Why industry benchmarks are just the start

Email marketers often look to only industry benchmarks when making business critical decisions. They should instead start there, and then focus on maximising the potential within their own audience by looking at four key areas. One of the most common questions clients (and colleagues!) ask me is “what’s the industry benchmark for X” (where X is usually delivered rate/open rate/click rate etc). Often times, they are a bit surprised by my response: It doesn’t really matter!

Industry benchmarks – a good starting point
Of course, I then have to explain myself quickly – sure, an industry benchmark (click herefor ours) is a great starting point for any marketer, and everyone is keen to be better at what they do and follow “best practice” – but more often than not the ones asking this question most fervently are the ones who haven’t even begun to look into their own activity, and how their own audience is responding to their super-important, gorgeously designed email marketing campaigns.

Limitations of industry benchmarks
The issue is that when it comes to benchmarks from an entire industry you are looking at an aggregate of demographics, the differences between brands, the differences of timing, offer, incentive; those figures by definition are averages, and even then – they are averages of other people’s averages.

Every marketer faces unique challenges with the audience they address through email marketing. The key to measuring performance, and gauging success, is to focus all of your efforts towards maximising the potential within your own audience.

Aim to be better than average with four simple areas of focus:

1. Measure the right things
For instance, draw a clear line between implicit and explicit metrics (i.e. open rate can be seen as an implicit measure as there will always be a certain number of people viewing the email without enabling images – versus click rate, where a recipient has actually taken an explicit action on link within an email). Also consider whether click rate is the ultimate success measure for you as a business, or whether you should be more focused on what happens after the click – are you looking at conversions? Similarly, from a deliverability perspective make sure you take into consideration complaint rate and unsubscribe rate as measures.

2. Compare “apples with apples”
Make sure you are doing like-for-like comparisons (e.g. newsletters versus newsletter, not versus welcome campaign), and also using the same metrics consistently across your activity. Even some ESPs calculate open rate differently, so it’s important to know exactly how your key metrics are calculated – understanding what happens when you change the denominator in a calculation can lead to some surprising insights!

3. Create your own benchmarks
Even if you only have a few weeks worth of your own data, it’s better than nothing. Create an average for your past month, six months, 12 months and use that as a benchmark for your current activity. The next step is to divide that data into your distinct communication streams so that you can make meaningful comparisons with the types of emails you send. Another thing to bear in mind with benchmark data is that it is all historical – in fact, even with the most up-to-date industry stats out there, you’re looking at six month-old information.

4. Test and test again
Perhaps more importantly, don’t stop testing. Even if it is a simple A versus B subject line test run on a weekly basis, the simplest kinds of test often yield the best optimisation results. Build up a catalogue of test results to give you an indication of how certain variables and audience conditions might perform. Aim to build your own best practice hub, not rely on the results of other companies. Because your audience will always be in a state of flux, you should never hold something as a champion over all others as it will likely change next time – it’s all about continuous improvement and optimisation.

In summary, you can use industry benchmarks as a yardstick for overall performance – but don’t hold yourself to them for business critical decisions or determining your own strategy. Focus on the four areas above, and in the end I believe you can’t help but (literally) become victims of your own success!

Jolyon Hunter, marketing consultant, ExactTarget

DMA Email Benchmarking Hub and Email Marketing Council member

Twitter: @jolyonh