Email marketing has always been a black box to me. Despite having a decade of experience in performance marketing across all sides of the industry, I’ve never felt like I’ve broken past the surface level of effective email marketing.
This is a strange confession to start a guide with, but worry not. Despite my lack of knowledge here, I have plenty of first hand experience with the proven effectiveness of email for driving tangible performance. Not to mention that the industry statistics back me up here on the value of this channel.
You’re in luck though, as I have cleverly conscripted Tom Wozniak, the Executive Director of Marketing at OPTIZMO (a company that lives and breathes email compliance) to provide his expertise on the subject, and more importantly, to do all of the hard work of creating this guide. Tom got his start in email marketing in the 1990s, and over the years has worked with some of the most successful email marketers in the industry. We’ve also picked the brains of email experts whose businesses rely on effectively driving performance through email marketing.
By extracting Tom’s knowledge, this guide will provide you with everything you need to drive results through email marketing. Plus, a lot of stuff you don’t need to know, but will serve you well when you’re impressing colleagues around the virtual watercooler with your extreme knowledge of the history of email marketing.
Before we dive in though, here are 3 reasons you should care about email as a marketing channel:
All of this is to say that email is indeed a big deal, and that spending a bit of time learning how to do better with Tom is worth your time. If you want to skip ahead to a part that is especially relevant to you, here is how we’ve broken out this guide:
Now you may say to yourself, this all sounds great, but do I really want to read a comprehensive guide to email marketing? Worry not! Tom and I sat down to discuss all things email on our fireside chat, so you can watch and learn from that instead:
Let’s dive in!
The starting place for many businesses that harness the power of email is using it for driving customer retention. Email is the most effective channel for maintaining communications with current customers, but you need to be careful to nurture that relationship well (and accept there will always be some unsubscribes with every email). The type of content completely depends on your industry and vertical, so we’re focusing on tips around baseline metrics and how to optimize and improve on it. This led me to my first question:
What kind of metrics should you aim for in email campaigns?
It can be challenging to set universal expectations for email campaign performance, since it varies greatly depending on the industry, audience, offer, etc. However, there are a few general benchmarks that can provide initial guidance for a new email program (Campaign Monitor):
Once you’ve developed a track record of performance as a baseline, it will make more sense to simply compare your current and past campaign metrics than to use these broad metrics. The goal will be to continually optimize your key performance indicators (KPIs) over time.
When we spoke with email experts, they all confirmed that when it comes to email, the most important thing to focus on first is making sure that you’re sending emails to an audience that wants to receive communications. Keeping to quality means that more of your emails will be delivered to the right sources, and keeps from you getting flagged as potential spam (which has serious impacts to the effectiveness of your email).
Echoing that idea, it all boils down to making sure you’re starting with your best audience and aiming to establish the best possible email campaign metrics:
While focusing on your most engaged audience may seem pretty obvious, it should always be the cornerstone of your internal email retention campaigns. There are other tricks in the book for reaching less engaged audiences, and we will go into those later on.
After you’ve cleaned up your lists and identified the audience to focus on, here is how you start optimizing:
4 best practices for optimizing any internal email program
With the advent of more dynamic email platforms having the ability to easily segment audiences and deliver targeted content to each group, it has become a highly personalized and engaged channel.
What are some general guidelines for how to segment?
Look for the natural segments of your customer base that may already exist. In your business, do you evaluate your customers by the average cost of their orders, the products they buy, specific demographic traits, etc? Depending on the type of product offering you have, these types of established customer segments can be good places to start.
Once you have those baseline audience segments in place, you can start looking at their behavior within your email program. You may consider segmenting loyal email responders who regularly open or engage with your email campaigns versus those who do so less frequently. These are logical audience segments that could reveal a need for different content or offers to illicit response.
If you take advantage of cross-sell or up-sell opportunities, segmenting those groups can also be easily applied within your email program.
