How to Protect Your Email Revenue in 2023
- December 12, 2022
- Email Delivery, Salesforce Ben | The Drip
The world of email marketing today is being influenced by a number of factors that have cropped up in the past year or so: email volume doubled during the Covid pandemic, the extended peak sale season is making marketers fight for a slice of the pie, Apple Mail Privacy Protection (MPP), and changes to consumer spending in the face of an economic downturn.
Make no mistake, email continues to be a highly popular channel with both senders and recipients. Protecting the revenue from email doesn’t start and end with email; to solve the challenges we are being faced with, we need to extend our outlook ‘upstream’ to website experiences and data capture, and ‘downstream’ to activity data and marketing attribution.
This talk was presented alongside Guy Hanson at the B2B Marketing Expo, London, in November 2022. Having both observed a lot over the past year, the result was a winding and far-reaching conversation.
The World of Email Marketing Today
Let’s first set the scene for what the world of email marketing looks like today. We’ve been facing plenty of challenges over the last 12+ months.
The DMA (Data and Marketing Association) produces a consumer-focused piece of research each year: “How to Win Loyalty and Trust”.
Email marketing is a channel that remains highly popular. When asked for their opinion on all the marketing touch points that they’re exposed to, email was their preferred method of receiving marketing messaging. There are two main reasons email scored highly:
- Relevance: The messaging that they receive through the channel is meaningful.
- Trusted: Email trust builds solid relationships between brands and customers – a two way conversation. Message types they specifically like to receive include discounts, post-purchase information.
This is why effective email marketing has become more difficult over time – a victim of its own success as a channel.
1. Email Volume Doubled
During the Covid pandemic, global volumes of permission-based marketing emails nearly doubled – much of which happened almost overnight when lockdown was enforced. Total volumes from March 2020 to April 2020 increased by approx. 60%.
We wondered, is this going to be temporary – a high water mark that volumes are going to sink back down from?
The answer was no. Volumes have continued to increase by another 15% this year alone.
Look at the two boxes which highlight the most recent activity over the last couple of months (right), contrasted with the Black Friday/Cyber Monday period last year (left). Recent email activity is already at a level similar to last year’s, ahead of Black Friday/Cyber Monday.
Sure, this is good for us email marketers – however, it also creates a huge challenge because more volume means vying for subscribers’ time. It’s also possible that your customers respond negatively – more spam complaints, opt-outs, deleted emails.
2. Extended Peak Sale Season
Not only has the overall volume increased, but this high level has been sustained. We can confidently say that email “peak season” is extending. The peak season used to start with Black Friday/ Cyber Monday and typically ran through until Christmas/New Year, even into the New Year sales.
What was once a peak six-week season is increasing in scope, every year. Black Friday has become Black November, and Cyber Monday has become Cyber Week. Suddenly, there are new events, such as Blue Monday in mid-January. Before you know it, it’s Valentine’s day. That’s a peak season of three and a half months. Are subscribers engaged, and reacting positively, to your emails over this longer period of time?
An increase in overall email sending volumes + extended peak season = safe to say, deliverability is getting ever more challenging.
3. Apple Mail Privacy Protection (MPP)
The “new kid on the block” in terms of challenges is Apple Mail Privacy Protection (MPP), introduced in September 2021.
Many organizations monitor their performance on a 12-month rolling average and now see the impact MPP has had on email deliverability. By degrading open rate, it’s harder to maintain best practices, such as, recency management and list quality.
When we say ‘deliverability’, we’re referring to inbox placement rates. So not just was your email successfully delivered and accepted by the receiving mailbox provider, but what happened to it next? Did it land in the Inbox, where your customers are going see it, or has it gone to the spam folder?
Validity’s global inbox placement rates benchmarking shows Gmail and Microsoft inbox placement rates are all well up in the 80% region. Apple is down to 69% – and decreasing.
This tells us a story. Apple’s postmaster guidelines for determining responsible vendors are exactly the same as the other providers. So, ensure you have your infrastructure in place – good list quality, use permission-based marketing, etc.
