Jennings: How Much Email Marketing Do You Really Need?

1 2018 10 less is moreThere’s the textbook ‘right’ way to structure an email marketing program, but you can often meet your initial business goals with much less: fewer email messages, reduced cost and not as much lead time. Here’s a case study in how to build your email marketing program in an agile fashion, prioritizing based on business goals and ROI.

A few months ago, a start-up reached out to me for some email marketing help. They declined my offer of a phone call to discuss their needs; instead they sent me the following scope of work.

We would like a SOW with the pricing structure and timing ASAP.  Here's an outline of what we need:

  • Content creation: This is where we need the most help, coming up with the content, subject lines, messaging, calls to action.
  • Cadence: Building out and testing a contact cadence; we need the following:
    • A welcome cadence to new signups. This needs to introduce the new signup to the brand, the product, and eventually encourage them to pre-order.
    • Ongoing pre-order campaign with existing sign-ups of which there are about 30,000. 
    • Tell your friend campaign, to encourage current customers and/or subscribers to tell their friends about it, and perhaps provide an email they can forward to their friends
    • Regular newsletter (perhaps monthly) informing subscribers of the company's progress, product development, and other interesting content. Build engagement and buzz.
  • Perform and measure A/B testing on different versions/subject lines/messaging/calls to action
  • Perform offer testing and potential “subscriber” discounts
  • Tie into existing and/or help create, landing pages and social media marketing
  • Measure performance and effectiveness overall with email marketing

We are not marketers and we are open to ideas, suggestions, and all the help we can get (provided it's within the limited budget).  We have a sense of urgency around coming up with effective methods to drive pre-orders.  The key objective is to increase pre-orders and we are working on a timeline for both investors and the manufacturer.

At a high level, this is a basic textbook version of what you would want in an email marketing program. It’s not a bad scope of work. But there were three things that struck me in the last paragraph, which made me think that this scope may not actually be what they need right now:

  • Limited budget
  • Key objective is to increase pre-orders
  • Urgency for investors and the manufacturer

jenningsgraphicIn a single sentence, that last paragraph told me: “We need to drive revenue via pre-orders as soon as possible within our limited budget.”

The scope of work they provided was much larger than this.

I often speak to small and even mid-sized organizations that have “champagne wishes and caviar dreams” for their email marketing program that they want to execute on a “cheeseburger budget.” Email marketing has a reputation for being cost-effective – and it is. But you still need to invest upfront to get quality work that will provide ROI when it’s launched.

2 2018 10 project triangle from adobe stock 500 wideYou’ve probably seen the project management triangle, pictured at the left. When time, cost and scope are balanced, you get a perfect equilateral triangle and high-quality results.

But if one or more of the elements is out of balance with the rest, the quality of the result is jeopardized.

In this case, it seemed to me like the original request for proposal was creating a very non-equilateral project management triangle, one with very short time and cost sides, and a very long scope side. It would be hard to do everything they believed they ‘needed’ in the scope, within the time and budget limitations they had. And if you did do it, the quality would likely not be there, which negates the value of doing anything.

Sure enough, the initial proposal was rejected as being too expensive and taking too much time to development; but they did agree to hear my ideas for meeting their goals in a more time- and cost-effective matter.

On the call to discuss, I got a little more information:

  • The team knew their product features but didn’t seem to have done much work around the benefits and advantages (over competitive products) that those features provided. There was also work that needed to be done on content, including key selling propositions and overcoming obstacles and objections – we needed more than a feature list and “pre-order now” call-to-action to be successful.
  • There was a real urgency to driving pre-orders – they needed to generate the revenue before they could manufacture the product to fill the orders.
  • Management had rejected a plan to spend $7,500 on a print direct mail campaign to 15,000 email subscribers. The cost included a postal address append (they assumed this append would yield postal addresses for about half their email list) as well as creative and postage. They had estimated a 1.0% response rate, with a cost of $47.15 per pre-order.
  • While they didn’t want to disclose their budget, when we started tossing out numbers they seemed to suggest that they had $5,000 to $10,000 to spend on email marketing strategy and creative initially, and more if the results of that first spend were successful.

3 2018 10 revenueThe challenge: narrow the scope so that it was more in line with the time and budget available, while still meeting the objective of quickly generating revenue via pre-orders.

If you’re facing a similar situation, it’s important to first focus on the bottom-line goal; in this case, that is driving pre-orders. Only one item from the original scope of work was laser-focused on driving pre-orders: the ongoing pre-order campaign. This became the focal point of the revised scope; the write-up from the second proposal is below.

