Myth #8: ROI is Hard to Measure

[This is part 1 of the series "Debunking the Myths of E-Mail Marketing."]

Last week I promised you I would start a series based on the presentation I recently gave to the Chamber of Commerce, called “Debunking the Myths of E-Mail Marketing.”  I’ve decided to start at #8 and move backwards.  So here’s the first of eight myths.

ROI Is Hard to Measure

Many people say that the return on social media is hard to measure.  I believe that’s more true than any other type of internet marketing.  However, when talking about e-mail marketing, this is actually one of the easiest channels to track success with!

The trick is knowing what to measure.  Once you’ve got the tools, and you’re using those tools to measure the right data, the rest is fairly straightforward.

First, I’d like to share some tips to help get you started.

1. Identify clear goals for your campaign.  What do you want your customers to do?  Buy a product, click on your article, read your blog, or go to your Facebook page?  Choose your objective(s) and stick with it.
2. Know what your click rate averages are for your industry.  If you have a high quality list, it’s easy to get better than average click rates.
3. Know the average click rates for your own list.  You want to try to continually improve them.
4. Have a great landing page with a clear and compelling CTA (Call To Action). Give your readers only ONE thing to do, and tell them why they should do it.  Then tell them exactly what to do to take that action.  Ideally each e-mail campaign will have it’s own landing page.
5. Understand “conversions.”  There is a lot of great information out there about this, so I won’t go into it here.  If you’re not sure, do some research — you can learn everything you need to know (for purposes of this exercise) in about a half hour.

There are two measurement tools that you absolutely must have.

Google Analytics

This is a free tracking tool that will give you information about what your users did on your site.  Where did they go?  How long did they stay?  What kind of browser were they using?  This information can give you a lot of control, and a very granular level of measurement, particularly useful when you want to “drill down” into a specific metric.

ESP Performance Reports

All ESPs (E-mail Service Providers) provide at least basic reporting tools with which you can measure the relative “success” of any campaign in a variety of ways.  I have my own particular favorite, which I’ll cover a few posts from now.  These performance reports will offer one very specific piece of data which, in my opinion, is the most important one: click-through rate (CTR).  This tells you how many readers actually clicked on one of your actions in your e-mail.

So, now that you have sent off your e-mail campaign, you will simply wait a few days and then go check your reports.  (Some e-mails have a longer shelf-life, but most of your activity will take place in the first 48 hours after the e-mail is delivered.)

Let’s look at a hypothetical example.  Remember you need a clear goal for your campaign so let’s say you are inviting people to sign up for a free seminar (your CTA).

You need to know what the average revenue is that’s generated from these seminars.  How many new customers will you get?  How many products will you sell?  If it’s a new customer, what is the average potential revenue over the lifetime of the customer?

Is it $10?  $100  $1,000?  Let’s imagine that it’s $100.  In this case the total return on the campaign would be $1,600 (16 conversions at $1,000 each).

Now determine what was the cost involved in sending that campaign?  If you spent 6 hours putting it together and your time is worth $150 per hour, your investment was $900.

$1,600 / $900 = a 170% return.

There’s your ROI.

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Check out my new eBook, “The 3 Secrets of Online Marketing Success” which you can download for free at FreeWebMarketingEbook.com.

Listen to this 1-1/2 minute audio clip taken from a recent E-Marketing Workshop I held.  In it I explain how to make sure you are getting the results you desire from your Facebook Business Page.

Listen to the “Facebook ROI Audio Clip” by clicking here.