Email benchmark report the new age of email marketing

pa ss Q ar ke t in g Co m M l Em The New Age of Email Marketing Embracing the Subscriber Influx Executive Overview Over the last decade, consumers have grown increasingly overwhelmed by the sheer number of email marketing messages in their inbox In fact, when Gmail introduced its promotions tab in 2013 to help users make sense of all the incoming content, many marketers feared that their campaigns would go unseen and that the email channel would lose effectiveness But according to Yes Lifecycle Marketing data from Q1 2017, four years after the launch of Gmail’s promotions tab, most of these fears turned out to be unfounded Consumers want to receive and open marketing emails regardless of how flooded their inboxes may be However, consumer engagement (unique click and click-to-open rates) continues on a steep decline, which means that brand messages little to encourage subscribers to click through and engage beyond the open This drop in engagement is the trend marketers should focus on reversing in 2017; after all, email ROI depends on consumers clicking through emails Successful brands are increasingly turning to triggered campaigns while also considering day of the week and industry trends In this report, we highlight the importance of these email tactics and offer actionable tips for brands to meet the evolving subscriber expectations 1.877.937.6245 | marketing@yeslifecyclemarketing.com | www.yeslifecyclemarketing.com | pg Q1 Benchmarks THE NEW AGE OF EMAIL MARKETING Key findings from this quarter: • New subscribers make up a greater portion of marketers’ email audience: New subscribers made up percent of marketers’ subscriber base, up percent year over year (YoY) and up 30 percent over the last three years • Open rates increased: The average open rate is now 16.1 percent, a percent YoY increase and a 3% increase over the last two years • Click-to-Open rates are on the decline: The average click-to-open rate (CTO) is 8.9 percent, a 13 percent decrease YoY and a 22 percent drop over the last two years • Unique click rates dropped: The average unique click rate declined by percent YoY and 20 percent over the last two years • Triggers lead to significant ROI: Triggers made up just under percent of total campaigns in Q1, yet they generated almost times the click rate, almost double the open rate, and almost triple the CTO rate of business-as-usual (BAU) emails • Day of the week matters: Saturdays garnered the highest conversion rates with 2.4 percent of all email clicks turning into a purchase, and this number jumps to percent for triggered campaigns Fridays saw the highest unique click and click-to-open rates This is the new age of email marketing: If the timing is right and the content is relevant, your subscribers are ready to listen 1.877.937.6245 | marketing@yeslifecyclemarketing.com | www.yeslifecyclemarketing.com | pg Q1 Benchmarks THE NEW AGE OF EMAIL MARKETING Consumers want your emails! According to data from more than billion emails sent in Q1, the new age of email marketing involves eager consumers ready to communicate with brands via email, as long as the content is relevant to their needs and interests at the time One metric that defines the new age of email marketing is a growing number of new subscribers within brand email lists New subscribers now make up percent of marketers’ subscriber base That’s an percent increase YoY and a 30 percent increase over the last three years The growing number of new subscribers might be prompted by utilitarian needs – when consumers have a need for specific items, they join a brand’s mailing lists to get immediate offers For instance, a consumer looking for patio furniture from a home goods retailer might see a pop-up window when she visits the retailer’s site offering a percent off discount in exchange for her email address She opts into the retailer’s mailing program to get the discount for the furniture she’s looking to buy immediately Despite years of speculation that consumers are growing wary of marketing emails, the data suggests otherwise The growing number of new subscribers means both willingness to subscribe to and willingness to open marketing emails Even if they don’t have an immediate need, some consumers sign up because they like the brand, and feel its content is relevant Bottom line: if they anticipate that the emails will be contextually relevant, they’ll subscribe Percentage of new subscribers in brand databases by quarter 4.1% 6.8% Q1 | 2014 5.6% Q1 | 2016 Q1 | 2015 6.1% Q1 | 2017 1.877.937.6245 | marketing@yeslifecyclemarketing.com | www.yeslifecyclemarketing.com | pg Q1 Benchmarks THE NEW AGE OF EMAIL MARKETING Another metric that illustrates the new age of email marketing is increasing open rates The average open rate has registered an increase for the second quarter in a row after several quarters of mild decline The average open rate is now 16 percent, a percent increase QoQ and a percent increase YoY Higher open rates mean that when