One key tip for your email audience segmentation is to make sure that every segment has a purpose. If you aren’t actually using different content for each segment or need to track each group separately, then it’s not necessary to break out that segment. Don’t segment just for the sake of segmenting, as it creates more complexity in your email campaign strategy, which leads to breakage points and doesn’t deliver added value.
Expand from retention to acquisition
As long as you’re emailing engaged users with valuable content that matches their interests, even if you’re sending a ton of emails you shouldn’t run into deliverability issues. Keep testing to get that retention and engagement up!
Once you’ve proven engagement, it’s time to start testing customer acquisition by leveraging your findings and best performing email content. However, customer acquisition creates its own challenges and requires some different approaches. Before you even consider it, make sure you’re fully compliant with the requirements for email marketing as the consequences for non-compliance are very real.
Looking for the right tool for handling your email marketing? Check out Crazy Egg's overview of email marketing solutions for reviews and recommendations around the most popular options.
Email is quite a bit different than most marketing channels in that you really can’t risk winging it. Before you start, you need to make sure you take the necessary compliance steps before launching any mass email campaigns. For the US market, this is due to the CAN-SPAM Act of 2003, which set clear guidelines for companies and marketers that use email within their marketing programs.
Fortunately, these steps are not too difficult to follow:
Checklist: 7 steps to achieving CAN-SPAM email compliance *
Being noncompliant with any of these rules can have serious financial repercussions, as the current penalties can reach as high as $43,280 per email sent in violation of the law.
* Nothing in this guide should be taken as legal advice (we’re surely not qualified). We recommend obtaining professional legal guidance when it comes to your email compliance program.
Keeping on top of international email regulation
While this guide is focused largely on US email regulatory compliance, it’s important to note that email marketers have to contend with a complex global network of laws and regulations that may impact their campaigns. Many countries have developed their own sets of laws and regulations related to email marketing, but two significant ones to keep in mind are the General Data Protection Regulation (GDPR) that governs marketing and data privacy in European Union countries and Canada’s Anti-Spam Law (CASL), which sets up rules for email marketing in that country.
While every law has its own particular guidelines, most (including CAN-SPAM, GDPR, and CASL) revolve around two key principles:
Compliance is an essential part of any email marketing effort with heavy enforcement and penalties. For how we got to this point, let’s take a little trip down memory lane.
Email marketing was effectively born in 1978 - when the first unsolicited email was sent to about 400 people promoting a computer system. That initial email reportedly generated $13 - 14 million in sales, which set the bar for email marketing as an ROI superstar. This became the dream benchmark for the potential success of marketing emails sent to the right audience.
Even 40+ years later, email continues to be one of the most cost-effective marketing channels across virtually every industry. Typical industry benchmarks continue to hover around $38 revenue per $1 spent in recent years -- a 3,800% ROI -- which is completely unmatched by any other consistent marketing channel.
The email channel has evolved significantly over the decades. From the early text-only email accessed on a business computer, to what we see now - graphic intensive, interactive, and accessible on multiple devices.
Despite many pundits and industry experts regularly predicting that email was about to become obsolete, the channel just keeps adapting to meet the needs of both businesses and individuals, proving more popular than ever in 2020. When you think about it, just about everyone needs a functioning email address to easily function in the digital world, since so many websites and apps require an email either as a username or for initial user authentication. While there may come a day when email is overshadowed, or even replaced by other communication channels, that day does not look like it will arrive anytime soon.
Understanding email regulation
For its first few decades, the email marketing industry was often compared to the Wild West. Around the world, regulations were sporadically created and enforced. Email marketers certainly took advantage of the wide open industry and pushed the envelope for how email could be used to promote products and services.
By the early 2000s, many US states had passed laws attempting to regulate email marketing, but they were inconsistent and even conflicted with each other in some cases, making it extremely challenging for email marketers to be compliant in every state, regardless of their intent to follow the rules.