4. Consumer Spending Habits
It’s getting tougher out there with current economic conditions looking bleak. Email subscribers are having to become more discerning in where they’re going to spend.
Inevitably, this impacts how they’ll respond to email marketing, particularly in higher value sectors. Statistics from Validity’s MailCharts solution looks at discounting strategies for the jewelry sector. Two trends to note:
- The percentage of marketing emails sent by jewelry vendors that include a discount offer has increased year on year. They’re having to fight harder for their customers’ dollars.
- Previously, those discounts used to be typically 10, 20, 30%.There’s been a significant jump to much deeper discounts in the last year.
The DMA report proves that consumers have been starting to clutch their wallets tighter in response to the recession. Consumers’ willingness to spend on certain activities have already been impacted, such as eating out or drinking at pubs or bars. Interestingly, some sectors are more recession-proof – media subscriptions, and even holidays, have been less impacted so far.
Only two out of five respondents are saying “we’re still feeling comfortable, we’ll ride this out”. The remainder are saying they’re feeling the pinch to some degree; this is going to be reflected in the way that they respond to marketing that they receive.
Is Loyalty “On Hold”?
Loyalty is “on hold” was a statement made by the DMA (source). After the hard work that marketing programs have done to build loyalty with their customers, has it been all for nothing when customers are suddenly confronted with decisions – to buy this, or that? How can marketers loyalty-proof their programs in a way that they haven’t necessarily before?
Conversion rates from online advertising and websites have already dropped. As Neil Patel pointed out, YouTube’s revenue decreased by 2% in Alphabet’s (parent company of Google and YouTube) latest earnings call. Meta’s average revenue per user has taken a downward turn ($9.41 vs $9.83).
Could the reason be due to the commitment the customer is being asked to make in the CTA (call to action)? There are other types of conversion points that don’t ask for as great a commitment – so, perhaps we take a ‘leaf’ out of B2B marketing’s book and look to nurture customers rather than asking for commitment up front.
There’s also the case of retention versus acquisition. Do you know the 20% of your database that’s going to deliver 80% of the value? I see similarities in the exercise we all had to do when GDPR was approaching as we move into this new period of economic constraints. Back then we had to eliminate data that doesn’t comply with the regulation – and as a result of enforcing established best practices into law, email programs started to perform better.
We’re being tasked to less with more so more with less. So, it’s time to focus on quality contacts.
The way we design and build loyalty mechanisms doesn’t have to be sacrificed completely. There are cheaper ‘challenger’ options coming onto the market. Take for example, Salesforce Loyalty Management – it’s expensive. I recently saw a demo of an app that can plug into Marketing Cloud to deliver vouchers, at a very competitive price point. So that there are other options to explore.
Budget for New Marketing “Toys”?
With tightening marketing budgets, you may be rolling your eyes when I recommend new technologies to invest in. There are tools that are going to take a lot of legwork from you, such as continually identifying the loyalists in your subscriber base.
However, there’s so much wastage in marketing. Eliminate wastage, and you can free up time and budget. It’s an ideal time to optimize marketing operations.
I believe in the saying: you have to spend money to make money. But is is equally as important to balance between improving operations with technology with grabbing the ‘shiny new toys’.
Examples that come to mind are AI for marketing, Web3, CDP.
AI for Marketing
Artificial intelligence (AI) has become democratized, with more organizations able to adopt the technologies (non-technical individuals) and more use cases catered for.
Looking at Salesforce AI, there are 50+ ‘Einstein’ products and features across the whole platform, with 17 applicable to marketing. These include subject line optimization, content block selection, and send time optimization.
When it comes to AI, always be aware of what data the AI models are actually using behind the scenes. It’s nice to have a shiny new dashboard, but what data has been considered, and which trends are being reinforced?
Take send time optimization, for example. Treat the technology with some skepticism, as certain behavioral trends can be continually reinforced; sending at the time that send time optimization recommends will inevitably show that subscribers are engaging with emails during that period. Without data to compare other send times, the model won’t recommend other periods.
