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2017 was a prolific year in email marketing and automation as marketers pushed the boundaries doing things with their email campaigns that even a short time ago we might never have dreamed possible. To continue to blaze new trails and stay ahead of the competition, savvy marketers are demanding greater access to data and behavioral information that allows them to deliver more sophisticated campaigns that don’t require a team of developers, designers and costly cloud platforms to send.
But where will this lead in 2018? What’s next for marketers who need to answer consumers cry for 1:1 communication in a mass communication world? How do marketers tackle a funnel that is no longer neat, linear path? How do predictive metrics shape the KPIs that define success?
On February 28th at 10am PT/1pm ET, join Campaign Monitor as we discuss how email marketing will change in 2018 and how you can set yourself up for success. During this webinar, you’ll learn:
Good morning, everyone, and thank you for joining us this morning. I’m Samantha Anderl, the Head of Marketing here at Campaign Monitor. And I want to thank you for joining us today for our webinar on 6 Email Trends to Watch in 2018. We’re very excited to dig in to some very big changes that you’ll start to see have a huge impact on how you approach email marketing, and your marketing strategy as a whole.
As you’ll notice from our agenda today, we’ll start off with a brief intro covering some interesting email marketing stats from this past year, and then dive into some overarching changes and some specific trends you will start to see influence the way that you do marketing. But before we get started, there are just a few housekeeping items I’d like to cover. One, we are recording this session, and the recorded version of the webinar will be sent out within the next 24 to 48 hours. So if you can’t stay for the entire presentation, no worries. You’ll have access to the recording to watch at your convenience. Also, we will be saving some time for questions at the end, so please use the live chat window in the bottom right-hand corner to submit questions as they come up, and we’ll do our best to get to as many as we can.
If we don’t have a chance to answer your question during the live Q&A period of the webinar, we will follow up with you directly via email because we want to make sure we can answer all the questions that you may have. So, without further ado, let’s go ahead and dive right in.
For whatever reason, the thought that email is dying or that email is dead has spread, and it couldn’t be more wrong. Email has become an integral way we communicate in both our professional and personal lives. Let’s take a look at some numbers here. Two hundred and twenty-five point three billion. That is the number of emails sent and received per day in 2017. That’s roughly 149,000 emails being sent every minute, and that number has been growing steadily every single year.
The total number sent and received has been growing steadily by about 5% year over year. And when broken down between business emails and consumer emails, the number of business emails being sent each year is growing by about 3%, while the number of consumer emails being sent every year are growing by about 6%. The number of daily emails being sent in 2018 is expected to pass 235.6 billion, and then in 2019, 246.5 billion.
Eighty-eight percent. Eighty-eight percent represents the number of people that check their email from their smartphone. We spend six hours per day checking email and has become something that we do almost everywhere. It’s not just in front of your computer or when you’re at work. According to a survey from Adobe, 50% of people check their email while resting in bed. Fifty percent of people check their email while on vacation, whether that’s at the beach or the pool, at breakfast. Seventy percent of people check their email while watching TV, and yes, even 42% of people check their email while in the bathroom.
So going back to email is dead. Email is not dying, but email is changing, and it’s evolving. The number of email users is growing. The number of accounts is growing and the number of messages being sent every single day, they’re all growing. The way that we interact with those messages is changing, though. And this presents a lot of new and exciting challenges for marketers. Email changed a ton in 2017. Automation enabled marketers to push the boundaries of what they were doing with their email campaigns, that even a short time ago we might never have dreamed possible. The demand for data continued to grow so marketers could build sophisticated campaigns to increase customer engagement. And these are just a couple of examples that only scratch the surface. So, that’s what happened in 2017, but what’s gonna happen in 2018?
Let’s start with our first prediction. Every marketer has seen what the traditional funnel looks like. Leads come in at the top of the funnel during the awareness stage, then they move down a very linear path through engagement, then into discovery, consideration, and ultimately, someone makes a purchase and becomes a customer. Everything goes very smoothly because you provide the right content at the right stage, and your leads respond to it exactly as you hoped because that is how the funnel is built and that’s how it’s supposed to function. But this is almost never the case. And if you happen to be a lucky person that gets these leads into your system, you know that these make up a very small percentage of your overall lead pool. If you’re still using this funnel and building your marketing strategy around it, stop right now.
Enter the new marketing funnel. In this model, leads can enter at any stage, bypassing the traditional top-of-the-funnel stages because this is how a vast majority of the leads will behave. Some of your leads might find a great, new white paper that you just published and that might get the conversation started. Or, they might realize they have two weeks before the end of their fiscal year, and they have to get a new tool in place ASAP, so maybe they call you directly. Every stage is fair game. But your job as a marketer doesn’t end once they convert and become a paying customer. As hard as it is to get them to that stage, that’s not where your job ends. You now have to shift your mindset from just acquiring new customers to building relationships, relationships that keep customers coming back and relationships that maximize their lifetime value.
