Email marketing is far from dead. In fact, email has the highest return on investment (ROI) for marketers. Even compared to social media, email comes out on top.
“Every marketer knows that email typically drives the best potential ROI when compared to search, social, and most other tactics, offline or online,” said Michael Barber, Founder of barber&hewitt, a strategy and planning firm focused on business-to-business (B2B) organizations.
However, like all marketing tactics, email performs best when it’s applied in a way that complements your organization’s core business objectives.
Using data collected by B2B research firm Clutch, this article explores the three main challenges businesses encounter with email marketing and outlines how to overcome these hurdles to harness email’s full potential. 3800% ROI – $38 for every dollar spent – is not a pipedream.
- Nearly half (47%) of respondents say brand-building is their main goal for email marketing.
- The metrics email marketers find most important mainly correspond to this goal: subscriber list growth (25%) and click through rate (19%). Conversion rate (22%) is the only outlier.
- The top three email marketing challenges are targeting and segmenting (40%), increasing subscribers (38%), and tracking results (37%).
- 28% of organizations still pay to rent email lists.
Data comes from Clutch’s Email Marketing Survey 2016. The study included 303 respondents who describe themselves as either expert, advanced, or intermediate email marketers. They work at companies with more than 100 employees, with 47% representing companies with more than 500 employees. 31% work for B2B companies and 69% work for business-to-consumer (B2C).
Top 3 Email Marketing Challenges
No single aspect of email marketing stands out as a primary challenge. Rather, email marketers struggle with a variety of email features and functionalities.
Challenge #1: Targeting and Segmenting
The advent of email marketing goes hand-in-hand with batch-and-blast distribution. You create a message – maybe a newsletter or a promotional offer – and send it to every email address on your list. Unfortunately, this strategy forgoes personalization, since all recipients are treated the same.
One way to improve your emails is to identify the different personas that compose your audience and target their specific interests and needs. By identifying characteristics and habits that distinguish your subscribers from each other, you can create content that appeals to each group.
The process of sending different content to targeted groups is called segmentation.
Why Is Segmentation Challenging?
The ability to segment your subscribers depends on the data you collect and your capacity to process it. Most brands actually rank their ability to extract useful insights from customer data ‘below average.’
“Many marketers find it difficult to integrate their data,” said Samantha Anderl, Senior Director of Demand Generation at Campaign Monitor. “Data integration requires tying all your platforms together. Finding software with the right integrations and a team dedicated to providing a great integration experience is key.”
What To Do About It…
We know that sending messages to targeted groups within your contact lists makes your email campaigns more relevant. In fact, segmented email campaigns have a 14% higher open rate and 63% more clicks.
So, what can you do?
Send content your contacts care about, at a time when they’ll be in their inbox. And, remember that where and when people open emails may surprise you.
“Making your subscribers feel like each email is generated directly for them – a one-to-one message rather than a one-to-many message – will make them more likely to interact and convert,” said Anderl of Campaign Monitor.
There are numerous ways to segment your email audience. It’s difficult to determine where to start.
Although it may be easy to group subscribers based on demographic characteristics, like location, age, and gender, oftentimes, it’s more effective to personalize content based on why someone chose to do business with your company.
“The best advice that I could give to someone is for them to gain an understanding well beyond demographic datasets,” said Barber of barber&hewitt. “Typically, people buy based on attitudinal decisions, not necessarily falling into a customer profile just because they are 30-45 years old, Caucasian, with a buying budget of X, for example.”
Challenge #2: Subscriber List Growth
Increasing a number of people who subscribe to email campaigns is a persistent challenge for 38% of email marketers surveyed. In fact, when asked to rank the metrics they track to determine the success of their email marketing, 25% named subscriber list growth most important.
Why is the size of your subscriber list so important? The larger your subscriber base, the greater your chance of converting more people, driving more traffic to your website, or making more sales.
“Out of all the channels I tested as a marketer, email continually outperforms most of them. Not only does it have a high conversion rate, but as you build up your list, you can continually monetize it by pitching multiple products,” said Neil Patel, Co-Founder of KISSmetrics, CrazyEgg, and QuickSprout, in an interview with Campaign Monitor. “And, if you aren’t selling products, you should still collect emails so you can get people back to your site on a continual basis.”