consumers have a need, they are willing to sieve through emails to find the right product and offer The consumer looking for patio furniture will open emails from a home goods brand advertising a sale on the products she’s browsed, or one offering a general discount at the time she’s looking to buy This is another great lesson for marketers: consumers will seek out your emails when the time and content are right for them Open Rate by Quarter 18% 17% 16% 15.7% 15.0% 15% 15.4% 14.8% 14.8% 14.8% 14.6% 14.3% Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 16.1% 14% 13% 12% Q1 2015 Q2 2015 Q4 2016 Q1 2017 More new subscribers and rising open rates sound great, right? Not so fast For this to truly mean good news, these metrics must also translate into higher engagement (in the form of increasing unique click rates and click-to-open rates) However, consumers engage less with email now than they did three years ago In fact, the average click-toopen rate decreased 13 percent YoY and 22 percent since 2015 Unique click rates follow the same pattern They’ve declined percent YoY and 20 percent over the last two years So even though consumers are signing up for emails and opening them, the rate at which they engage with marketing messages (think: clicking through to the brand’s site) remains stagnant Click-to-Open Rate by Quarter 12.0 11.5% 11.4% 11.5% 11.3% 11.0% 10.9% 10.2% 10.5% 10.0% 9.7% 9.9% 9.5% 9.0% 8.9% 8.9% Q4 2016 Q1 2017 8.5% Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 1.877.937.6245 | marketing@yeslifecyclemarketing.com | www.yeslifecyclemarketing.com | pg Q1 Benchmarks THE NEW AGE OF EMAIL MARKETING Recommendation: Despite higher open rates, email content across the board is not engaging enough to motivate subscribers to click through to a brand’s website, which can lead to declining conversion rates and a loss of revenue over time In order to boost engagement, and ultimately conversions, brands must more to encourage subscribers to click through This means offering valuable, relevant information that meets the needs of the audience at the time and is personalized to each subscriber Home Depot recently sent a campaign about the plants that are in season based on each subscriber’s location along with recommendations for projects to with each type of plant This immediately captures the audience’s attention and is a welcome departure from typical promotional emails The brand did a great job of bringing the messaging back to its products by offering recommendations like gardening tools and other supplies To bring back the patio furniture example, moving forward the home goods brand needs to target this shopper with content that is relevant to her, otherwise she’ll disengage Cookie-cutter offer emails (i.e those advertising a percent or dollar amount off) are not enough to keep her engaged long-term, so the brand needs to adapt to her channel preferences, personalize offers based on browse and purchase history and send unique content informed by her interests and demographic information This could be a value-added message with grilling recipes for her outdoor party (celebrating her new patio furniture) or a list of family-friendly outdoor activities if she’s a mom 1.877.937.6245 | marketing@yeslifecyclemarketing.com | www.yeslifecyclemarketing.com | pg Q1 Benchmarks THE NEW AGE OF EMAIL MARKETING Here are a few ways to create engaging content: Be unique and consider context: Email content doesn’t have to be dry Have fun with your message, as long as it’s relevant to your audience and takes into account a unique characteristic about them In the Netflix example below, the brand offered content that would instantly engage House of Cards fanatics and appeal to their specific interest in the Netflix original show The brand announced the release of a new House of Cards season with an email coming from the show’s main character, instead of sending a basic notification While this example may not translate directly to all industries, brands can take note of the unique, tailored approach, which centers on the way consumers engage with the Netflix brand: through characters and storytelling Incorporate lifecycle communications: Reach subscribers with personalized messaging based on their customer lifecycle stage Did they recently sign up for your mailing program? Send them an offer as a thank you Did they visit your site but not convert? Follow up with an email reminder of what they were looking at and highlight other relevant products Identify appropriate channel touch points: Consider supplementing email with other channels such as SMS, direct mail or social depending on your subscribers’ preferences For a subscriber who engages with SMS at high rates, swap your email offers with SMS And make sure that the content is consistent across both channels and that offers can be easily redeemed online or in-store In the Home Depot example, if a subscriber recently purchased gardening tools and you know she engages with SMS, send her a text with exclusive offers for