1 Plan to Engage Webinar | March 11, 2014 Email Profits Down? How to Analyze Why and Fix The Problem March 2014 Jeanne S. Jennings Vice President, Global Strategic Services
Jul 15, 2015
1Plan to Engage Webinar | March 11, 2014
Email Profits Down?How to Analyze Why and
Fix The ProblemMarch 2014
Jeanne S. JenningsVice President, Global Strategic Services
2Plan to Engage Webinar | March 11, 2014
What is a Revenue Tree?
A. A visual way to delve into your email marketing program and see areas of year-over-year change
B. A good way to present data to those who aren’t spreadsheet geeks
C. The topic of today’s Webinar
D. All of the above
5Plan to Engage Webinar | March 11, 2014
For the Sake of Our Webinar
• Single company or business unit sending…• 1 Stand-alone Promotional Email a Month
• 1 Email Newsletter with a mix of Editorial and Promotional Email a Month
• A Welcome Message to New Subscribers with promotional content
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First… Isolate Email Efforts
This will help you focus
your analysis – and not
spend time where there
aren’t issues.
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Stand-alone Promotional EmailEmail Profits Down?How to Analyze Why and Fix The Problem
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Stand-alone Promotional Email
It’s the number of orders,
not the average order
value, that is to blame for
the decrease
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Stand-alone Promotional Email
The clicks are converting
at the same rate… but the
conversion rate from
quantity sent is way down
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Stand-alone Promotional Email
The click-through rate is
down – but the open rate
isn’t.
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Next Steps…
The problem lies with the body of the email –people are opening but they aren’t clicking like they did last year
• Continue the Revenue Tree analysis looking at the links in the email
• Look at individual links – compare YOY by placement and call-to-action language
• Also look at the copy around the call-to-action links; what was there last year that’s not here this year
• Test incorporating your learnings on the links into a test for your next send
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How Are We Doing?
Pretty well. We’ve pinpointed the primary cause of the first month’s revenue variance; we know what to focus on to try to correct the problem.
Year 1 Year 2 Dollars Percentage Dollars
% of
Variance
Month 1 1,034,960$ 711,411$ (323,549)$ -31% (383,549)$ 119%
Month 2 1,066,792$ 837,578$ (229,214)$ -21%
Month 3 1,118,050$ 866,120$ (251,930)$ -23%
YOY Revenue VarianceRevenue
Month
Stand-alone
Decreased Click-
through Rate
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Email NewsletterEmail Profits Down?How to Analyze Why and Fix The Problem
19Plan to Engage Webinar | March 11, 2014
Email Newsletter
Once again, It’s the number
of orders, not the average
order value, that is to blame
for the decrease
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Email Newsletter
The conversion rate from clicks was
down both months… but was it down
for the same reason both months…
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Email Newsletter
The click-through rate on
promotional links was down
dramatically in Month 3… time to
dive into a deeper link analysis. But
what about Month 2?
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Email Newsletter
In Month 2 the problem didn’t lie with
the email – it was the landing page
that caused a drop in conversions
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Next Steps…1. One problem lies with the promotional links in the body of the email – people are opening and clicking on editorial links but they aren’t clicking on the promotional links like they did last year (Month 3)
• Continue the Revenue Tree analysis looking at the promotional links in the email
• Look at individual promotional links – compare YOY by placement and call-to-action language
• Also look at the copy around the promotional call-to-action links; what’s different from last year
• Test incorporating your learnings on the promotional links into a test for your next send
26Plan to Engage Webinar | March 11, 2014
Next Steps…
2. There’s also an issue with the landing page –people are clicking through but they aren’t converting like last year (Month 2)
• Continue the Revenue Tree analysis looking at how visitors are engaging with your landing page
• Where are they going instead of converting? Can you close these exits?
• Are there elements of that landing page that make visitors more likely to convert? If so, make these more prominent
• Test incorporating your learnings in the landing page for your next send
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How Are We Doing?
Pretty well. We’ve pinpointed the primary cause of 86% or more of the variances in all three months; we know what to focus on to try to correct the issues. But it still makes sense to look at the welcome message.
Year 1 Year 2 Dollars Percentage Dollars
% of
Variance Dollars
% of
Variance Dollars
% of
Variance
Month 1 1,034,960$ 711,411$ (323,549)$ -31% (383,549)$ 119%
Month 2 1,066,792$ 837,578$ (229,214)$ -21% (219,830.85) 96%
Month 3 1,118,050$ 866,120$ (251,930)$ -23% (216,538)$ 86%
YOY Revenue VarianceRevenue
Month
Stand-alone
Decreased Click-
through Rate
Newsletter
Decreased Landing
Page Conversion
Decreased Promo
Click-through Rate
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Welcome MessageEmail Profits Down?How to Analyze Why and Fix The Problem
30Plan to Engage Webinar | March 11, 2014
Welcome Message
Both the number of orders and
the average order value
decreased in Month 3; so we
know we have to look into AOV…
but what else?
