My open and click-through rates have gone down – what should I do?

By making certain adjustments, it’s easy to get whatever open and click-through rates you like, but that won’t necessarily deliver the best results for your business. Dean Maidment has some tips for better assessing your email marketing performance.

This article was developed by Taguchi to let readers know about its free guide: ‘Expert Walkthrough: Marketing Automation Made Simple’ »

Open and click-through rates – easy to measure and easy to understand. An increase is good, a decrease is bad, right? Well, sort of. If they are trending down, surely that must be bad thing? Maybe… but to be honest, there is no simple answer to this question.

Our platform sends millions upon millions of emails per month across a range of clients and industries, so here is a simple example from one month to illustrate how complex it can be to analyse performance based on open and click-through rates:

Across retail communications, the average open rate for marketing email activity was 20.96% and the average click-through was 2.50%. In the travel, transportation and hospitality industry, the rates averaged 20.69% and 2.17% respectively.

Observation: They’re pretty similar, with retail sector having slightly higher rates.

 

Question one

Does that mean retail emails are doing better than travel and hospitality?

Answer: No idea, they’re just rates, and they don’t tell you anything about sales, customer retention, acquisition costs, reach or even overall engagement.

 

Question two

Would comparing like-for-like industries provide better insight?

Answer: Probably not. They are still just rates and they still tell you very little.

Open and click-through rates tend to be scrutinised when they are lower than expected, the assumption being that there is a problem.

Was it the copy, the deliverability or some other issue that needs to be fixed?

The truth is, open and click-through rates are heavily influenced by a multitude of interrelated factors. These include things like your customer acquisition and contact strategy, your database size, hygiene and list residence (the length of time subscribers have been in your database).

By adjusting your segmentation strategy and boosting frequency of communication with your best subscribers, it’s easy to reach whatever open and click-through rate numbers you like. However this may not deliver the best outcome for your business. Therefore, instead of measuring performance solely on open and click rates, I always emphasise the importance of understanding and measuring conversion, email ROI and overall engagement as your primary metrics.

If you want to pick a single metric to determine the health of your email strategy, it’s conversion. If you see a drop there, you should work backwards through your other metrics to find a reason and determine how the other levers can be adjusted to increase conversion. Focusing on conversion better aligns your email or marketing automation strategy with your organisation’s KPIs (such as sales performance) and ensures that when trade-offs are to be made, they benefit the business.

For example an increase in email frequency leads to reduced open and click-through rates, but still produces a very positive result overall. Despite the declining rates per email, you could be driving more conversions. Conversely, relying solely on trends in open and click-through rates may lead you to reduce your email volume and thereby reduce conversions.

To understand this relationship, you really need to delve into the details of your program to work out the point at which sending more email means a negative ROI.

Other useful metrics – aside from open and click-through rates – you may want to track in assessing your email marketing performance include:

  • Engagement performance
  • predicted future conversion trend, and
  • customer lifetime value.

If these are trending up, then overall the impact will be positive and you will likely be generating more revenue and driving more engagement through your increased contact frequency, even if your open and click-through rates per email have declined. However, continuing with this strategy means you may need to accept lower open rates and possibly even lower conversion value per email.

As every company’s circumstances are different, there is no one true combination of factors that will ensure maximum performance of your campaigns. Therefore best practice is to test changes to various components to see what works for you. Two simple ways to start to improve performance are:

  1. Adjust your segmentation approach to target the most engaged subscribers (as measured by historical engagement) more frequently than those that are less engaged, and when you do send to less-engaged subscribers, try varying the message from what you’re sending to the more-engaged subscribers.
  2. Set frequency caps to limit your subscribers to receiving a set number of broadcast emails per week based on their engagement levels, which will help increase the open rates of each of those emails. Then tune the frequency cap up or down to find the level that maximises customer lifetime value, taking into account the impact on conversion and unsubscribe rates.

The potential trade-off between email frequency and open and click-through rates should be analysed and factored into your email or marketing automation strategy. The balance will be different for every business and may change over time. Therefore, while we can’t tell you exactly what trade-off is right for you, we can certainly assist with tactical advice to help you manage this process in line with your business objectives.

All sounding too complex? That’s probably why so many people just look at open and click-through rates. However, it’s not really that difficult, once you know what you’re looking for. So, where do you start? Firstly, move to measuring conversion and work your way from there.

Dean Maidment is managing director at TaguchiMarketing

 

For more tips on how to better implement email marketing and automation programs, check out Taguchi’s Expert Walkthrough »

 

 

 

Photo by Kunj Parekh on Unsplash