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In this issue of the newsletter, we will look at aggregated results of 89 different email campaigns from the Holiday 2006 season. We hope this snapshot helps you analyze your own performance in the context of the overall results of the food-by-mail industry, leading to a more profitable 2007 for your email marketing programs.
Summary Results
Ranges
These 89 campaigns covered a wide range of situations such as:
- Clients who mail regularly throughout the year
- Clients who only mail in the holidays
- Clients who mail with high frequency (7+ emails in November/December)
- Clients who mailed only once or twice in the season
- Offers included:
- Discounts off all orders (usually 10%)
- Specific product specials (discounts up to 25% or more)
- Free Shipping on all orders
- Free Shipping on specific items
- % off shipping
- Free gift with purchase
- Relevant products (e.g. Chocolate Thanksgiving Turkey, Halloween Candy)
- Clients that track by segment: such as recency, products purchased, etc
Given this, all metrics showed a wide range of results, but most had an obvious cluster around the average result.
Delivery rate: 77% to 98%
Lower rates were often the first time a list was mailed in some considerable time – so the list had a higher number of bad addresses and bounces. Lists mailed regularly and kept clean were in the high 90% range.
Open rates: 4% to 77%
Majority of open rates were between 15% and 40%. The extremely high ones were when tight segments were mailed – e.g., lists with specific product history being sent a similar product offer. Very low ones were for non-offer emails, or for tightly spaced re-mails. Where we were measuring by recency, we found recent buyers open around 2 times more often than lapsed buyers.
Click/open ratio (click-through rates): 8% to 41%
Majority were between 10% and 35%. This ratio is very dependent on strength of offer, frequency and timing. Strong offers, emails sent after a gap and emails sent close to key events (Thanksgiving, Holiday cut-offs) have the highest click-through rates.
Click/sent ratio: 0.5% to 25%
Majority were between 1% and 6%. This is the metric most often quoted in industry studies as it avoids the controversy of the reliability of open rates. It is highly sensitive to the same variables as Click/open ratios.
Conversion rates (orders/clicks): 0.61% to 74%
Majority were between 2% and 24%. Extreme ends of the range come from either emails with no offer (for lower end) to tightly segmented emails sent to very small segments.
Response rates (orders/emails sent): 0.02% to 3.26%
Difficult to benchmark effectively as range is very wide. Again, this ratio is very dependent on offer, timing, segmentation, etc.
$$ sales per email (revenue/emails sent): $0.02 - $5.15
This is very useful for determining success of the campaign. Break-even is usually around $0.07 to $0.10 (it will vary with margin, depth of promotion, etc.)
$$ sales per visit (revenue/clicks): $0.77 - $78.75
Included here as often quoted in industry studies.
So what did we learn, and how do we use it to sell more food?
If the goal of a given email blast is to drive sales (as opposed to creating awareness or branding), use a promotional offer. In head-to-head tests, emails with offers consistently drove more sales. Just like with your postal names, segment your email list. Start by separating buyers vs. non-buying opt-ins. For the buyers, further segment by date of last purchase, frequency of purchases, products purchased, etc. Once you have your list segmented, code and track orders and sales by segment. Read your segment-level results, and adjust your email plan based on your numbers. Increase contact frequency to the best responding names, and reduce contacts to marginal and poor performing segments. Run A/B subject line tests the day before a blast, and use the winning subject line on the rollout of the campaign. Look at both click-through and open rates. Don’t assume that an email will only "pull" for a few days. Some emails have long "tails." Track it so you know how long your email order curves are; make sure the email can still be clicked through for the duration of the curve. This is particularly important for newsletter style emails, or recipe emails with useful content, and not just a "hot" offer. Add highly targeted emails to your schedule. For example, send a specific product offer to buyers of that product or product category. These mailings will typically have higher open rates, click-through rates and conversion rates than less targeted emails. Add triggered emails to your contact plan. These include welcoming a new customer to the company or sending a “miss you” message with a reactivation offer to buyers after X months since their last purchase. Include the company name in the subject line to help improve the open rates. Personalize the email blast when possible to improve response. However, if you’re not 100% sure you’re doing it right (i.e., garbage in your customer file), do not do it. If you mess up the personalization, it will deter sales and confidence in your company. Nobody likes to see an email that says “Dear Null.” Be sure to include an online version of your email blast to guarantee your email can be seen intact. Some email providers block images. Email only when you have something that is relevant to the customer. If it’s relevant, the customer won’t mind how often you email. Be sure to use email to say “Thank You.” Have a customer appreciation sale. If customers feel appreciated, they are more likely to be loyal to your company time and again.
We hope these benchmark statistics from other specialty food emailers and our recommendations will lead you to a more profitable email program for your business.
In the next issue of the FBMIU, we will be sharing some of the insights we learned from our January survey of holiday 2006 online buyers of specialty food. We received over 10,000 responses to the survey—consumers telling us what they like and don’t like in the specially food sites they shop from; some of what we learned may surprise you. Stay tuned
My best,
Tony Cox
President
The 5th Food Group and Catalog Solutions, LLC
ABOUT 5TH FOOD GROUP & CATALOG SOLUTIONS
5th Food Group helps specialty food catalogers and internet marketers grow and make more money by developing, managing and implementing their mail order and online marketing programs. We are the only catalog/internet marketing firm that works exclusively in the specialty food industry. Helping smaller companies or large companies with small mail order or Internet divisions is what we do best.
Visit us online at www.5thFoodGroup.com to download a copy of our free booklet, The Seven Habits of Highly Ineffective Catalogers, and for information on our fully guaranteed introductory program called Jump Start.
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