A. Pre-Order Email Campaign (secondary goal: word-of-mouth marketing)

a. Develop a campaign plan including

i. Features, benefits and advantages, as well as key selling propositions and how to overcome common obstacles/objections to the purchase

ii. message map, frequency, cadence, creative brief

iii. a strategic resend plan as well as forward-to-a-friend messaging to increase reach

b. Creative execution

i. Creative direction and management

ii. Copywriting for 4 email messages

iii. Design and coding for 1 email template

iv. Client to duplicate template and update copy to get to 4 efforts

v. Includes ‘2-rounds-to-final’ on creative

c. Track and report on results

i. Raw data on business (pre-orders) and diagnostic (opens, clicks, etc.) metrics to be provided by client

ii. Analysis and learnings to be presented to client roughly a week after each send

d. Timeframe: estimated 30 to 45 days from kick-off meeting to first send

The cost of this campaign was roughly $5,000, matching the low-end of what they seemed to be able to spend.

You’ll note that, in addition to limiting the scope, we did a few other things to help keep costs low and maximize ROI:

  • Making this campaign dual-purpose by including a secondary call-to-action asking recipients to forward the email to a friend (world-of-mouth marketing)
  • Including a strategic resend plan, to send each message more than once to key audiences, which increases reach and drives additional sales.
  • Creating only one template for all 4 of these messages
  • Having the client, rather than our coder, duplicate the first message created by our team and then update the copy for the three additional messages (easy to do with the WYSIWYG interface provided by their ESP)
  • Presenting learnings, based on analysis of both business (pre-orders) and diagnostic (opens, clicks, etc.) metrics to help us tweak efforts going forward to boost response

4 2018 10 goalsAssuming a 1.0% response rate (taken from the direct mail estimate above) from the current list of 30,000, this campaign would generate 300 pre-orders at just under $17 each (which is very reasonable considering the cost of the product). This represents a much better value than the proposed direct mail campaign which was estimating a cost of over $47 per pre-order.

If the response rate was higher, which it should be thanks to the multiple email messages, the strategic resends and the word-of-mouth marketing, the cost per pre-order would be even lower. And as new people joined the list they could be sent this campaign, so it would be an ongoing source of revenue with little additional investment. And as each additional pre-order over the initial 300 was recognized, the cost per pre-order would decrease.

Would it be nice to have all the other items in the original scope of work? Yes. But could they accomplish their goals, now and into the future, with just this one campaign – and stay within their budget? Yes. This focused approach will lead more quickly to a positive ROI, throwing off money that can be used for future marketing programs.

One key element missing from this focused campaign was a formal A/B split testing plan to optimize results on an ongoing basis. We added a second item to the revised proposal to cover this:

B. Ongoing Email Optimization

a. Develop a performance testing plan

i. 6 tests total; 2 per month

ii. Testing may involve subject lines, preview pane text, body copy, messaging, calls to action, offers, discounts, design, layout, strategic resends, additional email efforts to expand the pre-order campaign, new email efforts or campaigns, landing pages, etc.

b. Creative execution

i. Creative direction and management

ii. Creative needed will vary based on which tests are outlined in the plan (which will be determined by the results of sends in the pre-order campaign)

iii. Copywriting for email messages as needed (up to a maximum of 6 per quarter)

iv. Design and coding for email template as needed (up to a maximum of 1 per quarter)

v. Exact services to be covered under this budget are dependent on which tests are recommended (for instance, development of a landing page to test would be the equivalent of copy, design and coding for a new email template)

vi. Client to duplicate template(s) and update copy as needed

vii. Includes ‘2-rounds-to-final’ on creative

c. Track and report on results

i. Raw data on business (pre-orders) and diagnostic (opens, clicks, etc.) metrics to be provided by client

ii. Analysis and learnings to be presented to client roughly a week after each test

d. Timeframe: estimated 15 to 30 days from quarterly kick-off meeting to first test send

e. Client may renew this testing program up to 3 times, for a total of 12 months of ongoing email optimization at the same quarterly cost.

5 2018 10 performanceThe cost is a bit more than the initial program (just over $8,000 a quarter), but once the initial campaign is up and running a few months and driving revenue, it’s an investment that will pay off. If we do 6 tests a quarter with half of them (3) showing a lift of 25%, we will almost double the response rate each quarter (compound growth). That’s not unusual, if we analyze what’s going on and test optimizing according to the learnings.

And what about the other items from the original scope?

This email optimization program is more likely to drive additional revenue than a welcome series or a monthly newsletter. While it would be nice to build those out in the future, if quick revenue is the goal than these two are lower on the priority list. And if we decide we need them to grow revenue, we can use some of our testing resources to begin building them.

Moral of the story: if you have a limited budget, focus your attention on your key objective rather than building out a full textbook email marketing program. Do try this with your email marketing efforts and let me know how it goes!

 

Comments 1

Katey Charles Darpel on Thursday, 18 October 2018 11:37

Great article, Jeanne! Such wise advice for helping start-ups stay laser-focused to accomplish what they need NOW and table the rest until they have been in business awhile and can afford to expand their email marketing program.

Great article, Jeanne! Such wise advice for helping start-ups stay laser-focused to accomplish what they need NOW and table the rest until they have been in business awhile and can afford to expand their email marketing program.
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Tuesday, 11 December 2018
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