And how do you build those relationships? You have to have unique, personalized experiences ready for all stages in the funnel. Some examples of this can include nurture strings for specific opportunity types. Is this person a brand new customer? Are they a renewal that we’re trying to secure? These different opportunities will have different priorities. What content do you have to support each opportunity type? And what about your onboarding programs? What actions are they taking within your product? What actions do you need them to take, and what should the next steps be on how you guide them to take these actions?
Another example, cross-sell and upsell programs. Do you have multiple products that you sell? What are the benefits? What is the value you can present to your customer to help encourage that purchase? What does that look like? There are a lot of different ways you can approach these journeys and building this content out. But on the screen, you can see a couple of example emails that we send when account sign-ups go through our onboarding journey. The first step in our journey to building an automated onboarding series was to take a look at what emails already existed and generally how people moved through our application from sign-up to sending their first campaign, all the way through to becoming a paying customer.
We actually found big drop-offs took place after people signed up, but before they created their first campaign, as well as after creating their first campaign, but before uploading a list. This data really helped us see where people were dropping out of the process, but we still didn’t have a good understanding of why they were dropping out. So, to figure this out, we scoured support tickets, we browsed responses to the previous feedback email, we set up conversations with people who dropped at each stage until we found trends and why people were leaving. We then used these data points and insights to create an outline of the content we needed to send people during each stage. There was different content in each stage after sign up that helped them progress through to becoming paying customers.
Onto trend two. Marketers will own the multichannel experience like never before. Marketers, traditionally, have focused primarily on acquisition. They have neglected the other stages of the customer lifecycle. That’s going to change, and marketers are going to be held more accountable than ever for each interaction and each customer touch point, both pre and post purchase. According to a survey from the Clutch and RTi, the average enterprise uses eight different marketing channels, could include email, social, direct, display ads, SEM, events, and countless others. Marketers now need to strategize and optimize how they’re using each of these channels to support each other across the customer lifecycle.
It also takes anywhere from 7 to 13 marketing touches to generate a quality sales lead. Think about that. Seven to 13 marketing touches just to generate a qualified lead. With all these possible touch points across all of these digital channels, it’s really important to make sure these channels are working well together.
Two stages we’d like to call out that marketers really need to focus on, retention and advocacy. Retention is exactly what it sounds like. The act of getting customers to come back again, and again, and again. It’s a tactic that focuses on building a relationship with your customer, showing them that you understand their needs, and reminding them why they chose to purchase from you in the first place. It’s also one of the most cost-effective ways of growing your business. According to Invest, it’s seven times more expensive to acquire a new customer versus retaining a current one. And 56% of respondents listed email marketing as the most effective digital channel for customer retention. Here, you can see the example on the left from Jaybird, a company that sells wireless headphones. Jaybird sends its loyal customers an email to download a free music app.
The purpose of this email isn’t to sell them, it isn’t even to upsell them, but it’s to provide something extra for loyal customers so that they’ll see Jaybird as more than just a headphone provider and build a real relationship with that brand. The other stage we’d like to call out is advocacy, making happy customers that are willing to advocate on your behalf. Referrals like these carry a ton of weight in the marketplace. When was the last time that you saw a movie without checking out the reviews for it? Or the last time you went to a restaurant without checking out their Yelp page? And these, you know, Yelp, IMDb, these are reviews and referrals from people you don’t even know.
Now, imagine they came from someone you really trusted. That’s a super valuable thing. According to Influitive, B2B companies with referrals has 70% higher conversion rates, and a 69% faster sales to close time. On the right, you can see an example from MINDBODY when a customer hits a milestone. It’s a simple Thank You note from the CEO without any product pitches or links. This type of email reminds customers that they’re valued by the brand. They’re valued by the brand. They’re valued by the CEO, and it’s nothing more than a simple “thank you.” You’ll be doing yourself a huge disservice by not building out these programs as part of your overall marketing strategy, which leads us to the next trend.
Trend three. Email targeting will become turbocharged. Relevance is paramount in all marketing efforts. Why would somebody engage if they didn’t find the offer or content interesting to them? Mass emails right now account for 95% of emails sent, but account for less than half of email-attributed revenue. Emails cannot be viewed as a “set it and forget it” program. It needs to be a “review and improve” program. You need to constantly be testing to find out what engages best with your audience since there is not a one-size-fits-all approach. Email strategies have been evolving and so have the actual technologies themselves, and that leads to some exciting new ways that marketers can leverage in their email campaigns.