Why Is Subscriber List Growth Challenging?
If you want to distribute your content to more people, just add their name and email address to your list. Easy, right? Unfortunately, this process is illegal. According to the 2003 CAN-SPAM Act, which addresses spam messages in the inbox, all individuals and companies must clearly display the option to unsubscribe from messages.
Most email marketers capture subscriber information through,
- Opt-in forms on their company's website
- Social media
- Online purchases
These tactics require potential subscribers to land on a company’s website first. This means email is a form of converting potential customers and keeping existing customers engaged. It’s harder to attract new customers when they are not already familiar with your brand.
“A customer may click directly from an email and place an order,” writes Carolyn Nye, Director of the Digital Interactive Group at Acxiom, in an article for Practical Ecommerce. “A new subscriber may go to your site, do some comparison shopping, and then return via a Google search days later.”
What To Do About It…
Make it easy for people to subscribe. Some steps to take include creating a simple sign-up form, providing multiple ways for people to subscribe, and presenting an array of correspondence options, like a monthly newsletter and weekly digest.
Ultimately, potential subscribers need to know that your emails will be useful to them.
“The best way to get people to subscribe…is for email marketers to show them that their brand adds value beyond sending them a sales pitch,” said Kayla Lewkowicz, Marketing Coordinator at Litmus, a web-based email creation, testing, and analytics platform. “Email marketers should help showcase fantastic, helpful content or a great product that adds value.”
No matter how desperate you are to grow your subscriber list, avoid buying email addresses, Lewkowicz of Litmus also advises. Surprisingly 28% of respondents admit that they buy contact information to enhance their company’s email marketing, our survey found.
“Not only is [buying an email list] a bad marketing practice, but it’s actually illegal in many countries,” said Lewkowicz.
Challenge #3: Tracking Results
If you use an email or marketing automation tool, you’re presented with an array of metrics after you distribute an email campaign – email opens and clicks, list growth, successful deliveries, and content click through, to name a few.
Which metrics are most important? Our survey respondents had the same question, with 37% saying that tracking results is a challenging aspect of their email marketing.
Why Is Tracking Results Challenging?
Choosing which metrics to focus on and report – which numbers prove the value and ROI of an email campaign – is the challenging part of tracking results.
When asked to rank the metrics that are most important to track and report, email marketers emphasize subscriber list growth (25%) the most, followed by conversion rate (22%), click through rate (19%), delivery rate (18%), and open rate (16%).
What To Do About It…
Worthwhile metrics vary from business to business. A good rule of thumb is to choose holistic metrics that directly reflect whether email is helping your company reach its main goals.
“The metrics to track are the ones that really impact business and marketing objectives,” said Barber of barber&hewitt. “It’s great to track all available opportunities, like deliverability, opens, clicks, conversions, customer lifetime values, and so on, but if those aren’t speaking to what actually drives dollars and business opportunities for the organization, then time should be focused elsewhere.”
For example, nearly half (47%) of email marketers surveyed said brand building is their main goal for email, followed by lead generation, and lead nurturing. To prove how email pushes forward your company’s brand building initiatives, consider tracking click-through, open, and subscriber retention rates.
What metrics correspond to these goals? The table below guides you in matching goals with relevant email metrics.
Let's recap some key insights from our Email Marketing Survey:
- Although 47% of email marketers strive to build their company's brand through email, they find the tasks needed to reach this goal challenging.
- Targeting and segmenting your email audience goes beyond simply breaking down a list based on demographic data. A more effective segmentation strategy entails distributing content based on your audience's attitudes toward your company.
- Grow your subscriber list by sending emails that are useful. Don't buy or rent email lists.
- Tracking email metrics can be overwhelming. Email marketing tools present you with an array of information. But, if you understand your company's marketing goals, you can home in on metrics that correspond to them directly.
For more resources on email marketing, see the first two articles in our series:
- Part II: Email Marketing Case Studies: How Loyal, Ceros & 730DC Use Their Email Newsletter
- Part III: Why You Need to Invest More Resources in Email Marketing