This situation was addressed in 2003, with the passage of the CAN-SPAM Act, which created a single set of rules for the compliant use of email marketing in the US. One key point of the law was the fact that it continued to allow unsolicited commercial email, as long as marketers followed a set of rules. Perhaps the core guideline was the requirement that commercial email includes a method for recipients to opt-out or unsubscribe from future email campaigns from the sender, and a timeframe (10 business days) for marketers to process and honor those requests.
In many ways, the CAN-SPAM Act became the foundation for the continued success of email marketing since the early 2000s. Marketers had a clear set of guidelines to follow and they were designed to allow companies to continue making very effective use of the channel. In recent years, the CAN-SPAM Act has been re-evaluated by lawmakers and while the potential fines have been increased to reflect current monetary values, the basic rules have proven their efficacy in curbing irresponsible email practices, while still supporting business.
Around the world, many countries that have created laws around email marketing have required an opt-in from recipients, prior to receiving marketing emails. The US and a few other large countries remain open to unsolicited email marketing.
Salesforce is a pretty big deal of a company - having reached $13.5 Billion Dollars in annual recurring revenues at the end 2019. The secret marketing tool that led to their early growth and overall success was outbound email. When outbound email is done right, with an aligned business model and sales structure, no other channel holds a candle to its results. Since this is an email guide, we will cover how to do the outbound email portion, but I’ll share a bit of how Salesforce’s internal team design led to their success. Let’s get started.
The keys to outbound email success
Cold email campaigns need to be executed properly to drive the desired results. Unlike retention efforts or emails sent to your own prospect list, cold email recipients usually don’t have a pre-existing relationship with you and may not even be familiar with your brand, products or services. This being the case, cold emails need to serve multiple purposes for marketers.
Critical to a successful cold email campaign is leveraging all the information you have about the recipients so that you can send targeted messaging. In the early days of email marketing, the ‘spray-and-pray’ approach was common, where marketers would simply send out the same offer to a large list of recipients and hope for the best. Since email is comparatively inexpensive to send, even these non-targeted campaigns could return positive ROI (and may still do so today). However, there are downsides to regularly sending out campaigns where engagement is low, beyond simply lower performance and ROI.
When it comes to your cold email list, here are some key things to consider:
What kind of metrics should you expect with cold email campaigns?
We mentioned previously that email campaign performance benchmarks are tricky. They become even more challenging when discussing cold email campaigns. This is because, until you mail the list you have no definitive idea of the quality of the audience. If a list of prospects turns out not to include very many recipients who would have any interest in your offer, you can expect performance to be quite poor, when compared to some of the industry benchmarks mentioned earlier. Conversely, if you mail to a list of well-qualified prospects who have already shown some interest in offers like yours, then you may achieve results that better measure up against industry averages.
In general, cold emails will usually deliver lower performance numbers across the board, when compared to campaigns sent to an established list of recipients.
4 best practices tips for optimizing cold email campaigns
Liviu Tanase of ZeroBounce shared a few more closing tips on cold outreach:
Did I forget anything? Oh right, Salesforce! Their outbound email approach and the way they structured their sales team is thoroughly covered in the excellent book Predictable Revenue. A great starting place is to check out this Predictable Revenue approach breakdown with the creator of this methodology, Aaron Ross, and how this team structure drove over $100M in incremental revenue for Salesforce (in the early days when such a figure was still significant to them.) Quick summary: Restructure the sales team to separate out Outbound SDR reps that are compensated for driving interest through massive outbound emails, and specialized account executives that focus only on closing deals.
Use these tips, optimizations, and strategies well, and good luck on unlocking your own extra $100 million in recurring revenue. When you’re ready to expand past your own internal email efforts, it’s time to start building email marketing initiatives through external partnerships:
We’re finally at email marketing partnerships, where I have more useful expertise to contribute! The first thing to keep in mind as you expand your email marketing performance efforts is how you’re going to track that performance and analyze what works.
The key performance metrics to track in email campaigns
When taking up performance email you need to focus on optimizing both your email-specific metrics and overall performance metrics.
