In 2016 total sales from email were estimated to be in the region on £29bn. On top of that, 27% of marketers rate the email channel as ‘excellent’.
GDPR regulation will be depriving many companies of a main source of revenue over the next few months as they come to terms with the new laws. Looking at a brief overview of our clients that run email campaigns, on average just over 14% of revenue comes in through email. So May 25 was something we’ve been putting measures in place for over the last 6 months or so.
A new strategy
Inevitably revenue will take a hit if you haven’t had a double opt in system in place already. The other side of the changes are that your loyal customers who have opted in, will have less noise in their inbox and your emails will be a lot more visible than they were before.
But the response rates on GDPR emails have been painfully low. Based on my own inbox, I’ve replied to about 2% of the emails I’ve received – which says a lot.
So it’s worth looking into other channels to see what they can offer while we revive our email output…
Potentially the best short term solution would be using paid channels to generate revenue through search, display remarketing and shopping, if possible. The advantage of paid is that by using email budgets in the short term you can generate leads almost instantaneously.
The downside is that the ROI on paid campaigns is relatively lower. Typically email returns around 20-30x spend – although we have clients hitting 70-80x return – far higher than paid channels.
Paid channels typically get between 7-15x return on investment after factoring in agency costs, so the margins are lower, but the ability to scale up is the benefit. Being able to retain a 10 fold return when you’re spending £3k on ads is why many marketers are so faithful.
The only issue with Paid is that it typically attracts new users to the site, who may be more critical of layout and architecture than your loyal email database. So some analysis into bounce rates and exit points will be essential.
Although more of a long term strategy, there’s no time like the present, and a good SEO strategy can put you in a very good position in 12 months. It’s often the biggest channel for those that invest in it, so it’s important to get right. Why not move your email budget into expanding out page content and categories? Or adding products you may still not have put online?
It’s often a favourite with business owners as they’re not tied to the monthly ad spend in paid search in the long term. With the right agency, you can spend half of a relatively high ad spend and get the same, if not better results.
But ultimately it’s all about spreading risk, as relying on one channel too heavily can cause trouble in the future, as GDPR has proven.
This can often prove to be a very lucrative channel providing you can get the numbers. Conversion rates are typically 2-3x higher on referral channels, compared to organic and paid. A well planned strategy can result in a lot of traffic from relevant sites that brings with it relevant visitors.
Increasing referrals can be done through guest posting, review sites, partnerships with publishers and agreements with other businesses. Traffic tends to be more qualified through these channels as you can target other websites that are relevant to your business.
Affiliate networks can also bring in traffic by paying publishers to send traffic to your site. These can be lucrative schemes if you have the time to set them up. It’s certainly worth trialling a few different techniques to begin with and find out which works best for you. It’ll be a while before email campaigns are as rewarding as they were before the laws came in, so it may be worth investigating this avenue in the interim.
One channel that has grown so much over the last few years that it is impossible to ignore. We used to be under the impression that it only worked for certain industries. Now that doesn’t matter, there’s a network for everything. If you do household items, Pinterest is perfect. It has such a powerful commercial arm that it no longer just drives traffic, but it also drives sales.
If you are involved in something a little less visual – financial services, for example – you’ll be aware how powerful LinkedIn is for networking.
In retail, Facebook and Instagram are effectively dominating the market with their Paid Social offerings. From the Facebook Business Manager interface shop owners can upload products to display on their Facebook page, or through Instagram by tagging pictures and giving customers the opportunity to buy directly through the platform, from their mobile. And if you think this is limited to fashion it’s not. Instagram has quickly grown its active users to 800 million in the last few years, so there’s inevitably a huge array of interests on the platform.
The bottom line
It’s not the end for email. Far from it. In the coming months it will make a resurgence once the legalities have been ironed out and we get an indication of the potential risks. But in the meantime we have to cautious and investing in alternative revenue streams is the only sensible option. Spreading risk is essential for an online business, as every channel can suffer from issues affecting revenue. So consider this period as an opportunity to discover other revenue streams that you may have neglected before. It’s certainly worth getting all the facts before scaling back investment completely, you never know what’s around the corner.