in-season plants in her area Personalize timing and frequency: Use preference centers to enable subscribers to select the appropriate message frequency Explore tools that can help optimize send times based on consumer data like location or highest likelihood to engage This is a great way to nail down the best time a message should reach each subscriber thus maximizing opens and engagement 1.877.937.6245 | marketing@yeslifecyclemarketing.com | www.yeslifecyclemarketing.com | pg Q1 Benchmarks THE NEW AGE OF EMAIL MARKETING Triggers: Low risk, high reward One of the most effective ways for brands to deliver engaging content is through timely triggered campaigns, informed by specific consumer actions or data and deployed within a set timeframe Triggers are designed to elicit an immediate response For example, brands could send triggered emails to subscribers who abandon their shopping carts, or to broader audiences like Chicago-based consumers who might be enticed by relevant offers following the Cubs’ World Series win Triggers make up just under percent of total campaigns marketers send, yet they generate almost times the click rate, almost double the open rate, and almost triple the CTO rate Additionally, the average order value for BAU retail emails is $56.34, compared to $61.54 for triggered messages Marketers are missing a huge opportunity to drive engagement and conversions by not deploying more triggered campaigns Performance of Triggered vs Business as Usual (BAU) Communications Open Rates Click-to-Open Rate Unique Click Rates 21.6% 27.6% 28% 22% 8% 26% 20% 7% 24% 18% 6% 22% 16% 5% 20% 14% 4% 12% 3% 18% 15.3% 8.4% 16% 10% 14% 8% 1% 12% 6% 0% BAU 2% 6.0% 1.3% Triggered 1.877.937.6245 | marketing@yeslifecyclemarketing.com | www.yeslifecyclemarketing.com | pg Q1 Benchmarks THE NEW AGE OF EMAIL MARKETING Types of triggers include: Transactional: Emails in response to transactions garner the highest open rates, making them a must for marketers with ecommerce websites (or even exclusively physical locations) Thank a consumer for his purchase, send a receipt, and offer personalized recommendations for other products that supplement his new item Remarketing: Remind subscribers of the items they left in their shopping cart or browsed through Pair the reminder email with customer testimonials or reviews of the featured product, or offer a personalized discount to those who make a purchase within the next 24 hours Remarketing triggers also provide an opportunity for brands to cross-sell relevant products based on consumers’ browse and/or purchase history Customer lifecycle: Customer lifecycle events include new subscriber sign-ups, first-time purchases, loyalty program memberships, anniversaries, and more Brands can acknowledge and celebrate their customers’ lifecycle stages with a triggered message designed to build loyalty and trust For example, when consumers sign up for your email program, offer them a discount as a thank you to encourage them to immediately convert to purchasers Real-time: Reach groups of subscribers based on real-time events Most often, these triggered emails are based on location For example, brands could offer relevant items to consumers in New York in advance of a big snowstorm, or in Boston after the Patriots won the Super Bowl Transactional Remarketing Lifecycle Real-time 1.877.937.6245 | marketing@yeslifecyclemarketing.com | www.yeslifecyclemarketing.com | pg Q1 Benchmarks THE NEW AGE OF EMAIL MARKETING Due to the unquestionable value of triggered emails, brands are increasingly incorporating them into their programs For example, while 65 percent of marketers had adopted welcome campaigns in Q1 2016, that number grew to 72 percent over the last year Since welcome triggers tend to be the first trigger marketers adopt, it’s encouraging to see it on track to becoming universally used Similarly, browse abandon and abandoned cart emails grew in adoption Transactional triggers are also gaining traction These types of triggers (in response to a recent purchase) are great because they offer more room for personalization and cross-sell opportunities So if a subscriber purchases patio furniture from a home goods brand, the brand could send recommendations for grills or outdoor decorations within the e-receipt email In Q1 of 2016, 18 percent of brands sent e-receipts and 14 percent sent order/shipping confirmations through their ESP while in Q1 2017, those numbers were 23 percent and 17 percent, respectively The relatively low number of transactional emails (it’s likely that most brands use them, yet our data shows that only about one in four do) could be because many marketers default to their e-commerce platform to send these types of communications instead of their ESP If this is the case for you, beware: e-commerce platforms can be inflexible, offer only rudimentary design and have major challenges with integrating data that supports personalization and cross-selling Abandoned cart Q1 2016 18.7% Anniversary Q1 2017 21.5% Q1 2016 4.4% Browse