Setting website goals – part 2
Vlad and Gus, forensic web analysts from the Web Detective Agency, are reviewing the performance of one of their clients’ email marketing campaigns.
Gus: Their results just get better and better. Open rates are up, clickthrough rates up and so is the number of orders generated from each email.
Vlad: They have spent a lot of effort on testing different subject lines, offers and creatives. It’s starting to really pay off for them.
Gus: And who suggested they do this?
Vlad: Alright, Gus.
Seriously, you have really helped these guys. Without your advice and also encouragement they would still be complaining about how they never seem to make any money from their emails.
Gus: Well, if you are giving each other pats on the back, you need one for increasing the numbers of emails that actually got delivered. The work you did on checking the emails wouldn’t be caught by spam filters and checking that their email server hadn’t been blacklisted with ISPs made a massive difference as well.
Vlad: I just assumed that they were doing this already. Just commonsense really.
Gus: What it means is that each email sent is now generating 15 cents instead of the 5 cents we started with. Given that, I am surprised how relaxed Luca is about recruiting new subscribers to their email newsletter.
Vlad: Each subscriber clearly has a value, and yet he;s not very aggressive about adding new email addresses.
Gus: How could we demonstrate to him that he needs to get serious about recruiting more subscribers?
Vlad: I think the first thing we have to do is set up a goal on in Google Analytics, and start recording how many new subscribers they are converting. Next, we need to put a value on that goal.
Gus: Like the value we put on a catalogue request goal?
Vlad: Exactly. Let’s see if I give you the raw numbers you can work out how much each email subscriber is worth to them.
Gus: Hit me.
Vlad: OK. We know that they get 12,000 unique visitors per month, their average order value is 45 euros, the conversion rate is 3% for those who have subscribed to an email newsletter, and 2% for those who haven’t, and they pick up roughly 450 new subscribers per month.
Gus: So, the revenue they generate from their email subscribers is.. 12,000 times 3%, so that is 360 orders per month, multiply that by AOV of 45 euros you get .. 16,200 euros per month. Right so far?
Vlad: So far.
Gus: If we compare that with the revenue they get from the non-subscribers, 12,000 times 2% multiplied by 45 equals.. 10,800 euros per month. So the extra revenue they get from email subscribers is 16,200 less 10,800 equals 5400 euros per month. So if I divide the extra revenue, the 5,400 euros, by the number of new subscribers each month .. I have forgotten how many email subscribers they get each month?
Gus: 5,400 divide by 350 is 15.42 euros.
Vlad: So each email subscriber generates an extra 15 euros per month, or 185 over the course of the year.
Gus: That really makes it very clear how much each subscriber is worth to the business. I think when we show this, Luca he’s going to have to get a lot more focussed about getting more names ontothe email database.
Vlad: We need to talk through all the different ways he can promote the email newsletter, as well as looking at how we can entice more people to sign up.
Gus: I think creatively there is a lot that they could do to make the call to action more compelling, also having the email signup box at the bottom of the page is doing him no favours.
Perhaps I could get one of the designers I know to mock something up.
Vlad: Good idea. We could split test the new creative against the current one to ensure that this is the reason email signups are going upwards.
Gus: I’ll give the designer I know a call after lunch and brief her.
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