Email Marketing E-book

Email Marketing Tips: Revealed Tips and Best Practices presented by the LaunchBit Team

Table of Contents I. About LaunchBit......................................................................................................................................... 3 About the Authors: ................................................................................................................................... 3 II. Why Email Marketing?.............................................................................................................................. 3 III. Challenges of Email Marketing ................................................................................................................ 5 A.

Growth and Retention Are a Constant Challenge Faced by all Marketers ....................................... 5 So What Are Good Subscribe/ Unsubscribe Rates?.............................................................................. 5 What’s the Best Way to Grow a List? ................................................................................................... 6 Approach the Right Market .................................................................................................................. 9 Reader Fatigue Happens .....................................................................................................................10

B.

Maintaining Subscriber Engagement ..............................................................................................12 What is a Good Open Rate?................................................................................................................12 How Can I Increase My Open Rate?.................................................................................................... 14 How Many Links Should I Include in My Campaign? .......................................................................... 16 Images and Clickthrough Rate ............................................................................................................ 20 Length of Email ................................................................................................................................... 23

C.

Effectively Delivering Emails ........................................................................................................... 25 Spam Complaints ................................................................................................................................25 Dedicated IP ........................................................................................................................................ 27 Sender Score ....................................................................................................................................... 28

IV. Case Studies ........................................................................................................................................... 29 Case Study 1............................................................................................................................................ 29 Case Study 2............................................................................................................................................ 32 Case Study 3............................................................................................................................................ 34 V. Glossary...................................................................................................................................................36

I. About LaunchBit LaunchBit is an ad network for email, working with advertising partners from around the world to reach niche audiences via email. Since their inception, LaunchBit has grown their network to thousands of newsletter publishers and campaigns reaching millions of people. Some of LaunchBit’s email publisher partners include Hacker Newsletter, Now I Know, and HTML5 Weekly. The data for this eBook has been compiled based on the LaunchBit team’s experience and their consulting work with publisher partners. To learn more about LaunchBit, visit www.launchbit.com.

About the Authors: This book is a collaborative effort by Team LaunchBit. Elizabeth Yin, the main author as well as CEO and co-founder of LaunchBit, is an internet marketer and previously ran marketing for developer products and events at Google. She also lived on a tall ship for 5 weeks at some point. Jennifer Chin, the COO and other co-founder of LaunchBit, is a front-end designer, holding a PhD from MIT in Material Science and Engineering. In her free time, she likes to experiment in her kitchen, where the team has graciously been her guinea pig on multiple occasions. Audrey Cu hails from a background of procurement and supply management. When she’s not keeping up with the latest in celebrity gossip, you can find her exploring new neighborhoods and restaurants. Zachary Tong comes from a biology background, started coding on the side and enjoys stats and graphs. Most of his free time these days is taken up by his golden retriever, Sophie.

II. Why Email Marketing? With the rise in Saas and ecommerce businesses, more and more conversions are happening online. As such, it’s becoming increasingly important for online marketers to optimize their online sales funnel: driving traffic, nurturing that traffic, and finally, converting that traffic to sales. While many marketers are fixated on driving traffic to convert people to buy right away, that conversion rate is typically so small. Even if you optimize it, you still are typically just looking at small percentages of conversions. This ebook is all about how you can nurture and engage the much larger percentage of traffic who doesn’t convert immediately. If you can turn this group of people into customers, it can be much more substantial than the number of people who convert immediately. Email is one of the best ways to nurture an audience. Instead of trying to funnel traffic to buy immediately, the best marketers will funnel their traffic to sign up for an ebook, a webinar, or even a contest. Then, they’ll cultivate those relationships over time by sending useful emails with exclusive tips/content or perks for being on the list. Their audience will get to know their voice and personality and eventually will begin to understand the person behind the corporate machine. The best marketers know that they can gain many more sales by gaining trust and building rapport with their audience first before trying to make a sale.

III. Challenges of Email Marketing A. Growth and Retention Are a Constant Challenge Faced by all Marketers So What Are Good Subscribe/ Unsubscribe Rates?

To the extent of our data, subscription rates in our network are largely biforcated. You are either growing your readership relatively slowly: 1-2% growth or you are doing really well and growing beyond 10% growth. Since we do not know how each of our publishers specifically grows their lists, I surmise that the high growth publishers in our network are using paid acquisition methods to achieve 10%+ growth rate. For unsubscribe rates, there is a skew towards a 1-3% unsubscribe rate. In other words, if the plurality of publishers are on that end of the spectrum for both subscribe and unsubscribe rates, it means that most lists are not growing overall or are growing really slowly… From the aggregate average data, it was difficult to see how a newsletter really grows. But after talking with a sample of successful newsletter publishers (lists 50k+), we found that generally speaking, their lists: 1. 2.