abandon Q1 2016 5.8% Birthday Q1 2017 6.5% Q1 2016 14.8% Welcome E-receipt/purchase confirmation Q1 2017 7.4% Q1 2016 18.1% Order/shipping confirmation Q1 2016 14.2% Q1 2017 17.0% Q1 2017 14.8% Q1 2016 64.2% Q1 2017 23.0% Q1 2017 71.9% Reactivation Q1 2016 19.4% Q1 2017 23.0% 1.877.937.6245 | marketing@yeslifecyclemarketing.com | www.yeslifecyclemarketing.com | pg Q1 Benchmarks THE NEW AGE OF EMAIL MARKETING Recommendation: Triggered messages are a great way for marketers to boost engagement and encourage subscribers to take immediate action; they drive engagement because they are: • Timely: Customers receive them immediately after they take an action • Relevant: The content is personalized to the recipient • Informed: The message is informed by customer data • Actionable: There is a clear call-to-action for the recipient While triggers account for a tiny portion of marketers’ sending volume, they yield a huge return on investment as illustrated by higher engagement rates and higher average order values Growing adoption of triggers indicates that savvy marketers are starting to realize the benefits of these types of campaigns In fact, triggers are so effective that each incremental trigger brands add to their marketing programs will improve overall performance and KPIs Given the higher average order value and engagement for triggered emails, marketers can actually earn 2.8 percent more revenue from each additional trigger they implement and deploy While brands should always consider the type of content that will resonate with their unique subscriber base, introducing triggers is appropriate for almost every mailing program 1.877.937.6245 | marketing@yeslifecyclemarketing.com | www.yeslifecyclemarketing.com | pg 10 Q1 Benchmarks THE NEW AGE OF EMAIL MARKETING Everybody’s working for the weekend Another way brands can combat declining engagement rates is by tracking and analyzing day of the week email engagement and conversion patterns In Q1, Friday was the best day of the week for engagement, while Saturdays garnered the highest conversion rates This trend is likely the result of consumers converting over the weekend when they have ample time to act on emails they received over the rest of the week, particularly on Fridays Saturdays have been the best for conversion for three out of the last four quarters The only exception, logically, was Q4 2016 when massive retail holidays like Black Friday and Cyber Monday drove the highest conversion rates on those days Engagement by Day of the Week Q1 2017 Open Rate Unique Click Rate Total Click Rate Click-to-Open Rate Conversion Rate Mon 14.7% 1.3% 1.8% 8.7% 2.4% Tues 15.4% 1.2% 1.7% 7.6% 2.5% Wed 14.7% 1.3% 1.9% 9.1% 1.8% Thurs 15.5% 1.5% 2.1% 9.8% 1.9% Fri 18.2% 2.0% 2.9% 10.8% 2.5% Sat 14.9% 1.1% 1.6% 7.5% 3.6% Sun 15.6% 1.2% 1.7% 7.9% 2.4% AVERAGE 15.7% 1.4% 2.0% 9.0% 2.4% 1.877.937.6245 | marketing@yeslifecyclemarketing.com | www.yeslifecyclemarketing.com | pg 11 Q1 Benchmarks THE NEW AGE OF EMAIL MARKETING Recommendation: Deploying campaigns on the right day of the week can lead to a significant ROI increase Even though every brand is different depending on industry, subscriber base, and business objectives, there is plenty of value for marketers to keep a close eye on when their audience is most likely to engage with their campaigns and, equally as important, convert A solid email program can include multiple emails deployed throughout the week, depending on each subscriber’s frequency settings (as defined in the preference center) However, marketers will be smart to incorporate Fridays in their mailing schedules given the high engagement on this day and the high conversion on the following One way marketers can take advantage of the high performance of Fridays and Saturdays is to opt for sending some of their best-performing campaigns on those days This could be a two-for-one for savvy brands that can amplify the performance of already high-performing messages and generate more revenue due to the high conversion rates on Saturdays Consumers are clicking emails and browsing on Fridays but converting on Saturdays either in-store or online The easier it is for subscribers to act on an email when the time is right, the greater the chance for them to purchase To maximize conversion, marketers should ensure their Friday emails include a clear call to action, and an easy process for redeeming offers FRIDAY SATURDAY Convert Click 1.877.937.6245 | marketing@yeslifecyclemarketing.com | www.yeslifecyclemarketing.com | pg 12 Q1 Benchmarks THE NEW AGE OF EMAIL MARKETING Q1 Industry Breakdown It’s a given that consumers interact differently with a retail email than they with an insurance or entertainment one As such, it’s important for brands to consider the patterns specific to their industry when setting email marketing goals and developing strategies to reach them Yes Lifecycle Marketing found that in Q1 insurance emails garnered the highest engagement across the board, followed by financial services These two industries