Web3
Web3, specifically NFTs, controversial as they may be, could be a cutting-edge way to continue building loyalty with your champion subscribers.
I was surprised at the findings published in the Salesforce State of Marketing report (2022). When market leaders across the world were asked about their current/future Web3 strategies, the uptake is split down the middle between those who have an active Web3 strategy (51%) and those who plan to in the future (46%). What’s striking to me, is that only 3% don’t plan to have a Web3 strategy. 2023 is going to be an interesting year for Web3, that’s for sure.
CDP
CDPs (customer data platforms) handle identity resolution, in other words, unifying versions of the same individual across applications, including data sources beyond Salesforce.
CDP is a really hot area in Salesforce. Salesforce Genie was announced at Dreamforce ‘22, which ingests and stores real-time data streams at massive scale, and combines it with Salesforce data. This paves the way for highly personalized customer experiences, delivered in real-time.
Salesforce painted a vision where CDP reaches across the whole product portfolio – so, sales and service have all become use cases for CDP. In other words, CDP is no longer just about marketing; there’s a greater scope, which will support when building a business case.
Let’s Collect More First-Party Data
In the past year, we’ve heard that we need to collect more first-party data. With the emphasis on privacy, and the demise of third-party cookies, first-party data (which your own organization collects) will be the only viable way to collect data.
The increasing popularity of CDP could help to solve the challenge. You need to be savvier with the data you collect (profile unification) and have somewhere to store it. Coming from multiple different sources, first-party data isn’t always structured in the way you need it in order to work with it.
First-party data has become a buzzword – but collecting first-party data is not that simple.
Do you have a plan of action for the future? I sat at a roundtable mid-way through the year, and one question posed was: “How are you adapting your data strategies to future-proof your data collection?” There was silence around the table. 68% of marketers have a fully defined strategy to shift toward first-party data (source).
I think it’s hard to pinpoint the actions you should take in the context of your organization, and none are going to happen overnight. There are actions that you can take, such as, incentivizing data collection, creating a first-party data strategy, etc. The Salesforce “State of Marketing” report lists five, each hovering about 50% in terms of adoption.
Salesforce describes this as “walking the ‘personalization vs. privacy’ tightrope”. What are the trade-offs, between one to the other?
Downstream Impacts On Segmentation?
One trade-off we could end up making in favor of privacy, is the amount of data we can use for email marketing segmentation.
Be realistic about the gaps in data that you used to collect, and plan ways to mitigate those gaps, for example, adapting your segmentation criteria.
Authenticated Web Experiences
I heard a great quote recently: “No excellent web experience is unauthenticated”. Authenticated web experiences can be a great way to ensure that you’re achieving a balance between privacy and personalization – privacy, as they are logging into a trusted environment, and personalization, as they are interacting with the experience, generating activity data, and/or submitting data.
To protect segmentation, and email personalization, I think it starts with web experiences.
The Death of the Webform
Sourcing first-party data has, for the most part, been done using webforms. Consumer psychology is trending towards either not wanting to go to the effort of filling out forms, and at the extreme end of the scale, have become suspicious of them (“I’m going to get a call from a salesperson in the next 5 minutes”).
Is it time for the death of the webform? Conversational marketing, also known as chatbots, give the option for visitors to engage in a two-way conversation. Depending on the query, they can self-serve, or get more immediate answers for complex queries requiring the human touch.
Adapting Marketing Attribution
A large part of protecting email revenue is being able to measure whether marketing has been successful in generating closed won revenue.
This is known as attribution, the exercise of associating email activity to CRM opportunities. Bringing the data together connects the dots, proving marketing influenced pipeline.
- Apple MPP has taken away a widely used measurement metric – email opens – for email marketers. Thank goodness email open rate is no longer reliable because it was always a vanity metric. This puts more accountability on us to create compelling email copy that generates clicks.
