Pretty big claim! But we’ve been measuring open reach across a range of clients and industries for seven years and have unearthed a wealth of valuable insights that underline why this metric should become the lynchpin of your marketing strategy.
So what is open reach?
It’s a customer engagement metric that measures the proportion of your base who have opened at least one message over a period of time. You can apply reach to all standard metrics, like click or purchase, but here we are focusing on open reach.
And how do you measure it?
Open reach is calculated by counting the number of subscribers on your list that have opened at least once and dividing that by the number of subscribers that have received at least one email from you over a given time period. This could be a quarter or a year, depending on your send frequency and specific goals.
Now to the juicy bit, those five reasons why open reach will revolutionise your email marketing:
1. Forget “what are my campaigns doing” – learn “what are my customers doing”
How often do you ask “what are my customers doing?” And yet, nearly all email metrics answer something different – “what are my campaigns doing?” So why is this disconnect in our industry? Because conventional email metrics, like open and click, only measure the performance of individual campaigns. They do not give you any insight into customer behaviour. However, open reach doesn’t just assess the value of the content and creative of your individual mailings, it also builds a clear picture of the overall performance of your campaigns and the health of your database.
Consider this example: if your newsletter has an average open rate of 21%, does that mean that after sending out 5 messages, every subscriber has opened at least one message? Maybe, maybe not. It is far more likely that there is a group of subscribers that open every email as well as a group that never open. But that is just an educated guess. There is no way of gaining this valuable learning about your customers by looking at open rate. You have to use open reach to find the answer.
2. Want to improve your revenue? Just improve your open reach
We’ve noticed that a significant chunk of total revenue is generated when customers who have never opened or haven’t opened for ages, open one of your emails for the first time (graph 1). Although multiple openers have a much higher response rate than first time openers, they account for only a small percentage of total revenue over a given period because they are a much smaller group. First time openers generate significantly more total revenue in the same period because they are a much larger group.
Although it’s easy (and common) to focus on the small group with the best response rate because the open and clicks look great, it’s the much larger lower-responding group that will give you the biggest increase in your total revenue. So the short term goal of increasing open and click rates is replaced by the longer term strategy of converting non-openers into first time openers, and then those first time openers into the higher-responding multiple openers group. All you have to do is unearth the different ways to move your customers up the engagement chain. And guess what, open reach shows you the best way to do that …
3. Customers and prospects behave differently – so treat them differently
So, how do you move your customers up the chain? First, you have to understand how first time openers and multiple openers respond to your emails in comparison to each other. Let’s say you send out a free delivery offer to your entire base. Open rates and revenue for that campaign are both above average. You send out a SAVE 20% offer and both metrics are again above average. They are both a success, right? So based on those metrics you would keep sending these two different types of offer to your entire base.
But look at the open reach for these offers and you’d see that the free delivery had very little effect on cumulative first time opens, whereas the discount offer had significantly more. A free delivery offer has less interest to someone who isn’t buying regularly but does appeal to someone who is. Likewise, a juicy discount is far more likely to engage someone who has been inactive for a while. By analysing open reach you can identify what appeals to these different groups and target them with the appropriate offer and message. Your customers are telling you how they want to engage with your brand, so use open reach to listen, learn and lift your response.
4. Isn’t reactivation an expensive chore? Then start doing it with every email you send
Now you’ve identified your different groups in the engagement chain and how to press their buttons, you’ll notice that the first step in the chain – non-opener to first time openers – is actually the same as reactivating inactives. So you can stop thinking of them as inactives and start thinking of them as opted-in prospects (graph 2). You’ll rarely have to bother with a one-off, low-margin reactivation campaign because every email you send will be a reactivation opportunity.
And it doesn’t just stop there. The insights you gain from analysing what motivates your non-openers to become first time openers will inform your new reactivation strategy. There’s no need to send pleading “we miss you emails” when your open reach analysis is telling you that a SAVE 20% offer has significantly increased first time openers. That’s a measurable trigger for this group, so use it and all the other customer insights open reach will drop in your lap.
5. Learn what really drives engagement
Open reach will also show you that new subscribers to your list are the most likely to become first time openers. Sounds obvious, so why is it important? Well, in essence this is saying that one of the best ways to increase your revenue is to grow your list. New subscribers = increased first time openers = more revenue. But, while growing your list is an important part of any email strategy, it is an expensive way to increase revenue.
There is a more cost effective way and, you’ve guessed it, it can be identified and optimised using open reach. It’s frequency. Periodically increasing the frequency of your emails increases your first time openers. In graph 3 below, a client who was sending a monthly email changed to a weekly. Result? The monthly had an open rate of 17%, while the weekly emails averaged just 10%. However, when the open reach was measured the weekly emails were found to have significantly increased the number of first time openers. Total opens for monthly = 9,008, total opens for weekly over the same period = 21,006 (unsubscribes were statistically insignificant). Inactives were engaged by extra sends because, to state the obvious, they had three more opportunities to do so. Had only conventional metrics been used to measure this test, then it would have been seen as a failure. Increased frequency = more opportunities to engage = better open reach = more revenue in the long run. And which one of your stakeholders could argue with that?
Your 5-step plan:
1) Start measuring your open reach and see what your customers are doing
2) Identify your non-openers, first time openers and multiple openers
3) Compare the behaviour of each group and use that knowledge to target them
4) Treat your non-openers as opted in prospects and reactivate them with every email
5) Increase your revenue by increasing your open reach by increasing your frequency