B2B Email Marketing – Calculating the Cost of Increased E-Mail Frequency
By: B2B Email Marketing
The good news: e-mail has emerged as the marketing channel that generates the highest ROI (define) for most companies.
The bad news: as a result, “send more e-mail” is a frequent mandate from the executive suite to the marketing staff when more short-term revenue’s needed.
Ah, if life were only so simple: revenue on demand from e-mail, just like turning on a garden hose. Increasing frequency does work, of course. Whether you go from 2 to 4 times per month or 6 to 12, you’re likely to see a strong increase in revenue. But you’re also likely to pay a high price for the increased revenue.
Impact of Increased Frequency
Frequency bedevils both postal and e-mail marketers. Overmailing in both channels can potentially fatigue a list so much that recipients stop responding. Yet postal overmailing doesn’t put the delivery channel at risk.
E-mailing too often, on the other hand, can generate so many additional unsubscribes and spam complaints that you end up trading increased short-term revenue for a loss in long-term revenue, as well as increased list shrinkage and potential damage to your brand and e-mail reputation. Any additional revenue, leads, downloads, trials, or other desired actions you generate could easily be gobbled up by the higher costs of replacing lost customers or prospects.
This doesn’t mean you can’t safely step up frequency. In fact, many companies may be undermailing to their current lists. But you first need the right data and strategy to send more relevant, targeted messages at the right frequency for each customer segment.
Case Study: First, the Good and So-So News
A multichannel retailer more than doubled its monthly mailings in an effort to increase revenue. Mailings to its general list went from an average 5 per month (slightly more than once per week) to 12 per month (roughly three times a week).
The increased frequency produced 38 percent more revenue than the five-times-per-month program. OK so far. But calculating the two approaches based on average revenue per e-mail delivered (ARED), the 5-times frequency outpulled 12-times at 18 cents compared to 10 cents per e-mail delivered.
Over a year, if e-mail delivered, clicks, opens, and conversions remain steady, the company would take in an additional $2.2 million by sending more than twice as many e-mail messages. Music to management’s ears! Yet the additional revenue comes with an expensive catch.
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