So yes, email opens can no longer be a reliable metric for campaign attribution. Organizations use automations to trigger the campaign attribution when a subscriber takes an action. How do you weed out all the automations, based on email opens, from your marketing automation platform? Pardot (Account Engagement), for example, introduced an email open audit tool that scans your whole account, and pinpoints where automations are using email open as a trigger. You can imagine how long it would take to sift through all your email journeys to amend them.
- The depreciation of third-party cookies has made first-party activity tracking key. However, first-party tracking could mean that automations don’t fire as expected in some circumstances. In the case with Pardot (Account Engagement), the subscriber must be interacting with the email on the same device they have been cookied on, or some automations won’t fire. This has the potential to cause gaps in your campaign attribution.
- Extensibility is all about getting more mileage out of one’s tech stack. Effective integration irons out inefficiencies – aggregating data from multiple sources faster and optimally, reducing manual work, and more. Again, Pardot (Account Engagement), Marketing App Extensions, External Actions, and External Activities work together to ‘speak with’ third-party platforms in a low-code way. This is a fantastic example of how attribution is evolving to take in new data points – in other words, bringing in additional activity data to help prove marketing influence.
Finding Customer Feedback
In trying times, we should identify the champions in our customer base – as we mentioned earlier.
A tried and tested method is NPS (net promoter score) surveys. It involves just one simple question: “How likely are you to recommend us to a friend/colleague, on a scale of 1 to 10?” You will reveal your loyalists (the 20% that will deliver 80% of the value), and note the detractors.
Plus, you don’t have to buy another tool. You can run an NPS survey within your current marketing automation platform; at the end of the day, it’s 10 links behind 10 images. If you really want to ask more questions, redirect them to a form – and to not contradict our point on the ‘death of the webform’, you can use an engaging form experience, such as Typeform, which reveals one question at a time.
Sure, you can monitor subscriber activity, you can report on their response rates – but actually there is no substitute for asking them directly.
Guy reflected on his experience judging the DMA email category. Multiple submissions sought to prove the uplift in email performance using customer feedback as evidence. Gathering feedback is certainly starting to become more popular.
The Value of An Email Address
An email address in your list is a value, a dollar value. In an ideal world, it would appear as an item on your company’s balance sheet to illustrate how important email data is.
In fact, the DMA calculated that an email address is worth around £35, in terms of the average amount subscribers are likely to spend with your business, over time.
A rhetorical question: how much is an email address worth to your business? Of course, there will be a different value on your top 20% vs the remainder. We think it would be a very interesting exercise to calculate this against your customer lifetime value.
We don’t talk about it enough, this important data point that could help secure budget, and justify the existence of your email programs.
Summary
Make no mistake, email continues to be a highly popular channel with both senders and recipients. Protecting the revenue from email doesn’t start and end with email; to solve the challenges we are being faced with, we need to extend our outlook ‘upstream’ to website experiences and data capture, and ‘downstream’ to activity data and marketing attribution.
- Loyalty isn’t necessarily “on hold”, but we need to be approaching loyalty in different ways, working harder to gain it from subscribers.
- The shift towards first-party data will have an impact on the segmentation that drives email audiences.
- Measurement challenges are increasing in number – threatening gaps in our campaign attribution.
- An email address in your list is a value, a dollar value. How much is an email address worth to your business?
This Pardot article written by:
Salesforce Ben | The Drip
Lucy Mazalon is the Head Editor & Operations Director at Salesforceben.com, Founder of THE DRIP and Salesforce Marketing Champion 2020.
Original Pardot Article: https://www.salesforceben.com/the-drip/how-to-protect-your-email-revenue-in-2023/
Find more great Pardot articles at www.salesforceben.com/the-drip/
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This Pardot article written by:
Salesforce Ben | The Drip
Lucy Mazalon is the Head Editor & Operations Director at Salesforceben.com, Founder of THE DRIP and Salesforce Marketing Champion 2020.
Original Pardot Article: https://www.salesforceben.com/the-drip/how-to-protect-your-email-revenue-in-2023/
Find more great Pardot articles at www.salesforceben.com/the-drip/