Email marketing response rates – does email still work?

Businesses who are thinking about doing an email marketing campaign are always asking what the typical response rates are and many emarketing companies will tell you how great the response rates are and will tell you that pound for pound email is better than any other type of marketing out there and that compared to most traditional marketing methods that there is no comparison.  But c’mon we all know that when talking to a sales person that you have to take everything that they say with a grain of salt because they are trying to make the sale, close the deal right?  Most companies that you talk to will give you information with impressive numbers such as the DMA reported that email marketing has an ROI of 43 to 1.

So what is the real answer?  What is a typical email marketing response rate? There is not a simple answer to that question because a lot of different factors need to be taken into consideration such the product being marketed and the target market.  As I have talked about in the past the DMA numbers are actually accurate, but the answer is incomplete; their figures are based on an average after a product or service has been through research and development and was sent to a highly targeted and segmented database.  Email responses differ greatly from product to product and from company to company.  I have seen campaigns that have a 12% open rate and another company selling a similar product has a 3% open rate, the open rate on a stock alert may greatly differ from that of an auto dealer ad.

But having a good open rate is not going to guarantee that your campaign is a success, you also have to consider the click to open ratio or the CTOR as it is referred to, which is one of the most important metrics in an email marketing campaign.  The CTOR is the percentage of people who clicked on a link in the ad after opening an email clicking through to the website, now this is particularly important because if you have a high open rate but a low CTOR than you have a problem, this is telling you that the subjects in your email were good enough that people were interested enough to open the email, but then they stopped there, why?  We are going to assume that they did not lose interest in the product from the time they read the subject to the time they opened the email so it is a fairly safe bet to surmise that something about the ad stopped them cold in their tracks and you need to figure out what that was.  Was there too much information in the ad?  Some think that the ad needs to look like a flashy website and tell the reader everything that they need to know about the product in which case there is little reason for them to click thru to the website because everything they needed to know was neatly packaged up for them and put in the email allowing them to make an instant decision and get back to what they were before your email interrupted them.  An email ad is meant to do one thing and one thing only drive traffic to a website, many people seem to think that the purpose of an email ad is to sell a product, and that is false, its only purpose is to drive traffic to a website.  If someone is interested enough to open the email, your ad needs to convince them to click-through to the website and if it doesn’t all the strategies or targeting in the world is not going to fix this.

Many also think that the bigger the campaign is the higher the response and while this is true at times, it is not always the case,  I always suggest to new clients to test before committing to a large campaign.  I advise them to test both an html and text ad to see which gets a better result, because different products work better with different ad types, and testing various subjects is smart to because some work better than others.  Once you have done this compare the analytics and see what worked best. Which had a better open rate? Which had a better click to open ratio?

So going back to the original question was is the average email marketing response rates, as you can see there is no simple answer, and this is not something that a business should just jump into feet first. Email marketing is one of the best direct contact media’s available, but in order to be effective, it needs to be planned carefully.