Email Thursday – Campaign Revenue Versus Loyalty Revenue

By Nik


Measuring your ROI for an email marketing newsletter can be difficult – but defining the costs is easy. Typically, it simply boils down to the ESP cost of sending to x number of emails that receive the newsletter, and the management costs associate with creating, Qaing and sending the newsletter.

For example, most of our clients would look at their costs for a newsletter as how much did I get charged by Bronto (our ESP partner) for sending out the blast, and how much did Exclusive Concepts charge me for their management of the newsletter. Easy!

When you get a report from your email management company, you’ll get some tracking data that reflects how much revenue was directly tracked to that newsletter. This can be pulled through your ESP, like Bronto, as long as your email marketing company has set up revenue tracking appropriately in your shopping cart. Alternately, if you have the correct URL tracking setup with your emails and have ecommerce tracking setup in your Google Analytics, then you can track the revenue generated by a newsletter in Google Analytics. A third way of tracking revenue is coupons: if you offered a coupon through a particular email, and the coupon ID is unique to that email, then tracking the revenue generated by that email campaign can be as easy as finding out how much revenue was attributed to that coupon ID. Some e-commerce platforms, like Yahoo! Store, make this very easy to do.

But that tracked revenue is “campaign revenue” – what you won’t be able to easily track is “loyalty revenue”. This is the value of having a retention program. There are ways to calculate metrics that will help you measure how your email newsletters are influencing loyalty revenue growth.

1 way is lifetime value calculations. This is easy to calculate, and it should be done periodically. Simply take the revenue you have made in your store over time, and divide it by the number of email addresses you have in your database. If you are doing email marketing the right way, then when you calculate this over time, you should see increases in this metric. What does the metric tell you? Essentially, that your past customers are contributing more and more towards your revenue growth over time. That’s the beauty, and the goal, of a retention program.

Another easy-to-eyeball technique for identifying whether your loyalty revenue is growing is through Analytics. In Google Analytics, you simply do the following:

  1. Timeframe: Open up a timeframe that extend from when you started your email program until the past month – click the “month” tab in the top right to see monthly trends.
  2. Drilldown: Use the left navigation to drill down to the subsection of “Traffic Sources” labeled “keywords”.
  3. Filter: In the “filter keyword” section, choose containing and type in your storename, without the www. If you have more than one word in your store’s name, you need to accommodate for when a person types in a space and when they do not. The format you should follow in the contains box should be as follows: store name|storename – example: this store|thisstore
  4. Tab: At the top of the page, you’ll see a header that says “Keywords” – below it will be a tab that says “visits” – expand that tab. Choose “compare two metrics” – and choose “revenue” as your second metric.

Here, I’ve taken a screenshot of a client of Exclusive Concepts – and have mapped visits for brand search terms against the revenue generated by those keywords. This client engages in weekly email blasts and thoroughly evangelizes its audience through interesting content, exciting promotions and frequently refreshed layouts. We utilize A/B testing to help improve attentiveness, open rates and click thru rates, in addition to revenue generation and conversions. The most aggressive changes started in January of 2011.

This created a dynamic shift in the behavior of a visitor who came to the site by typing the name of the brand. In September of 2010, there were 3,100 visits to the site using brand terms – and this converted into $40k in revenue. By contrast, the number of brand search visits in Sept 2011 only increased to 4,000 (a 29% increase), while the revenue generated by these visits increased to $133,000 – that’s a 233% increase in revenue generated by this group of loyalists. The value per visit went from $13 for this group, to a whopping $33. Clearly, this group has become more and more comfortable shopping on this site.

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