20%. Ask anyone dealing with online marketing what’s the question to which this number is the obvious answer, and they will swiftly response: “ah, it’s the old email open rate.”
It does seem simple, almost automatic nowadays – get the content writer on the agenda, some touches from the graphic designer, bring up your ESP, and voila! click the send button. 20%.
A research into Open and Click rates, however, suggests that reality is more nuanced than that, and may require a change in the automatic approach to Email Marketing.
New data that was gathered by Optimove using 45 million emails sent by 22 brands over the last eight months, sheds new light on the role of the customer’s lifecycle stage in determining the prospective Open and Click rates of an email campaign. Does a new customer have the same probability of opening a marketing email compared to a churned one? The answer is a clear-cut no. Customers in different lifecycle stages react differently to email campaigns, and their campaign KPIs reflect that.
Breaking the Lines
The magic number of 20% didn’t come out of nowhere. According to the data, active customers do have a 19.4% open rate, very close to the familiar benchmark. On the other hand, new customers – those in the first two weeks following their first purchase or deposit – have only a 13% probability of opening the email.
Going further down the customer journey, churned customers have an open rate of 9%, and registered customers who have signed up for the newsletter but are yet to make a purchase or deposit, will open company emails at a rate of only 6%. Dormant customers, who were absent from the company’s site for at least a year, have of course the lowest probability to open their email – 2.4%.
Two in a Hundred
CTR also varies according to segment. 3% is a well-known benchmark, but again – it’s applicable only to active customers. New customers have a Click rate of only 1.8%. Let’s put that into words: when a newsletter is sent to 100 new customers, only two will click the email. The CTR for churned customers is only 2.2%: interestingly, it is a little bit higher than that of new customers.
This data is crucial when analyzing and assessing email marketing campaigns. If you hold all your campaigns to the 20% Open rate benchmark, you are bound to get disheartened by the performance of campaigns targeted at concrete segments or at your complete customer database. You may mistakenly judge a campaign as unsuccessful even though it reaches good KPIs for its target segment. Measuring a campaign against an unrealistic benchmark can have even more destructive results when using more expensive channels, such as SMS, where a wrong notion regarding the correct Open rate and CTR can really defeat the perceived ROI.
To sum it all up: the data shows how crucial it is to understand the differences between customer behavior in the different lifecycle stages and to tailor the campaign expectations accordingly. A realistic metric for each campaign will help brands optimize their campaigns according to segments and to get a healthy reality check as to the effectiveness of each marketing message.
Omer Liss is Optimove's Director of Strategic Services, helping CRM executives of top online entertainment and e-commerce businesses optimize their customer retention strategy. Omer has vast experience consulting clients, analyzing their customer data and revealing actionable, data-driven marketing insights. Omer holds a BSc in Industrial Engineering and Management, specializing in Information Systems.
