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GUEST COMMENT Email marketing – how retailers are performing
by Jennifer Watkiss
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Keeping up with industry performance and statistics is useful when evaluating and seeking improvements in both a brand’s email marketing tactics and its strategy. However, what applies to the marketing industry as a whole might be different to the factors impacting specific sectors. This article looks into the findings for the retail sector, contrasted with three other sectors, enabling marketers to both compare and apply the data to their business.
The data is based on the 2014 Email Marketing Industry Census, conducted by Adestra in collaboration with Econsultancy, that surveyed over 1,100 respondents – mainly in-house marketers. The four sectors highlighted here are (by number of respondents): retail, publishing and media, technology and telecoms, charities/government and non-profit.
Email ranks first for return on investment
Across all four sectors, email marketing is ranked number one for return on investment (ROI), ahead of other marketing channels such as SEO, content marketing and paid search. Quite a mean feat for such a mature channel. When we delve into the individual sectors, we see that retailers value email marketing the highest: 83% say that ROI is ‘excellent’ or ‘good’. Publishers come second with 74% and tech and non-profit trail the pack (69% and 66% respectively).
Yet there’s still lots of room to improve performance
When asked how marketers rate the performance of their email marketing, the answers were surprisingly frank. Most indicate that this channel is seriously underperforming, especially given the ROI possible (see previous point). Only retailers rate their performance as mostly ‘good’ or above, with 53%.
At the bottom of the table, only one third of tech companies rate themselves as any good. This is surprising, since technology companies are generally the best poised to take advantage of a software solution.
Using more email service provider (ESP) functionality is key to success
The more marketers understand and use the capabilities available within their chosen email provider, the more they can exploit opportunities, and the more scope there is for better return. When asked ‘What proportion of your email system’s functionality do you think you are using?,’ publishing companies lead the way – most are using over 50%. Worryingly, 60% of non-profit and retail companies are using less than half of ESP functions. This may point to the growing role of ‘marketing technologists,’ specifically tasked with filling the gap between what is possible with today’s technology, and what is currently being used.
Take another look at your time management
It’s a given that marketers will always struggle to fit everything they want to do into the time they have. Here we look at a breakdown of a typical email campaign to establish if the right mix of tactical and strategic actions is happening, with an eye to improving results. Activities comprised: strategy and planning; design and content; data; optimization; transmission; reporting.
Technology companies spend far more time on strategy, design, and data – over one fifth spend more than 8 hours on each of those areas per campaign (that’s 3 full work days PER campaign, per week). It might be that the design and data skills could be handled more efficiently by outsourcing, leaving more time to spend on optimization and reporting.
Non-profits spend least time on optimization and strategy – 13% spend no time on strategy and over one third spend no time on optimization. With no strategy or optimization in place, campaigns are seriously at risk of failure. This may explain why this sector are bottom of the table for ROI.
Publishers and retailers stand out as having the best mix of time management across activities – other industries could learn from their example.
Increase email personalisation and optimisation
This year’s census also measured the type of activities email marketers were undertaking. While there’s quite a mix of email practices, some figures stand out. Non-profits had the narrowest activity spread, saying they don’t use nine of the 15 practices at all. Publishers top the charts in five areas: using transactional emails for marketing; content personalization beyond just name; regular list cleansing; sharing content on social media; and optimizing email for mobile devices.
Retail came top in just two areas: basic segmentation; and promoting customer ratings and reviews (as you might expect). In addition, retailers performed quite well for optimizing email for mobile devices (with 51%).
However, retail came bottom in five areas: multichannel triggers (joint bottom with non-profit sector), regular list cleansing (28% say they don’t do this at all, almost twice that of technology companies), use of video content (surprisingly more than half don’t do it), lead nurturing (60% don’t do it, double that of other sectors), and also lead scoring (78% don’t do it).
Each business could do with taking a step back to evaluate their practices, as many have a direct impact on results. They should ask why other sectors have adopted certain practices. Start with low hanging fruit, before getting into more complicated activities. For example, simple segmentation, list cleansing, and re-marketing campaigns can see ROI soar.
Make more of mobile
We’ve seen so far that charities and non-profits may be lagging behind in some of the practices and ESP functions available to them; they are also the least mobile optimized. This is surprising in a business to consumer environment where regular contact is essential. Almost three-quarters of charities admit to having a non-existent or basic strategy for optimizing mobile email.
Technology firms once again lead the pack with over a quarter being quite or very advanced when it comes to their mobile strategy. This could be due to having more technologically-minded marketers, or perhaps because it is necessary for success with a more technically savvy audience.
Retailers are mid-table – 59% have a non-existent or basic mobile strategy, while 19% are quite or very advanced.
Get to grips with automation
There’s been a lot of discussion about marketing automation over the past few years, and for good reason: it can deliver considerable commercial benefits. So how have email marketers fared? What are the benefits and how are they using it?
When asked about benefits, marketers across the sectors are generally in agreement. Increased relevancy, increased engagement, and timely communications are the top three recognized benefits, with relevancy taking top spot for all sectors. Retailers also identify commercial benefits – importantly, marketing automation drives revenue.
In terms of automation implementation though, things are not looking so positive. Despite being aware of automation’s benefits, around half of all companies admit to struggling with its actual implementation.
When asked ‘Do you send out automated emails based on the following triggers or behaviour?,’ technology companies use the most triggers, which could indicate why they have been the most successful in automation implementation. Retail and publishing follow, while charities are lagging behind.
The most popular triggers for retail include subscription or signup to website (56%), abandoned basket (53%), automated response to website visit/sign up (53%), date notifications (eg birthdays, anniversaries) (31%), lapsed customers (33%).
What’s holding you back?
Non-profits perceive the most barriers to effective email marketing, double the number experienced by publishers or tech companies (6 vs 3). This may suggest that as companies start using more ESP services and adopting more practices, these become less of a problem. The three key barriers are similar for all sectors: lack of strategy, quality of data and lack of integration. For retailers, they also identify lack of segmentation (52%) as their biggest hurdle.
Looking into 2015
Which three areas of email marketing are the focus this year? Companies are looking at a range of priorities, but data quality, strategy, automation and segmentation are of high importance.
It is interesting to note the sector variations. Retailers are looking to do more personalization and dynamic content. Non-profits are also looking at improving relevancy.
The results for retailers are close – they are looking at implementing a range of options. The top three were: segmentation (39%), automated campaigns and strategy and campaign planning (joint second at 29%), and personalisation and dynamic content solutions (joint third at 28%).
The future of email is exciting and still full of potential for this continually evolving channel. A number of developments will have clear outcomes:
• Automation and platform consolidation will help productivity
• Improved data and segmentation will improve relevancy
• Better strategy and planning will help both deliver and measure results.
These all indicate that email marketing for retailers is not just here to stay, but with such positive results and so much room for growth, it’s set to perform even better, and deliver continually increasing ROI.
Jennifer Watkiss is head of marketing communications at Adestra [irdx vade]
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