There's no reason you can't evaluate your email marketing efforts alongside your other lead-generation tactics. This includes display ads, cold calling, direct mail, etc. But before you can effectively compare tactics, you need to gather actual and target campaign metrics. These metrics serve as the baseline for your tactical evaluations.
- Set your target CPA. Too many companies don't know or don't understand their cost per acquisition (CPA). There's no excuse for that, especially given the amount of data a digital marketer can collect. The formula is simple: $ spent on campaign/number of conversions=CPA.
- Set your target ROI. Before you can set your target return on investment, you need to understand the lifetime value (LTV) of your customer: How much revenue is that customer going to generate for you over the life of their relationship with your company? After you determine the LTV and have your target CPA figured out, you can calculate your target ROI using this formula: (LTV-CPA)/CPA=Target ROI.
- Know the actual CPA for other tactics. For an accurate comparison, you need to calculate the actual CPA for your other lead-generation tactics. Once you know what you're paying per conversion, you know what to gun for with your email channel.
- Test. After you identify your actual CPA and target ROI, start testing. You can vary creative, subject line and audience until you reach a competitive CPA.
- Use analytic tools. If you're already using Google Analytics to track conversions from your display ads, rest assured that you can use these tools to track email conversions as well. Just take your tag and insert it into your email creative. Then, when you look at your DoubleClick or Atlas dashboard, you will see all your banner ads and email conversions side by side for easy analysis.
Comparing tactics is as straightforward as collecting campaign performance metrics and using that data to evaluate the performance of your other tactics. Once you discover where your email programs fall short, test each component of your campaign until your ROI comes in line with expectations. Remember that lead generation is a science. Data is king, and it should inform every decision you make. If you follow the above strategy, you'll see that your email program can be just as competitive as your other tactics, if not more so.
Dave Scott is CEO of Marketfish Inc. (www.marketfish.com), a provider of lead-generation services.