Lower click rates are not a problem

In my recent post I looked at why increasing the send frequency has a counter intuitive effect of increasing the delivery rate.

This time I’m considering why viewing a campaign in isolation can also take you in the wrong direction.

Consider a monthly campaign with an 8% click rate. If the monthly campaign is changed to twice a month, the commonly accepted wisdom is the click rate will fall. Assuming that wisdom is true and taking that the click rate drops to 6% on each campaign, then is this a bad result? What’s better, the twice monthly campaign with a 6% click rate or once monthly with an 8% click rate? The twice monthly campaigns would be better since the overall amount of customer engagement measured by absolute number of clicks is higher. Only if the click rate of the twice monthly campaigns is halved to 4% is the engagement the same.

To make a fair comparison when different frequencies are involved the monthly number of clicks per customer across all campaigns in the month must be compared.

The Revenue Per Email (RPE) measure is not useful in this case. The revenue per customer per month is a better metric. After all you would accept a small reduction in revenue per email if there was an overall increase in revenue per month, right?

Of course the long term impact of email frequency should be considered. Will the click rate drop with time in the higher frequency case? To have real evidence that any long term changes in individual campaign performance is due to frequency, create a control group and compare over time.

I’m not saying lower click rates are fine per se. Even better would be to double the emails per month, keeping the per campaign metrics the same or better. Added to which with the advent of intelligent inboxes and graymail filtering, inbox placement will be impacted if the engagement rate per campaign is too low.

So what is the click rate goal? Nobody expects to get a 100% click rate. It would be great, but after all, tweets go unseen, posts go unread, snail mail goes unopened and TV ads ignored.

As 100% click rate is not the goal then what is? 5%, 10% or 15%? If you currently get 10% what makes it the ‘right’ number?

It’s the wrong question. The question is revenue and profit. Certainly that’s the question for the CEO. The measure is then revenue per customer per month.

Yes, do consider per campaign click rates and revenue per campaign and look to improve them. Individual campaign metrics are diagnostics to understanding where improvement is possible. But don’t view and evaluate campaigns in total isolation. Look at the metrics and revenue across all activity.

Tim Watson

Tim has over 8 years experience in B2C and B2B Email Marketing. He is an Email Marketing Consultant and founder of Zettasphere, helping email marketers get better results and improve revenue from email. An active email industry commentator, DMA Email Council member and chairman of the DMA Email Best Practice hub. He enjoys pushing the boundaries as email continually evolves.

5 Comments

  1. Jarrod / Purchase Digital said:

    The main problem with trying to learn from others in regards to email marketing best practice is that every customer base and product is different. There are techniques that should be employed regardless of product etc, but like most email marketing posts like this, they finish with “test it to find out what works best for you”. Your article does a good job of reminding us to look at the channel holistically not just on a send level, and to keep in mind other factors that could be influencing behaviour.

    • Tim Watson said:

      Thank you for the comment, I agree that what’s right for one isn’t right for another and so called best practice is better considered as sensible guidelines, that is often helpful. But consider your own objectives and customers and step out of the box too.

  2. Christina Malaga said:

    Hi Tim

    Everything you said in the above article makes good sense. However (and I’m sure you’ll agree with what I am about to say), it should also be pointed out that in cases where you first obtained your email customers via an optin box / squeeze page on a website, then the very FIRST thing that needs to be done is to try and increase your opt-in rate.

    For example, if you redesigned your optin box (i.e. reworded the heading / offered a free white paper or giveaway of some sort) and boosted your optin rate from say, 4% to 16% (very dooable, by the way), your revenue and profit from subsequent email marketing would increase by the same factor EVEN IF your monthly email click-through rate fell by a few percentage points.

    Once you have your optin rate maximised to the point where it’s hard to improve, anything you do to increase your subsequent email click-through rate will be an absolute bonus!

    Christina Malaga
    outdoor blinds specialist

    • Tim Watson said:

      Indeed, the opt-in process is often overlooked for something that could and should be improved to get better list growth. Very a simple web form is created by IT and never considered further.

      In the whole email customer lifecycle there are many elements to improve and optimise. This post was just about frequency, opt-in, unsubscribe, design, relevance can all be continuously optimised.

      Thanks for adding your comment.

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