Improving email revenue? I didn’t learn that one in school, and you likely didn’t either. In fact, in four years of journalism school, I never had a single lesson in newspaper economics.
My professors were experienced reporters and editors, but none had really concerned themselves with the business of publishing a newspaper. And none had ever met a paywall.
In order to discover the economics of the publishing industry and to learn the interdependent roles of advertising, production, editorial and circulation, students had to take courses at the university’s business school.
That was many years ago. As I’ve watched the demise of daily newspapers over the years, I’ve wondered how many members of the Fourth Estate have failed Economics 101.
Online publishers are not immune. There’s also an economic loss that many online publishers suffer — needlessly, in most cases. They’re leaving money on the table by not testing.
Here’s what we’ve observed, time and time again—of all the metrics associated with a website, email revenue and performance is the easiest to measure and test.
Writing two versions of an email message and sending out each to half of your database is quite simple. But — stunningly — 95 percent of the publishers we talk to don’t do it!
- Is it that they don’t measure how much email revenue they’re generating on each effort?
- Is it that they don’t believe that testing will improve the results of their program?
- Is it that they don’t know how to format a report that accurately reflects the results of an A/B split test — and the trend over time?
- Is it because their IT folks are in charge of the email, and they don’t understand direct marketing?
- Is it because editors are responsible for the email, and they are concerned only with the quality of the editorial content?
- Is it because they have an irrational “church and state” separation of editors and marketers?
- Is it because they’re testing promotions, but failing to test newsletter templates?
It’s for all of these reasons, and it’s costing some online publishers a fortune. Even our best performing Gold Members—who publish on multiple platforms and have helped define our pricing best practices—will see a drop in subscription sales when they stop testing.
How to increase overall email revenue per thousand by 50 to 150 percent
The two drivers of email newsletter marketing success are (1) the size of the database file, i.e. number of subscribers, and (2) revenue per thousand emails sent. The goal is more subscribers and higher email revenues per campaign.
Online publishers who test and track their results over time all report that testing improves overall performance dramatically — by 50 to 150 percent.
Once they test and measure, publishers swear that A/B splits are one of the most productive uses of their time and resources.
These publishers recognize the reality of being an email newsletter editor. They understand that publishing is a business enterprise.
Email newsletter publishing is about serving the reader and about making a profit.
Using Six Sigma marketing over the course of 12 weeks
Our experience shows that over any given 12 month period, response rates will decline by about 40% for a publisher who keeps the same offer up year after year. As Ogilvy made known, when you stop testing offers and creative, they fatigue. It’s that simple.
So while A/B testing is a great start, those who have already gotten that far can increase email revenue even further by using Six Sigma marketing, where you continually test the offer.
Six Sigma methods are used in direct marketing to test a control against a number of variables. You test each variable against the control in order to declare a winner and this continues until all the variables have been tested. This can take place over the course of a month, or over the course of a year depending on how many variables you have to test.
One of our Gold Members experienced offer fatigue, and in response, we launched a high-frequency Six Sigma email spotlight program focused on selling more magazine subscriptions.
We increased the number of magazine spotlights from the standard 2-3X per week to 5X per week and introduced editorially-driven creative to alternate between offer-driven creative. We saw a 70% increase in their NOPX (new orders per 10K email subscribers) from this program.
Email campaigns are typically planned and measured in month-long cycles, where we identify the best performing spotlights and the worst performing spotlights in a given one-month cycle. We then keep the winners and include them in the next month-long email cycle, and we replaced the 5 losers with brand new creative.
Meanwhile, we continue to test the offer. For example, for this particular Gold Member, we ran one offer for 4 weeks and we ran a different offer for the next 4 weeks. The reason we recommend doing offer testing sequentially is because of the multi-device nature in which our consumers engage with our content.
For example, they may be reading your emails on their phone, but prefer to visit your website on their computers to subscribe to your magazine. In this scenario, we’d want the consumer to be able to find the same offer on your website as they saw in email. This can present a challenge in measuring attribution, but we prefer this approach as it provides a cleaner read on the strength of a particular offer when it’s the only one being promoted across web, email and social.
While this approach is a significant amount of work, requiring active coordination between editorial and marketing, on-the-spot analytics, great copywriting, and interaction with fulfillment to manage the offers, we have seen it work and recommend publishers try it.
Economics is the measurement of any business enterprise. Profitability is the price of survival.
If you’re not the most profitable publisher in your niche, you can expect to be “out-resourced” by a competitor. If your competitor figures out how to run an email program so that it generates $50 per 1,000 names, and you can only generate half that amount, you lose.
Your competitor will have more resources to grow the file, conduct basic research, perform analyses, etc. The result will be a better editorial product that better serves their readers. They win.
With higher profits, you can better serve your readers. With an ever-increasing number of readers, you can reap higher profits.
Are you paying a heavy price for failing to test email newsletter and promotional templates?