March 27, 2020
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Research shows that every $1 a business invests in email marketing generates a $44 return. In other words, email marketing is essential to grow any business today, including cannabis businesses and cannabis-related businesses (i.e., ancillary businesses).In order to generate positive results from email marketing, you need to successfully do four things:
If you do all of those things well, you’ll be on the right path to using email marketing to increase brand awareness, customer loyalty, sales, word of mouth marketing, and profits.
Every $1 that a business invests into email marketing generates a $44 return.
However, there is still one more hurdle you need to get over before you can confidently invest time and money into email marketing.You need to learn how to determine if your efforts are working?This is where data becomes critical to your success. You need to track the results of your email marketing investments to ensure they’re helping you meet your goals.But what do you track?The answer to that question depends on your business and your goals. For example, if you send an email marketing message with a goal to drive short-term sales, then you’d need to track message outcomes (i.e., recipient behaviors) and ROI to determine if the investment delivered adequate returns based on sales volume.On the other hand, if you send an email marketing message with a goal to nurture your brand’s relationship with your subscribers and boost engagement, then you might simply need to track the open rate or click-through rate to evaluate the success of your campaign.Therefore, step one in leveraging data to improve your cannabis business’ email marketing results is to determine which key performance indicators (KPIs) you need to track in order to measure your results.
Once you’ve established your message goals, you need to collect the right data. What are the KPIs that you have to track in order to accurately measure your message performance and return on investment (ROI)?Following are some common KPIs that marketers use to evaluate email marketing performance based on different objectives to help you get started.
Open rate is most useful to evaluate subscriber engagement. Are people actually opening your email messages and engaging with your brand by doing so? If not, then you need to review your message subject lines and the name used in the “From” field that recipients see in their email inboxes. Do some testing and see which messages and sender names generate the most opens.Bottom-line, if people aren’t opening your messages, one of two things is happening. Either your messages aren’t being delivered to them or they’re ignoring your messages.To calculate open rate for your email marketing, you need the following data:
You should be able to get this data from your email marketing tool. Once you have the data, you can calculate the open rate by dividing the number of messages opened by the number of messages sent. The result is the percentage of messages that you sent which were opened.What’s considered a good open rate? That varies by industry, so rather than trying to hit some elusive percentage, focus on improving your open rate over time instead.
The clickthrough rate is important for two reasons. First, it tells you whether or not people are engaging with your message and brand beyond simply opening the message. You gain deeper insights when you can track the percentage of people who opened your message and clicked on the links inside of it.When you know which links recipients clicked, you can determine what types of information and content are most interesting to your subscribers, which enables you to segment your list and send more targeted messages to them in the future. Ultimately, your open rate and clickthrough rate should go up when you’re sending highly targeted messages to the right people.Clickthrough rate can also be useful in measuring increases in sales. For example, if you send a marketing message that includes a call to action which encourages recipients to click and buy, you can track how many people clicked on the buy link within your message.To calculate the clickthrough rate, you need the following data:
You should be able to get this information from your email marketing tool. To complete the calculation, just divide the number of clicks on links within a message by the number of messages opened.
Email marketing messages can generate a variety of conversions based on your business goals. For example, you might want to motivate people to download an ebook, sign up for a webinar, or make a purchase. Whatever conversion you want to generate with your email marketing message, you can track how successful your efforts were by calculating the conversion rate.Depending on the type of conversion you’re tracking, you might need to integrate your email marketing tool with your web analytics tool (such as Google Analytics). For example, if you’re tracking completed purchases as your conversion metric, then you’ll need to be able to track each recipient’s path from clicking on the buy link in your email marketing message to completing a purchase on your website.This type of behavioral data is very powerful. If you integrate your email marketing and website tracking, you can collect deep insights about who took action, who completed a purchase, and who didn’t complete the purchase process. This information is extremely useful for future re-engagement and remarketing (e.g., abandoned cart messages) campaigns.To calculate conversion rate, you need the following data:
This data will come from both your email marketing tool and your web analytics tool. Once you have the data, you need to divide the number of people who completed your desired action by the number of emails sent in order to calculate the conversion rate.
You invest a certain amount of money into every email campaign that you develop. The only way to determine if the results of your efforts delivered a profit or loss is to calculate the overall ROI of each campaign.To calculate overall ROI, you need the following data:
You can get this information by accounting for all of your costs and putting mechanisms in place to track where sales are coming from. For example, if you integrate your email marketing and CRM tools as well as your website analytics tool, you should be able to track many of the sales that come in through a specific email campaign.The simplest way to calculate overall ROI is to subtract the amount of money invested into your campaign from the dollar amount of additional sales generated as a result of the campaign, and then, divide that number by the dollar amount invested in the campaign times 100 (be sure to multiple the dollar amount invested in the campaign by 100 before you divide).
In addition to tracking KPIs related to performance and ROI, you should always track your unsubscribe rates. Research shows that on average businesses lose 34% of new subscribers within the first month of when they subscribed.
On average, businesses lose 34% of new email subscribers within the first month they subscribe.
With that in mind, it’s essential that you monitor unsubscribe activity so you can identify drop-off points, revise your campaigns accordingly, and re-engage your highly valuable subscribers.The good news is the same research discovered that winback email campaigns have an average read rate of 20%, which means you could re-engage one out of every five disengaged subscribers.
Your next step is to start tracking your email marketing results and using them to improve. However, in order to measure the performance of your email marketing investments and ensure you’re getting the results you need for your business, you have to use an email marketing tool that gives you access to the right data. Without accurate and easily accessible data, you can’t analyze your email marketing results and make effective business decisions.
If you use the email marketing and CRM tools built into the Cannabiz Media License Database, all of this data (and so much more) is easily accessible to you. Schedule a demo to see how it works and learn how it can help your cannabis business or cannabis-related business grow.
Originally published 2/20/19. Updated 3/27/20.
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