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Welcome Message
Neither of the conversion rates
are down, in fact they’re up from
last year…what else should we
look at?
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It’s the send quantity – that’s what
decreased and caused revenue to
drop
Welcome Message
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Next Steps…
1. One issue is that the average order value has dropped significantly• Take a look at the promotional offer in your welcome
message – was it for a lower cost produce in Month 3?
• Or were people less likely to add additional items to their cart?
• Test different products – incorporate popular products which are near (not far below) the average order that a new subscriber is willing to purchase
• Test incorporating your learnings in your future welcome messages
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Next Steps…2. There’s also an issue with your acquisition process –your list isn’t growing as quickly as it was last year. While this is a small revenue problem now, it will turn into a larger one as fewer new people are added to your list
• Time to analyze and optimize your sign-up process• Look at your online sign-up form – are fewer people starting
the process or is it that fewer people are finishing it once they start?
• If fewer people are starting it, you need to look at your calls-to-action and other sources driving traffic there
• If more people are abandoning before they complete the process, you need to do an analysis of the flow the look to close the exits
• Test incorporating your learnings on your acquisition process
37Plan to Engage Webinar | March 11, 2014
How Are We Doing?
Very well. We’ve identified what’s causing more than 96% of the variance each month. Now we just have to make qualitative adjustments to correct it.
Year 1 Year 2 Dollars Percentage Dollars
% of
Variance Dollars
% of
Variance Dollars
% of
Variance Dollars
% of
Variance Dollars
% of
Variance
1,034,960$ 711,411$ (323,549)$ -31% (383,549)$ 119%
1,066,792$ 837,578$ (229,214)$ -21% (219,830.85) 96%
1,118,050$ 866,120$ (251,930)$ -23% (216,538)$ 86% (14,949)$ 6% (30,526)$ 12%
YOY Revenue VarianceRevenue
Stand-alone
Decreased Click-
through Rate
Newsletter
Decreased Landing
Page Conversion
Decreased Promo
Click-through Rate
Decreased Average
Order Value
Welcome Message
Decreased Send
Quantity
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Now the DataEmail Profits Down?How to Analyze Why and Fix The Problem
39Plan to Engage Webinar | March 11, 2014
Where You Usually Start
Total
Quantity
Sent Orders Revenue
Average
Order
Revenue
Variance ($)
Revenue
Variance (%)
Month 1 5,550,185 7,451 1,034,960$ 139$
Month 2 5,744,580 7,713 1,066,792$ 138$
Month 3 5,925,637 8,272 1,118,050$ 135$
Month 1 6,062,292 5,238 711,411$ 136$ (323,549.00) -31%
Month 2 6,180,595 5,811 837,578$ 144$ (229,214.12) -21%
Month 3 6,138,871 6,246 866,120$ 139$ (251,929.69) -23%
Q1, Year
1
Q1, Year
2
List Size
Beginning List Size End
Average List
Size
List Growth
% List Growth
List Attrition
% List Attrition
Month 1 2,654,321 2,757,840 2,706,080 5.2% 138,024.69 -1.3% (34,506.17)
Month 2 2,757,840 2,851,606 2,804,723 4.9% 135,134.14 -1.5% (41,367.59)
Month 3 2,851,606 2,940,006 2,895,806 4.7% 134,025.48 -1.6% (45,625.70)
Month 1 2,940,006 3,001,746 2,970,876 4.1% 120,540.24 -2.0% (58,800.12)
Month 2 3,001,746 3,061,781 3,031,763 3.9% 117,068.09 -1.9% (57,033.17)
Month 3 3,061,781 3,031,163 3,046,472 1.5% 45,926.71 -2.5% (76,544.52)
Q1, Year
1
Q1, Year
2
40Plan to Engage Webinar | March 11, 2014
Granular DataStand-alone Promotion
Quantity
Sent
Assumed