Grow linearly, not exponentially The slope of that linear growth increases for a while when prominent people or companies plug their lists

What’s the best way to grow a list? Create a Landing Page:

The growth of our best newsletter publishers looks nothing like the exponential nature of the growth of top websites. Most of our publishers grow in spurts — sometimes they'll get sudden floods of new subscribers, and then those taper off. That said, if you have a top newsletter, you can rival the revenue of websites who have hundreds of millions of visitors per month with lists in the low millions of subscribers. So, although it’s harder to grow as a newsletter, each new engaged subscriber can often be worth more than a single web visitor. Prominent newsletter publishers will typically create a landing page or popup solely dedicated to getting newsletter signups. Having a sign up box with a clear call to action and a couple of bullet points on why signing up can help. Here are some good examples of successful landing pages for newsletters: Now I Know Now I Know (www.nowi know.com) is a newsletter about learning a cool, new fact every day. They message this clearly upfront, have one call to action, and 3 bullet points on past topics they have covered. At the bottom, they also have social proof — testimonials from prominent people who are subscribed as well as their subscriber count, which is currently at over 80,000. Under30CEO Under30CEO (www.under30ceo.com) is a newsletter focused on young entrepreneurs, under 30 years of age. In addition to their newsletter, they also have a blog and publish articles every day. Thus, creating a single page for newsletter signups on the home page just is not feasible since they want people to read their daily news as well. Still, Under30CEO wants to have a dedicated audience to make it easier to get reach for their articles. So, they utilize a newsletter popup box to increase sign ups. The popup includes 3 bullet points for why you should sign up, and one clear call to action. If you load the page for the first time in a session, it shows up. But, if you refresh having been there in the same session, it does not, making it effective, but not spammy. Ecomom Typically, newsletter publishers will also add some sort of incentive to sign up for their list(s). B2b companies, consultants, etc. will often offer ebooks and white papers. Others, who are more consumer facing, such as Ecomom (www.ecomom.com), will typically offer discounts or coupons. Others yet, will hold contests to sweeten the deal for signing up. These tactics work quite effectively, but you will want to be careful of those who are just going after freebies and will not actually be engaged with your product or newsletter.

2 common ways to grow newsletter subscribers

1) Swaps/cross promotions The concept behind swaps is simple. You promote a company — for example purposes, let’s call it Colossus Industries, Inc. You Tweet about their new product and write a blurb about their great new offering in a blog post or newsletter. After that, Colossus Industries does the same for your company and product(s). This is essentially free advertising for both companies. The best marketers do this en masse and have an organized, efficient process for doing crosspromotions with complementary companies who have similar audiences. In particular, a lot of marketers favor newsletter swaps, because cross-promotions in emails actually get seen. Tweets will often fall off. Blog posts are effective only if they already have an audience. Often marketers swap blog posts and use their newsletter to promote the posts. There are a number of different formats you can swap. Guest posts are the most ideal, because it puts you and your thought leadership completely in the spotlight. However, not all companies have a blog or spend time on a blog or even allow guest posters. Additionally, short informal shoutouts, such as this one, are also effective: If you are a technologist, interested in startups, or Internet companies generally, you really should subscribe to Kale Davis' excellent Hacker Newsletter. It's a weekly summary of the best parts of Hacker News (which, if you're not familiar with, is a community-driven tech news site; there's nothing nefarious about it). Subscribe here -- 12,000 others have, including me. -Dan

At the top of the December 5, 2012 edition of Now I Know, the publisher promotes Hacker Newsletter with a quick blurb at the top. This ended up generating over 1000 new subscribers for Hacker Newsletter just from this one mention! Swaps work quite effectively once you reach a certain level of scale. Since publishers typically only want to do swaps with others of a similar newsletter size, this limits the number of new customers you can acquire when you have less “swap-leverage.” Smaller companies typically have to be more aggressive in doing lots of swaps with lots of small companies to get some volume. Having an efficient process of doing outreach, writing creative for the swap, and coordination becomes crucial. We rolled out NewsletterDirectory.co, a free directory of email newsletters, to help newsletters find similar lists. 2) Paid acquisition A lot of newsletters pay for new subscribers. Typically, publishers will do business development deals with lots of large bloggers or other newsletters asking them to write about their service. Most advertisers want to pay on a cost-per-lead basis to mitigate risk. Depending on the worth of an email address, it can be anywhere between $1-2 per email for pure media companies to $7+ for daily deal/subscription services. It can be even higher for high-margin industries such as Saas companies, insurance products, and financial products. The flip side is that bloggers and newsletter publishers typically would prefer to be paid on a flat fee (CPM basis) to mitigate the risk of not being paid much (or at all). This is where negotiations come in and having an organized process to do this en masse, since most deals won’t go through.