The email-specific metrics should be easy to track through the majority of ESP (Email Service Provider) solutions out there:
You want to combine these stats with performance-focused metrics. Performance is usually tracked from the time a user clicks to the time a potential conversion occurs (or even further). Here are here the core metrics you want to focus on:
Conversion is the general term for the completion of any specific user action that you consider important, such as a purchase, sign-up, or app install.
You want to use a tracking or partner marketing platform to track users from the point they click through on your email to the point they purchase. To get started, Google Analytics is a great place to begin; however, it’s complicated to set it up correctly for deep performance analysis, and it limits you from being able to effectively manage partnerships - as your partners need to see the results they are delivering as well.
With Conversions, you want to track the Revenue you generate from the user, and any associated Cost from your paid email lists or Payout to external email affiliates. Tracking these metrics on every conversion will make your life much easier when calculating the ROI from these efforts.
If you’re using an advanced platform (IE Everflow) you can track events as well to get a better understanding of how your clicking users are engaging with your website or offering. Events can be anything from newsletter sign-ups, to visiting your pricing page, to signing up for upsell offers. Tracking events offer a much clearer picture of engagement from your email users compared to other paid marketing efforts, which lets you evaluate your future strategies much more effectively.
Conversion Rate and Event Rates:
Conversion rate is just the % of users that convert from each click that reaches your website. You can improve it through better segmentation in the emails combined with conversion rate optimization on your website or destination landing page.
Tracking your event rates becomes especially important when working with email affiliates as it provides an easy way to identify suspicious traffic: If a lot of people are converting but not engaging with your site, it’s worth looking deeper. Event rate also lets you better compare your email marketing vs. your other performance marketing channels, so see how each provides value.
Best practices for tracking performance
For tracking performance, there are a couple of methods that should be used in concert depending on your product or offering:
The goal with this is to track the user in a user-experience-friendly way that also maintains GDPR/CCPA (the California version of GDPR) compliance by not tracking personal details.
Leverage your internal email findings for your third-party emails
The learnings about what offers and messaging resonate best with various segments of your audience can be directionally helpful in plotting out your affiliate or outside mailing partner campaigns. You may learn that certain offers perform best with a particular demographic, and providing this information to your email affiliate or other partners could help them better optimize their own campaigns. While you may only be paying for results from your mailing partners, helping them optimize the campaigns they run on your behalf can make them more profitable for the mailer, making it more likely they will promote your offer, compared to some other advertiser they work with.
How to scale outside your own internal email program
Eventually, even the best internal email marketing program may reach a point of diminishing returns. Whether you have reached that point or you simply want to grow faster than your current email program can support, it is a good time to consider leveraging partners and other third-parties to help scale your email marketing program.
There are several ways you might consider developing this type of external email marketing program.
Compliance and partnerships
One of the biggest challenges in expanding your email marketing program to include affiliates or other marketing partners is that compliance can become very complex to manage. The key challenge revolves around collecting, processing and distributing up-to-date opt-out or suppression files to every email marketing partner prior to every mailing they execute on your behalf.
One reason for this complexity is the fact that you need to not only collect opt-outs from each of your mailing partners, but then process them in real time and make updated suppression lists available for easy distribution back to all the mailers. Trying to do this manually is challenging even with just one or two mailing partners, but try expanding that number to 10, 20, or more. Rapid growth can easily occur with an affiliate marketing program, and it requires an automated solution. Having a suppression list management platform in place streamlines this process, and also adds a layer of monitoring so you can ensure that mailers are not only accessing updated suppression files, but also that they are effectively scrubbing those records from their mailing lists.
Tom is too humble to say it, but this compliance requirement is best resolved by setting up OPTIZMO to handle this entire shared suppression process.
It is entirely feasible to run a large email marketing program, with multiple affiliate partners, while maintaining compliance with laws like CAN-SPAM. However, it really necessitates using a suppression list management platform to ensure everything is run effectively.
