Did you know that research shows for every $1 invested in email marketing, $44 is earned in return? The reality today is email marketing is essential to grow any business, including businesses operating in or with the cannabis industry.
Once you know how to write email marketing messages that people actually want to read, how to make sure your email messages actually get delivered, and when to send those email messages so the most people will see them, you’re on the right path to using email marketing to increase brand awareness, customer loyalty, sales, word of mouth marketing, and profits.
But there is still one more hurdle you need to get over before you can confidently invest time and money into email marketing. You might be following all of the email marketing best practices, but how do you know 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.
Identifying Your Email Marketing KPIs
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 four 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:
- Number of email messages sent
- Number of those messages that were opened by recipients
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:
- Number of clicks on links in the message you sent
- Number of messages opened by recipients
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:
- Number of people who completed the desired action
- Number of email messages sent
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:
- The amount of money invested in the campaign
- The additional sales generated as a result of the campaign
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).
Your Next Steps to Use Data to Improve Your Cannabis Business’ Email Marketing Results
To measure the performance of your email marketing investments and ensure you’re getting the results you want and need for your cannabis business or ancillary business, you have to use an email marketing tool that gives you access to the right data. Without accurate 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 business grow.
Originally published 2/20/19. Updated 8/23/19.
Susan Gunelius, Lead Analyst for Cannabiz Media and author of Marijuana Licensing Reference Guide: 2017 Edition, is also President & CEO of KeySplash Creative, Inc., a marketing communications company offering, copywriting, content marketing, email marketing, social media marketing, and strategic branding services. She spent the first half of her 25-year career directing marketing programs for AT&T and HSBC. Today, her clients include household brands like Citigroup, Cox Communications, Intuit, and more as well as small businesses around the world. Susan has written 11 marketing-related books, including the highly popular Content Marketing for Dummies, 30-Minute Social Media Marketing, Kick-ass Copywriting in 10 Easy Steps, The Ultimate Guide to Email Marketing, and she is a popular marketing and branding keynote speaker. She is also a Certified Career Coach and Founder and Editor in Chief of Women on Business, an award-winning blog for business women. Susan holds a B.S. in marketing and an M.B.A in management and strategy.