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Minimal Effort, Maximum ROI: Where You Should Spend Your Marketing Time

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by: Richard Austin (@biggestof)
20 December 2012

It’s the eternal question for digital marketers: What's the best tactic to boost my revenue?

For many, it seems simple — grow the size of your database and see a corresponding rise in revenue. Whilst an increase in subscribers will undoubtedly improve revenue, we all know that only growing your database can lead to a declining scale of effectiveness over time as open rates drop and the number of inactives grow.

So what are the alternatives?

This article will look at some of the key metrics on every marketer’s list — database growth, deliverability, open rate (OR), click-through rate (CTR) and conversion rate (CVR) — and show you where your time and budget should be spent.

Looking at the Bottom Line
So, let’s start by taking a look at a fairly standard situation and seeing what effect each “tactic” has on the bottom line. This does involve performing some calculations, but you can use this Email ROI Tactics Calculator I created to easily see the impact of these and other changes.

We’ll start from this baseline: 

  • A retailer makes $38,880 per month in sales from email
  • It sends to a database of 600,000, twice a month
  • Deliverability is 90% and based on the delivered email volume
  • It has a unique OR of 15%, CTR of 3% and conversion rate of 2%.

So, what happens to the bottom line if the deliverability rate climbs to 96 percent? This would see the email reaching an extra 72,000 contacts, and with all the other metrics remaining the same, it would boost that month’s revenue to $41,472, an increase of $2,592.

Not bad, but if (based on our original data) we increased that database by a massive 15 percent in a month, what impact would that have? That would mean an extra 90,000 contacts on the database and a monthly sales figure of $44,712 (remember, deliverability is unchanged at 90 percent), translating to an impressive increase of $5,832 on the original figure.

Now let’s look towards the end of the chain and see what effect improving the CTR by 2 percent has on the bottom line. Remember that nothing else has changed; the OR is still 15 perecent and the conversion rate 2 percent.

This one change moves the revenue up from $38,880 to a massive $64,800. That’s an increase of 166 percent! Similarly, increasing the conversion rate by just 1 percent results in a similar increase as revenue reaches $58,320.

Whilst this might seem counterintuitive, the ROI Calculator and experience bears this out; optimising the point of conversion yields the best results. Check out the calculator and see for yourself.

Optimising Your Conversion Point
For email, the point of conversion is the call-to-action (CTA), as this drives the CTR and directs customers to your landing page/website where the final conversion takes place. Therefore, it’s wise to optimise your conversion point before moving more people down the sales funnel toward it.

In other words, your email creative needs to be optimised first to boost ROI.

Your creative should help customers identify the content that’s meaningful to them and influence their decision to take action, i.e. click your main CTA.

So now I’m sure some of you are thinking expensive redesigns, commissioning an agency, endless rounds of revision ... right? Let me show you how some simple changes can have a huge impact on performance.

The following tests were performed by our multivariate testing partner 8Seconds and were performed on live sends. In the first, a test showed that the button style "A" tallied 23 percent more clicks over style "B." That’s a huge result and even more impressive when the only change was the addition of a chevron (>)!


A slightly larger difference in approach was tested in the following example, with option “B” notching 72 percent more clicks than option “A”:

In fact, whilst retaining the same basic template, I’ve seen the CTR triple after improving the call-to-action creative.

Getting the Most ROI for Your Effort
So for a small outlay in terms of your (or your team’s) time, you can make significant improvements to your email programme’s revenue. In fact, the areas that will benefit you most relative to the net gain are often those that require the least investment, such as:

  1. Click-Through Rate
  2. Open Rate
  3. Database Growth
  4. Deliverability

Therefore, make 2013 the year when you improve your email’s ability to help customers identify the content that’s meaningful to them and influence their decision to take action. Then, watch the difference this makes to the revenue that email generates.

To help you, we’re offering links to our comprehensive “Almost Everything You Wanted to Know About Email Marketing” ebook and our Email ROI Tactics Calculator.

In the meantime, enjoy the holiday season and have a prosperous New Year!




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