David Baker, of Avenue A/Razorfish, did his usual smash-up job at the Email Insider Summit. Along with his co-presenter, Gareth Morgan from Intercontinental Hotel Group, David raised the question of incremental value. To put it another way, if you do X, Y or Z to your existing campaign approach, what is the incremental value?
It seems like a simple question at first, but it really got me thinking.
Incremental value is a very simple yardstick you can use to determine which projects to undertake and which are not worthwhile. Presumably, the simplest metric for incremental value would be conversion revenue, but that doesn't apply to every email marketer. Open or click rates would work well in most situations if you don't have another key performance indicator already in place.
If each of the possible initiatives raises conversions by some amount, then you simply rank them by the incremental revenue relative to their cost. It's business 101. What I liked about the presentation is the way he applied this simple yardstick to some of our cherished notions of "better email."
- If you use an assured delivery service, do the increased conversions pay for the cost of the "stamps" or the annual license you purchased? As obvious as this question is, I'm surprised how rarely it's brought up.
- If you add RSS (my favorite Email 2.0 topic) to your outbound mix, will the increased audience and number of opt-ins pay for the incremental cost of the service?
- If you use behavior-based targeting, will the increased response add enough value to cover the costs and hours of using this advanced approach? Again, this seems to be an obvious yardstick. Most of the data suggests this technique offers tremendous incremental value, yet most marketers still don't apply it. (Note that 75 percent of the audience raised its hand when asked if it was using behavior-based targeting.)
The point here is that most marketers do a lot of hand-wringing when it comes to these questions, yet they don't need to. All that is required is some testing. Maybe if marketers apply honest, data-driven measurements of incremental value to improve their campaigns, they can use that hand-wringing energy to more productively deliver some incremental value to their companies.