Each month, we like to provide you with some insights from our own customer data to help inform your marketing strategy.
This month, we’re taking a look at some annual trends and year-over-year comparisons of key metrics.
We’ve comfortably moved beyond 2.5 billion customer contacts across our marketing platform (meaning we have one of the world’s largest data sets of cross-channel, cross-device consumer data).
This enormous data set speaks to one of our missions: Emarsys is committed to ongoing innovation based on data-driven insights, and we want to make sure you benefit from this massive representative sample of the global B2C environment, in particular, so that you can make better decisions about where to spend budgets and how to optimize marketing activities.
For this month’s benchmark, we’ll be looking at three important areas:
- Customer engagement, and the most significant overall trends in omnichannel marketing that will help you reach and engage your customers
- Customer Lifecycle Marketing performance, specifically looking at the conversion rates across different customer lifecycle stages and lifetime value
- Channel performance, comparing email, mobile marketing channels, and website-versus-mobile effectiveness
Engaging with More Segments, More Campaigns, More Channels
Measuring engagement is critical to marketing, but the actual metrics you should use to get the most accurate picture are anything but obvious. In response to this problem, we introduced a ‘global customer engagement rate’ across channels last year to make it easier to understand the impact of omnichannel campaigns on customer contact data.
For high-performing brands with a mature customer engagement model, we see 40.9% of their entire customer database visiting their websites on average in a given month.
For the bottom 25% of all Emarsys clients, we see that only 16% of their customer database visits their website, mobile website, or mobile app in a given month.
Firstly, for brands with a longer product lifecycle or a narrow, more focused product offering, it’s logical that we’d see less engagement monthly. However, even for brands with products bought less frequently, such as retail subcategories “Electronics” and “Home & Garden,” we see very comparable rates.
The key takeaway here is that the difference between the top and the bottom performers across all verticals is the average number of segments used in a given time period, the average number of campaigns, and the number of channels. The more channels, segments, and campaigns you have, the higher the levels of engagement with the customer database.
Existing Customer Lifecycles Over Acquisition
Clients with the most mature omnichannel practices have segmentation based upon the customer lifecycle and customer lifetime spend, and they segment according to engagement with a given channel to optimize the frequency and customer experience for each contact to maximum effect.
When we analyze the impact upon conversion rates for these practices, the difference in the effectiveness of their omnichannel marketing initiatives is clear to see:
Clients using more than one channel in their marketing programs alongside product recommendations or advanced personalization convert leads into first-time buyers at nearly 7 times the rate of single-channel clients — with 12.4% of all new leads converting to sale for the top quartile against only 1.8% for the bottom quartile.
Top-performing clients generate twice as many conversions from their active customers than those in the poorest performing cohort — 62.1% conversions as opposed to 30.6% for the bottom quartile. These clients are most typically heavy users of marketing automation (with more than 25% of their revenue coming from automated programs) and generate on average 58.3% of their monthly revenues from existing customers.
The key takeaway here is that while we will strive to optimize our marketing budgets to address the full lifecycle, existing customers have proven to generate much more revenue than acquisition. Our clients with the biggest growth in these areas have maximized conversion rates across different customer lifecycle stages and continue to improve their marketing efficiency.
The Channels with the Best Performance
Omnichannel-as-a-strategy is here to stay, but that doesn’t mean that we won’t need to keep evaluating each brand’s particular mix of channels for optimum performance. Here, we’ll take a look at the best performers channel by channel.
Email Still Rules
Looking closer into the high-performing marketing programs for the top 25% clients, email still dominates as the top-performing channel — with the lowest cost of acquisition and the highest impact across all customer lifecycle stages. But there are huge differences between high-performing and low-performing clients.
The top quartile has more than twice the open rate and 3 times the click-through rate compared to the bottom 25% clients. But most tellingly, they have 4 times higher conversion rates. We’ve done some initial analysis on these high-performing campaigns to uncover trends that might impact your 2018 strategy.
First up, top-performing clients (the top 25% clients based on conversion rates) have more automated programs than those in the bottom quartile. Email campaigns launched through our Automation Center (these campaigns are triggered automatically by a customer behavior, such as an abandoned cart, or a predictive segment, such as Defecting/Churn) have more than 7 times higher click-through rates for our top quartile (7.12%) than the ad hoc campaigns of the bottom 25% clients (0.90%).
Interestingly, they also send, on average, more emails per contact than the bottom 25% — with 9 campaigns on average for the top 25% compared to 2 for the bottom. Sending more campaigns per contact, as part of a personalized, automated email program actually generates better engagement rates and higher revenues.
Mobile Push Still Growing
Our top-performing clients are embracing automation in other channels besides email. For our mobile app push clients, we see that the top 25% have won push open rates of nearly 20% (19.9%) compared to only 1.7% for the bottom 25%.
The strategies used by the top and bottom quartiles differ in two key ways. The top performers launch more than 25% of their campaigns through the Automation Center, and they typically apply automation to more than one channel — meaning the combination of automated campaigns within an omnichannel strategy is engaging more customers through mobile.
SMS Still Reliable for the Targeted Audience
We also see more clients shifting their budgets away from SMS marketing and putting it into other channels, such as mobile push and direct mail campaigns as they look for efficiencies in their marketing budgets. The main reason they’re doing this is to reduce their SMS volumes and focus on sending fewer messages to a more targeted audience.
Two key challenges in SMS marketing are connectivity and ROI reporting. Looking closer at SMS delivery rates, it’s clear to see that, compared to other lower-cost channels such as email and mobile app push, SMS is still dogged by market fragmentation. Additionally, with high costs and delivery rates across different routes averaging 75.3%, SMS remains a core part of the marketing mix but a challenging one.
What separates clients in the top 25% from those in the bottom 25% are segmentation and time. Clients with deliverability rates of more than 90.8% have at least two variables in their segments (such as location, device, web behavior, purchase behavior, or contact criteria), and they’ve been sending with us for longer and benefiting from our dynamic targeting feature, which ensures that undelivered messages are removed from future sending where a mobile number is identified as being invalid. However, there is still a mismatch in the way that mobile carriers classify deliverability and the way other digital channels, like email, do.
Summary
When done well, Customer Lifecycle Marketing, personalization, and automation across marketing channels generate huge returns for top-performing businesses.
The bottom 25% of all clients we analyzed are conducting business as usual with broad segments (typically country, gender, or language) across individual channels (email and Google Adwords) and focused on the top of the funnel (driving traffic through Google and Facebook and converting via email and display retargeting). The top 25% drive more revenue from their existing customers than they do from leads, and they do it by using more than two channels and aiming their automation programs at different customer lifecycle segments.
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