4 Steps to Understanding the ROI of Your Newsletter
Many businesses spend hours upon hours of blood, sweat and tears on their newsletters (I speak from first-hand bloodletting, sweating, crybaby experience). But what many businesses may not be doing on a regular basis is tracking and measuring their newsletter efforts, to ensure they get the most out of what they put into it. A newsletter should have a clearly defined purpose, goals and metrics, to ensure that all those efforts work for your business, not against it. If you’re looking for some insight into how to get a handle on your newsletter ROI and its metrics, read on, because that’s what we’re here to talk about today.
Bruce Clay, Inc.’s little SEO Newsletter has been in the works since 2004 – that’s 96 volumes since it’s inception. Seven years of data gives us plenty to work with. And because we’re currently in an assessment phase, looking at some of the SEO Newsletter’s components and method of delivery, I had to quickly dive into some data. The good news is: my research is now yours – and guess what? Getting a handle on your newsletter’s performance is not as intimidating as it may seem at first.
Here at BCI, we use Constant Contact for our newsletter, as do many businesses. No matter which service you use, if you haven’t taken the time to poke around in all the stats available to you as a client, this is a must-do first step. It’s chock-full of goodies for you to understand the newsletter’s performance, and to create a baseline to test your email marketing efforts to your heart’s content.
Step 1: Understand Basic Metrics of Email Marketing
Let’s start with a couple quick definitions by Constant Contact on some standard metrics, in case you’re not familiar (note: not all email marketing services have the exact same definitions):
- Email Opens: Indicates how many individuals who were sent the email have opened it.
- Email Open Rate: Percentage of recipients who opened your email compared to how many were sent.
- Click-Through: When a URL link has been clicked to view the webpage it directs to.
- Click-Through Rate: Percentage of click-throughs for a particular email based on the number of contacts who actually opened the email.
- Bounce: An email that is returned to the service provider and cannot be delivered to the specified recipient.
There are many different types of bounces, as indicated below (click on image to be taken to the Web page):
Step 2: Define a Baseline with Best Practices & Historical Data
In the seven years since the first SEO Newsletter was published, we’ve seen our open rates range anywhere from 19 percent to 43 percent, and click-through rates from 15 percent to 35 percent. To start my research for a baseline on our newsletter, I wanted to do a little digging on average open and click-through rates.
What I found was two very helpful resources. The first was from Constant Contact itself, which breaks down common open and click-through rates by industry. This data was based on more than 200 million emails from the Constant Contact database. (Click on the image to be taken to the Web page for the full table.)
And even though that’s pretty thorough, I wanted to branch outside of Constant Contact to get a feel of what other data existed that could assist in forming a baseline. So the second resource I drew from is an interactive email marketing metrics report by MailerMailer from July 2011. This report shows data collected over the course of four years, and includes 977 million email messages from 87,000 newsletter campaigns from the company’s client base.
In the interactive survey data, you can break down the open rates by industry and size of mailing list by selecting certain buttons. For click-through rates, the MailerMailer survey provides the same level of data mining as the open rates by industry and mailing list size, and also gives stats on number of links within an email and its effect on click-throughs.
An interesting bit of data stood out to me (since we have lots of links in our newsletter): the more links within an email, the higher the click rate because it presents more options for the different types of readers, which increases clicks (select image to be taken to Web page):
No matter which metric you’re tracking, if you’re in a specialized industry, you may have to take an average of several industries to form a general baseline. For example, if you’re in the online marketing space like us, you may want to take an average of the data for both the technology and marketing industries in the Constant Contact table, and the computer and marketing industries in the MailerMailer survey.
Other Metrics to Look At
Aside from the basic metrics we’ve just covered, you may also want to take additional historical data from your reports as a baseline, so that you can perform tests and get a feel of the effectiveness of your newsletter. Some of the things you may want to look at include:
- Time of the month sent.
- Time of the day sent.
- Most clicked links within the newsletter.
If you haven’t had a consistent time/day format to this point, start now for a specified period of time to create a baseline that you can begin to test. And If you have a standard newsletter format that always has the same types of links, experiment with those based on the data you’ve drudged up in your reports on most-clicked/least-clicked.
By now, you should have a pretty good baseline for comparing your ROI.
Step 3: Assess Current Return on Investment
Metrics like open, click-through and bounce rates are just one part of the equation in newsletter ROI tracking. The other part is looking at how much time and money is going into your newsletter. As a business, assess:
- How many people collectively work on the newsletter or touch it in some way?
- How many hours do each of those people spend on it?
- What components take the most time?
- Of those people who work on it, what is their time in dollars?
- What is the purpose of the newsletter?
- Do you have conversion goals set up for the newsletter?
- Do you have conversions?
- What is the cost per conversion – the total cost of putting the newsletter together divided by the number of conversions? And for your type of business, is that cost worth too much?
If your answer to these questions is, “I don’t know,” brainstorm the answers so you can begin to get a better picture of what the newsletter’s value is currently, and its potential.
Don’t have goals yet? Not sure what a conversion is for your newsletter?
While some of the goals for your newsletter may have to do with improving the metrics we spoke about in the previous sections, you’ll also want to think about tracking goals that translate to revenue – even if the newsletter is more focused on education and information.
And some things are easier to track than others. It’s not always easy to figure out just how much the newsletter contributed to a conversion, however, for every intangible, you can probably come up with a metric to track it and even assign an attribution value to it.
One example is, if the intangibles of our SEO Newsletter are brand awareness and education; the tangible metrics, for example, could include tracking the shared newsletter content online and SEO training signups that occur from the publication.
Step 4: Repair Issues, Test New Ideas, Track Again
The great thing about email marketing is that you’re in control, and you have the data to back up the results of your experiments. Most email marketing providers like Constant Contact have endless tutorials and suggestions on how to improve your email marketing efforts, plus lots of the issues you might be facing are an easy fix.
For example, fixing bounce rates is as simple as finding which emails bounced for what reasons, and removing them from the list or addressing the issue. If your content is not being shared as much as you’d like it to, enable social sharing functionality in Constant Contact, or the equivalent in another provider. Or consider pushing it through your Facebook and Twitter accounts more.
And instead of constantly relying on the numbers game to make decisions about your newsletter, how about asking the reader? What do they want from your newsletter? What do they find valuable and what could they live without? Do they like the method of delivery and when it’s delivered? All these questions can be answered through simple surveys you can create right in the newsletter (in fact, Constant Contact lets you try surveys for free for a period of time; that ought to get you started).
Keep your newsletter relevant and valuable to your business and its audience. Follow these simple first steps and you are well on your way to a creating a sound strategy for your email marketing.
How are you tracking and improving your newsletter? If you have tips, we’d love to hear from you in the comments section below!