Delivered
Rate Open Rate
Click-through
Rate
Click-to-
Open Rate
Click-through
Rate on
Promotions
Click-to-
Open Rate on
Promotions
Conversion
Rate from
Clicks
Conversion
Rate from
Sent
Conversion
Rate from
Promotional
Clicks Orders Revenue Avg Order
Month 1 2,657,531 98.9% 20.9% 3.9% 18.7% 3.9% 18.7% 3.84% 0.15% 3.84% 3,936 562,829$ 143$
Month 2 2,761,050 98.6% 21.5% 3.7% 17.2% 3.7% 17.2% 3.99% 0.15% 3.99% 4,019 562,670$ 140$
Month 3 2,854,816 99.1% 21.1% 3.9% 18.5% 3.9% 18.5% 3.92% 0.15% 3.92% 4,325 601,198$ 139$
Month 1 2,943,216 98.9% 21.5% 1.1% 5.1% 1.1% 5.1% 3.87% 0.04% 3.87% 1,239 179,279$ 145$
Month 2 3,004,956 98.5% 20.9% 3.4% 16.3% 3.4% 16.3% 3.91% 0.13% 3.91% 3,935 554,816$ 141$
Month 3 3,064,991 98.8% 20.2% 3.8% 18.8% 3.8% 18.8% 3.82% 0.14% 3.82% 4,396 637,384$ 145$
Newsletter
Q sent
Assumed
Delivered
Rate Open Rate
Click-through
Rate
Click-to-
Open Rate
Click-through
Rate on
Promotions
Click-to-
Open Rate on
Promotions
Overall
Conversion
Rate from
Clicks
Overall
Conversion
Rate from
Sent
Conversion
Rate from
Promotional
Clicks Orders Revenue Avg Order
Month 1 2,754,630 98.7% 24.9% 4.4% 17.7% 2.9% 11.6% 2.6% 0.11% 3.88% 3,059 382,402$ 125$
Month 2 2,848,396 98.5% 27.5% 4.5% 16.4% 2.8% 10.2% 2.6% 0.11% 4.10% 3,221 409,055$ 127$
Month 3 2,936,796 99.3% 26.6% 4.6% 17.3% 3.0% 11.3% 2.6% 0.12% 3.99% 3,491 429,361$ 123$
Month 1 2,998,536 96.2% 27.9% 4.8% 17.2% 3.1% 11.1% 2.6% 0.12% 4.00% 3,577 443,535$ 124$
Month 2 3,058,571 95.9% 26.6% 4.8% 18.0% 2.8% 10.5% 1.1% 0.05% 1.80% 1,478 189,225$ 128$
Month 3 3,027,953 95.6% 25.6% 4.9% 19.1% 1.5% 5.9% 1.2% 0.06% 3.89% 1,689 212,823$ 126$
Welcome Message
Q sent
Assumed
Delivered
Rate Open Rate
Click-through
Rate
Click-to-
Open Rate
Click-through
Rate on
Promotions
Click-to-
Open Rate on
Promotions
Overall
Conversion
Rate from
Clicks
Conversion
Rate from
Sent
Conversion
Rate from
Promotional
Clicks Orders Revenue Avg Order
Month 1 138,025 93.3% 40.1% 4.3% 10.7% 3.1% 7.7% 8.2% 0.33% 11.41% 455 89,730$ 197$
Month 2 135,134 93.6% 42.0% 4.5% 10.7% 3.3% 7.9% 8.3% 0.35% 11.33% 473 95,067$ 201$
Month 3 134,025 93.5% 41.5% 4.6% 11.1% 3.2% 7.7% 7.9% 0.34% 11.36% 456 87,492$ 192$
Month 1 120,540 93.3% 42.3% 4.2% 9.9% 3.4% 8.0% 8.9% 0.35% 11.03% 422 88,597$ 210$
Month 2 117,068 93.6% 41.2% 4.1% 10.0% 3.2% 7.8% 8.9% 0.34% 11.35% 398 93,537$ 235$
Month 3 45,927 93.8% 41.9% 4.0% 9.5% 3.5% 8.4% 9.3% 0.35% 10.66% 161 15,914$ 99$
Parsing the Revenue Lost in Month 3 by the (a) decrease in send quantity and (b) decrease in average order value
A Month 3 134,025 93.8% 41.9% 4.0% 9.5% 3.5% 8.4% 9.3% 0.35% 10.66% 469 46,440$ 99$
B Month 3 45,927 93.8% 41.9% 4.0% 9.5% 3.5% 8.4% 9.3% 0.35% 10.66% 161 30,863$ 192$
Q1, Year
1
Q1, Year
2
Q1, Year
2
Q1, Year
1
Q1, Year
2
Q1, Year
1
41Plan to Engage Webinar | March 11, 2014
Additional ResourcesEmail Profits Down?How to Analyze Why and Fix The Problem
42Plan to Engage Webinar | March 11, 2014
Additional Email Marketing Resources
Look for Jeanne’s column on email marketing every other Monday
www.ClickZ.com
@JeaJen to follow Jeanne
43Plan to Engage Webinar | March 11, 2014
Additional Email Marketing Resources
The Premier Email Marketing Association, Part of the DMA; Dela and Jeanne usually both speak at their annual conference
www.EmailExperience.org
A Private Community for Email Marketers offering Discussion Lists and Meetups; Look for Jeanne’s monthly posts on the blog
www.OnlyInfluencers.com
44Plan to Engage Webinar | March 11, 2014
Email Profits Down?How to Analyze Why and Fix The
Problem
March 2014
Thanks for attending! Questions?
Jeanne S. JenningsVice President, Global Strategic Services202.365.0423 | [email protected]