Tom reached out to Gordon Riegel, Director of Client Engagement at Diablo Media to learn what they expect from the advertisers they promote on a performance basis.
What key metrics and benchmarks do you use to evaluate a new test campaign for an advertiser?
At the onset, eCPM [Earnings per 1000 impressions] and EPC [Earnings Per Click] are always going to be King. They are the true front-end metrics that will dictate success out of the gate.
That being said, we still see a campaign in the 'testing' phase for the first month or so, and those 2nd and 3rd weeks of testing are really the make-or-break for us.
Key metrics and benchmarks are a clients' ability to gauge the granular performance of the traffic (as granular as they can get - ideally on the per-lead level) for us to optimize spends as well as their ability to provide new content and creatives. For many partners, Email being the best example, performance can fall flat within the first few weeks if a mailer is expected to drop the same creative every day.
What’s one tip would you give to an advertiser looking to add email to their affiliate program?
The biggest piece will always be understanding the nuances of who is responsible for what in terms of CAN-SPAM. It's very different from 1st party to 3rd party email and what you have to provide an emailer to ensure they are staying above board with all-things compliance.
What is the biggest key to success in an acquisition-focused email campaign?
The biggest key to success in an acquisition-focused email campaign is knowing your audience and what they want to hear. Some emailers may come equipped with a broad target audience and a team equipped to help build content, but those are both very rare.
The better you know who wants to buy your product (think: age, location, gender, financial status, etc.) and what they like to hear when it comes to the content and creatives for your product, the better results you will get off the bat.
Not all emailers will stick around for another test and rarely do they like to be treated as a testing ground for new ideas. All that being said, the more info you can provide, the more bang-for-your-buck the campaign will be for all parties involved.
With all partnerships, you’re always better proving success with your own traffic and efforts first. Once you’ve proven email as an effective channel, it’s time to start expanding outward.
Just keep in mind, when it comes to working with external emailers - relationships matter. At the end of the day, emailers want to make money from what they’re doing with as little stress and pain as possible. The better the working experience you provide them with, the more they will want to promote your campaigns, even if they make slightly more through other advertisers.
If you’re looking for help with driving performance through email, definitely consider our generous email experts: LiftLogic as a pay-for-performance agency, and Diablo Media as the gateway to reaching the right email affiliates.
It felt a little old-school when you started leveraging email - but then it started to deliver!
Some of the greatest marketing minds have been in your seat, considering how they should leverage email for their businesses. Doing it right could create the growth formula for your business, where you alchemize each dollar spent into 38 dollars earned. The sooner you start testing, the faster you discover what works specifically for you, and build that predictable revenue generating system.
Unlike some other marketing channels, Email requires smart preparation:
Follow the advice of Tom and our contributors wisely to forge yourself into email mastery. Alternatively, you can follow my path of uselessness and bypass the entire learning process by partnering with the right partner or agency to do all of your work for you. Either way, you’ll need to start by building the right foundation to make email your shining star channel.
About the authors:
Tom Wozniak at OPTIZMO
Tom Wozniak heads up marketing and PR for OPTIZMO, delivering the industry’s most robust platform for email compliance and suppression list management to clients throughout the US and around the world. Visit OPTIZMO.com to learn more.
Tom brings more than 20 years of experience in email, affiliate, display, video and numerous other digital marketing channels. Tom also has a degree from Bartending College. The diploma is proudly displayed on a shelf in his office. Like many advanced degrees, this one was never put to professional use - but Tom can sure make a mean Moscow Mule.
Michael Cole at Everflow
Michael is the VP of Marketing at Everflow where he leads marketing initiatives and begrudgingly creates content. He is known for his love of corgis, despite not owning one, nor having a clear actionable plan towards obtaining one in the future.
Everflow empowers you to amplify your Performance Marketing through tracking performance, managing performance driving partnerships, and going deep with clear analytics. When you’re ready for getting more out of your partnerships, submit a demo request!