are likely engagement outliers because of the sensitive nature of the content they advertise There is more at risk for the consumer if she ignores an email from a bank informing her of an overdraft fee than an email from a favorite retailer promoting an upcoming sale Retail and hospitality likely see lower engagement because most of the products and services in these industries are non-essential and the information they send in their messages isn’t sensitive Brands in these industries can greatly benefit from triggers, personalization and out-of-the-box content strategies to capture consumers’ attention and boost engagement Interestingly, while the B2B industry garnered the lowest open rate (11.5 percent), it also generated the highest CTO rate (19.3 percent) This indicates that B2B brands include the right content within the body of emails, but struggle to entice subscribers to open B2B brands could benefit from paying close attention to the days and times subscribers are most likely to open and plan accordingly Additionally, just because your buyers are businesses doesn’t mean they don’t want personalized content B2B brands can drive higher open rates by using personalized, relevant subject lines marketing the right projects and services to the right customers Open Rate Unique Click Rate Total Click Rate Click-to-Open Rate Technology 11.5% 16.3% 15.8% 18.1% 35.7% 16.8% 26.5% 13.9% 15.1% 13.5% 2.2% 2.0% 1.1% 1.9% 2.8% 0.8% 6.5% 2.1% 1.2% 0.7% 3.2% 3.3% 1.6% 2.5% 3.7% 1.2% 9.5% 3.0% 1.7% 1.0% 19.3% 12.2% 7.1% 10.7% 7.8% 4.7% 24.7% 14.8% 8.0% 5.0% AVERAGE 16.1% 1.4% 2.0% 8.9% B2B Consumer Services CPG Entertainment Financial Services Hospitality/travel Insurance Publishing Retail/Wholesale All industries can more to boost engagement, but it’s important that marketers understand the nuances of their industry when developing email strategies Above all, marketers should know their own customers best and should develop campaigns that best serve their unique audiences 1.877.937.6245 | marketing@yeslifecyclemarketing.com | www.yeslifecyclemarketing.com | pg 13 Q1 Benchmarks THE NEW AGE OF EMAIL MARKETING Conclusion The new age of email marketing stipulates that consumers are ready to engage and purchase from marketing emails when the time is right and the content is relevant This is illustrated by the growing proportion of new subscribers in marketers’ databases and by the steadily increasing open rates However, brands have yet to fully embrace this new age Declining click and click-to-open rates indicate that email messages are not engaging enough to motivate subscribers to consistently interact with brands In other words, consumers are engaging with emails that offer them deals on the items they need, but they lose interest after This means brands have an opportunity to get this right so long as they get the content and timing right It’s a no-brainer that brands should be personalizing content to the user based on preferences, demographic information and browse history But they can’t stop there The most effective campaigns use customer preference centers to determine the right frequency, and technology that can optimize the timing of email delivery Channel matters too The right content and timing is even more effective when paired with specific channel strategies for each subscriber Supplement email messages with other channels like SMS, social, push, or direct mail to truly reach subscribers where they are Lastly, Q1 data confirms that triggered messages are a great way for marketers to drive more consistent engagement through lifecycle, transactional, remarketing or real-time communications Use them within your regular mailing program to boost engagement, conversion rates and, ultimately, ROI In the new age of email marketing customers are ready to listen and engage – are you ready? 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Yes 877.937.6245 Somewhat marketing@yeslifecyclemarketing.com No yeslifecyclemarketing.com About Yes Lifecycle Marketing Yes Lifecycle Marketing generates superior results by turning data into action through its cross-channel marketing platform Yesmail360i and expert agency services By combining technology and professional expertise, we transform brands into true insights-driven businesses and empower them to make better, smarter, and faster decisions To learn more, call 1-877-937-6245 or email marketing@yeslifecyclemarketing.com  ... 1.877.937.6245 | marketing@ yeslifecyclemarketing.com | www.yeslifecyclemarketing.com | pg Q1 Benchmarks THE NEW AGE OF EMAIL MARKETING Another metric that illustrates the new age of email marketing. .. audiences 1.877.937.6245 | marketing@ yeslifecyclemarketing.com | www.yeslifecyclemarketing.com | pg 13 Q1 Benchmarks THE NEW AGE OF EMAIL MARKETING Conclusion The new age of email marketing stipulates... and engagement 1.877.937.6245 | marketing@ yeslifecyclemarketing.com | www.yeslifecyclemarketing.com | pg Q1 Benchmarks THE NEW AGE OF EMAIL MARKETING Triggers: Low risk, high reward One of the most