Each person that engages with your brand takes a unique journey with how they navigate your website, consume your content, interact with your social media. Savvy marketers are collecting all of this data and are building unique email journeys to support these prospects. One of the ways you can do this is through behavioral segmentation. Behavioral segmentation is grouping your audience in a strategic manner based on the actions they take with your various digital properties. A couple of examples of this can include particular pieces of content they have downloaded, customers that have reached a certain lifetime value, or just the way that they have interacted with different pages on your website. Maybe they’ve clicked a CTA here, or clicked a CTA there.
According to DMA, over 75% of email revenue is generated by triggered campaigns, versus one-size-fits-all campaigns. And according to Experian, triggered emails have eight times more opens and clicks than any other type of email and generates six times more revenue, six times more revenue.
A brand that absolutely kills it when it comes to behavioral segmentation is Canadian travel company, Flight Center. Their team compiles data from their email, social properties, website, and back-end systems all into Campaign Monitor. With that data, Flight Center creates highly targeted segments for their Club Red newsletter. All this is based on customer interest, behavior, and engagement with their marketing properties. Then, using those segments, Flight Center triggers automated customer journeys with personalized vacation offers to incent higher bookings.
By combining all these behavioral data points, they segment their list in several ways. One segment is for Club Red Cruise containing subscribers who indicate they are more cruise enthusiasts. Another is Club Red Luxury which contains subscribers whose behavior in previous spend indicates an interest in luxury travel. They even segment out their millennial subscribers to engage them with travel tips and ideas, all of which point to Flight Center’s social channels.
Each of these segments will then combine relevant demographic data to provide each recipient an offer that is personalized and is more likely to encourage a conversion. Club Red subscribers contribute about 20% of Flight Center’s total sales, which is powerful and shows the effectiveness of the personalized approach that Flight Center takes to their email program.
Trend number four. The journey to a one-to-one personalization is on. Email marketing has been a pioneer of modern marketing personalization. The ability to craft individualized experiences at scale has given email marketing huge leads when it comes to personalization. Data is the fuel to drive these efforts and marketers are now collecting more data than ever before. The best marketers are the people that can take that data they are gathering and create the unique experiences that get their audience to engage. The number one reason people unsubscribe from emails is because they don’t find the offers or messages relevant to them. And with the resources at an email marketer’s disposal today, that should never happen.
According to Monetate, marketers reported a 20% increase in sales when they provided their audience with personalized web experiences. From our own research, email campaigns that are personalized are 26% more likely to be opened. Twenty-six percent more likely to just have someone click into your email by making it personalized. Here are a couple of examples of dynamic images that were used to personalize email campaigns. The first one on the left is actually a test that we ran here at Campaign Monitor. We had the images dynamically change based on a subscriber’s individual location, and we created different images for people in the UK, people in the U.S.A., and people in Australia, and tested them against a generic location, agnostic image. The results?
By making the images personalized to a location, we were able to increase the click-through rate by 29%. The dynamic content you see on the right is an example of something Adidas did in their email campaigns for their original series. They switched the products being promoted based on the subscriber’s gender. Promoting products that they felt would be most relevant and appealing to encourage that audience to make a purchase. And that might seem simple, but personalization even at this level can be extremely powerful.
Reporting on your efforts. As a marketer, tracking all your efforts can often be a challenge. You probably have a whole list of other things to do and not enough time and probably not enough resources to do them. And reporting is usually one of those things that is a painful exercise already. But, there’s also no denying, it’s the most important part of your marketing strategy to focus on. If you don’t know which activities are driving results and which are not driving results, how are you supposed to optimize? What decisions are you able to make without data?
We’re collecting more and better data than ever before, and the sophisticated marketers among us are digging into those numbers at a deeper level and going beyond the top level metrics, which we’re all used to seeing. It’s obviously a lot easier said than done and it takes some very complex models, but we’re now able to break them down into simple and actionable takeaways, and we see a couple of really big trends with how reporting will change in 2018 and beyond.
Right now, marketers focus on campaigns, and that can be seen in how reporting is structured and measured. Even then, a campaign means a lot of different things to a lot of different people. You run any dimension campaign and some common questions you want to answer are, how many leads did this campaign generate? How many NQLs? How many sales qualified leads did we get? What was the campaign contribution to pipeline? What revenue can we attribute to this specific campaign? There are a lot of reasons why campaign metrics are more widely used, one being they’re a lot easier to calculate. But, marketers need to move beyond these campaign-specific metrics and start looking at customer lifetime value.
Predictive customer lifetime value measures types of actual insights that are current to help marketers make better, informed, data-driven decisions that contribute to increased revenue. Insight such as which group of subscribers, and what attributes will be the most profitable over a specific time period? Which acquisition budget earns the highest ROI? And which customer attributes assist in driving increased lifetime value? Just like a marketer’s job doesn’t end once a lead becomes a customer, reporting in measurement doesn’t stop there either.
