Introducing Open Reach: Better, But It Wont Work For Everybody

 

I recently co-authored a paper with Katy Pay, Dela Quist and Tim Watson which we then presented at the Email Evolution Conference in Miami. The basic premise of the paper is that focusing on open and click through rates leads marketers to the wrong decisions.

We reviewed data from a number of different email marketing programs and found a strong correlation between the number of unique opens over time and revenue.

Put more simply, the more people who opened at least one email, the more money these companies made.

Here’s an overview:

This in and of itself is not shocking. The notion that more people opening generates more sales is pretty obvious.

Seemingly as obvious is the notion that if one open is good, then more than one open per person is better – and it is.

Stages of engagement chart

Stages of engagement in email marketing

Somewhat surprisingly however, was that more than one open per person was not as good as the first open on the margin.

What we proved is that like most things, there is a decreasing marginal utility to opens. So the paper concludes that the thing to focus on is this measure of unique opens over time.

This new metric is called open reach and is calculated as the total number of unique opens over a fixed period of time and is expressed as a rate of the mailable population.

The problem is that open reach does not work in all situations.

The data that was used for the paper came from a number of clients that have similar traits.

Open Reach Discussion Paper Cover

Click to Download the ‘Open Reach’ Email Marketing Metrics Discussion Paper

First, their email cadence is both regular and frequent.

Secondly, the purchase frequency for their products is also regular and relatively frequent and the purchase is primarily price driven. If you sell a product that is sold infrequently, at irregular intervals, and is feature-rich or highly ego-involving, this metric will probably not work for you.

If you fall into this category, the important take away for you is that it is important to look deeper than your campaign metrics of open and click through rate. It is better to focus on metrics that measure the effective use of your recipient base.

Over the next few months, we will be looking at client data in some of these other sectors and introducing other metrics that are better predictors of email marketing effectiveness for those situations.

Please let us know if you would like to be part of our analysis – we’re inviting comments and thoughts, just tweet @SkipFidura or comment below. Feel free to circle me on Google+, too