessions on your site. You will need to decide how to give each email credit (it may be that you only care about the last click).
- Outcome: This approach will allow you to stack rank emails in order of how they led to outcomes, helping you identify which emails drive results and which need improvement.
Tier 3: Measure the impact of individual components within emails
The third tier involves scrutinizing individual components of your emails, such as the subject line, content blocks, or Call To Action (CTA) wording. For example, personalized email subject lines can increase open rates by 26%.
- Key Question: How does changing this subject line / CTA impact conversion?
- Approach: Conduct A/B tests within the platform and use relevant leading indicators (open rates, click rates) to see the impact. You can also tie this back into tier 2 to see the impact on outcome metrics as well.
- Outcome: This approach will help you understand how minor changes can significantly impact conversion rates, allowing you to optimize your emails for better performance.
Bonus Tier 0: The overall impact of all of your email marketing campaigns, combined
You can also add a tier that’s similar to Tier 1, but instead of creating a holdout group for specific campaigns, you create a holdout group for all of your email campaigns.
- Key question: How impactful is my whole lifecycle marketing program at driving the metrics that I care about?
- Approach: Most commonly called a ‘Global Holdout,’ you need to create a segment of users in your email marketing tool and ensure that these users do not get any email marketing campaigns (often this involves restricting sends to only essential transactional emails). Similar to Tier 1, you then compare the key metrics of this group vs. other users.
- Outcome: This approach will help CMOs and Heads of CRM figure out the total impact of email marketing.
Design Your Email Marketing Campaigns for the Results You Want
The key to successful email marketing lies in continuous testing, analysis, and optimization. While it’s possible to achieve a 36x ROI with email marketing, getting to this stage involves truly understanding what works and what doesn’t. Measuring the impact of your CRM/email campaigns is a multi-tiered process that involves assessing the overall impact, evaluating individual elements, and analyzing individual components. By following this approach, you can gain a comprehensive understanding of your campaign's effectiveness and make data-driven decisions to optimize your approach.