While customer lifetime value is a good metric to track, there are a couple of caveats that make it more challenging metric to work with. First, you need several metrics in order to calculate it. Your basic lifetime value will be your average revenue per user or your ARPU, divided by your revenue or customer churn rates. Each unit within this metric requires additional tracking or calculations. Second, you need a large sample size for the calculation to be meaningful. With a lower revenue number or a small customer accountant, this statistical power of the model is lessened.
Third. Most people calculate it with only historical data which is fine. And while this provides value and insight into what has already occurred, it doesn’t provide any insight into the potential value of new subscribers or new customers. As machine learning and AI become improved and more widely-used, marketers can start to track metrics like predictive customer lifetime value. Predictive customer lifetime value will offer marketers insights like, which acquisition budget earns the highest ROI maybe over five years? Which customer attributes assist in driving increased lifetime value? Which subscriber attributes will be the most profitable over a specific time period? Do we need our subscribers and our customers to take certain actions for them to stick with us? What are those actions?
All right, guys. That takes us to the Q&A portion of the webinar. So we have had a ton of questions during the webinar. And we’re not gonna be able to get to them all. Like we said earlier, if we don’t get to your question, we’ll definitely follow up with you afterwards. But let’s go ahead and dive in here. So, first question, “With these trends and changes in mind, what strategic changes should I focus on making first, so where should they start?” And that’s a great question. But with everyone having very unique situations, it’s going to depend. You’ll have to take a look at the areas of your marketing that you can see are lacking of it, or consider your overall strategic goals as a business.
And you’ll notice that some of these changes will influence other areas as well. For example, let’s say your biggest issue is that your overall email engagement is low. Using both behavioral segmentation and content personalization can influence that metric. You’ll definitely see things like your open rates, your click-through rates, and even conversion rates change by implementing both of these. So I’d recommend overall that you take a look at your overall strategy, prioritize your goals, pick one or two changes that you want to try out, test those changes, and then optimize moving forward once you get some data that you can leverage.
Let’s see another question here. What are some other ways we can start using predictive approaches in our email marketing? Okay. So something about predictive that we did not cover today. That’s a great question. Let’s see. A very effective approach I’d recommend you look into is the development of a regression model. As simply as I can, a regression model will help you uncover patterns using multiple variables in historical email campaigns, so you can optimize them for a single variable in a future campaign. Okay. Let’s break that down into an example.
Let’s say you want to optimize the click-through rate campaign or the click-through rate for a future campaign. You can look at variables from historic campaigns, things like subject line, the use of images, what time of day it was sent, and measure the influences these had on the click-through rates for those given campaigns, and then apply that data moving forward. So taking that even deeper into an example, a really interesting scenario when this was done really well was when Target developed their regression model where they looked at a customer’s purchase history at various points, and then analyzed that data to determine if the customer was pregnant or not. So they looked at what the customer was buying, maybe it was bottles, maybe it was baby onesies, maybe it was diapers. They looked at over what period of time they were buying those items to figure out if they were pregnant or not. So while this is not the simplest model to implement, a regression model, if done and applied correctly, can have huge benefits.
All right. Let’s see. Next question here. “What behavioral and personalization techniques have you found to be the most effective?” Okay. This is another really great question. And I will honestly say that the most effective approach is to actually combine them when you can. And a common use case for this is for online retailers or e-commerce businesses. You can track and look at a customer’s recent purchase or browsing history and weave that into your emails. Then you can use that information for a cross-sell, for upsell, or even just future product recommendations.
I actually read an interesting article recently that said something like 35% of Amazon’s revenue is generated from their recommendation engine. They know what their customers are currently looking at, what they’ve previously purchased, and can serve up super-targeted content based on what other products they might purchase. This creates a long-term relationship and increases the lifetime value of that customer.
All right. It looks like we’re about out of time. So, yep, that’s all the time we have this morning. I just want to thank you all for taking the time out of your day to join us and listen. I hope you found everything to be valuable and I hope you have some new ideas that you can take back to your own business that you can test out and start using in your email marketing, and even in other marketing channels. If we didn’t have a chance to answer your question during this Q&A, we have all this recorded, all the questions recorded, and we’ll be able to follow up with you in a one-on-one email with an answer in the next couple of days.
And, just to note again, the recording of this session will be sent out in the next 24 to 48 hours, so please be on the lookout for that. Again, guys, thanks for tuning in with me. I’m Samantha Anderl and thank you again for joining us, and I hope you guys all enjoy the rest of your day. Bye, everyone.
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