These are a few common things to consider in approaching bloggers/newsletters: 1) Relevancy - If a publisher likes your service and thinks it’s a good match for his/her audience, he/she is more likely to write about it either for free or on a cost-per-lead basis. 2) Size - Larger bloggers and newsletters tend to get bombarded with requests all the time, so approaching slightly smaller bloggers or newsletters can often be more effective. 3) Price negotiations - A lot of people we know will often be willing to take a risk and pay a blogger/newsletter on a flat fee basis but will often negotiate hard to get a significantly cheaper price, sometimes more than 50% off. Doing larger bulk buys also tends to yield better prices. 4) Creative - Lastly, placement and type of creative matters a lot. For example, if a blog is able to sell banner ads consistently, your chances of getting a shoutout on a cost-per-lead basis in a banner format is unlikely, since the blogger has limited ad inventory. A blog post, on the other hand, for a busy blogger might be a good fit, since he/she will constantly need to publish anyway. Choosing what kind of creative to negotiate really depends on the surrounding circumstances of the blog in consideration.

Approach the Right Market:

The marketers we work with love growth. (Who doesn’t?) But, growth can come at the expense of getting the wrong audience. Let me explain. Last year, I was talking with one of our advertisers. They were running a bunch of contests to giveaway some awesome stuff! You could potentially win a free iPad and other cool stuff by entering your email address into their landing pages. “More volume! More volume!” they yelled. They were getting crazy conversions off their landing page, and their cost per lead was far lower than their expected threshold. And then the crash… They were getting leads like crazy, and then they realized their leads were not paying off in the same way that their non-contest leads were. Their effective revenue per lead was much lower. Intuitively, this wasn’t particularly surprising. But, it was disheartening, because they thought they had found an awesome way to scale their customers. It all came tumbling down when they realized a few months later that those contest-leads never bought anything. Those leads just could not be cultivated into great customers. Aligning your campaign with growth Contests, freebies, and giveaways can be a great way to generate leads. But, make sure that your leads are the right audience. Make sure that your giveaways/freebies are related to your business, and even better, can hook someone into eventually buying your product. For example, I was recently approached by a jewelry e-commerce company who is thinking about doing lead generation through LaunchBit. They would do a giveaway for a free piece of jewelry, which would be relevant. But, what would be stronger would be to tie their product to their giveaway — perhaps, a credit that can be used in their marketplace? You still run the risk of attracting mere freeloaders with contests and giveaways, but aligning your giveaway to be more closely related to your product/service increases your chance of attracting a relevant audience.

Reader Fatigue Happens

A couple weeks ago, we received this email: Hi Jennifer, I have a question. Our open rate keeps going down and I have no clue what’s going on there. From your experience, could you tell me what seems to be the problem? It’s getting worse and worse. We’d like to stop this as soon as possible. Could you give us your advice on this? Thank you, [Newsletter publisher name] We generated this graph to get them some answers.

This graph breaks their subscribers into cohorts by the month they subscribed. A more ideal way to do this would have been to create cohorts by subscriber acquisition channel. But alas, that information was not available to us, so we broke subscribers into time-based cohorts. As you can see, the overall open rate is indeed decreasing. It goes from about 30% to nearly 15% on average. “Reader fatigue” in newsletters is a common phenomenon. When someone first signs up for an email newsletter, they are excited and tend to open every issue they receive. Over time, however, they do not open as often. They don’t necessarily unsubscribe or hit the spam button; they just don’t open every issue. Different newsletters have different average decay rates. The two most important factors to look at in email newsletters are 1) decay rates by customer acquisition channel and 2) the effect of content on decay rates.

Older customer acquisition channels are more engaged Almost all the cohorts in this case mimic a similar pattern regardless of their starting and ending open rates. This isn’t necessarily the case with other newsletter publishers. In fact, you can see that this publisher’s most recent subscribers don’t fit the same pattern. Moreover, the older subscribers on this list seem to be much more engaged. This could be due to a particularly effective customer acquisition channel used in the beginning. But, it could also just be that their most loyal friends, family, and fans signed up in the beginning. We recommended taking a closer look at August-October customer acquisition channels to see if there was something unique about their marketing then that is different now. In contrast, their most recent cohorts are not that excited about their email marketing. Cheaper customer acquisition channels vs. open rate? The publisher responded to our recommendation, and as it turned out, they recently changed their subscriber acquisition user experience. This resulted in an increase in signup conversions by 4 times! So, even though their open rate on newer signups has dropped as much as half, their 4 fold increase in new subscribers makes up for the lower quality subscribers. On the outset, this seems like a win for them. Our one caution would be to carefully monitor spam complaints. They are currently on shared IP addresses, so if their spam complaints increase, they may be forced to share “dirtier IP addresses” with true spammers. (We’ll get into this topic a little later on.) If we had broken down the cohorts by customer acquisition channel, we may have encouraged them to remove the non-performing channels. Create a reason for subscribers to open So what to do about the people who are not opening? This is where changing content comes into play. We encouraged this publisher to reduce the frequency of sends to this audience and to change the subject lines of the emails they do send to this group. They can promote special perks to this non-opening audience — first crack at events, opportunities, discounts, freebies, etc. From our experience, reviving a non-opening list is difficult, but you can win a few small percentages of your list here and there through these tactics.

B. Maintaining Subscriber Engagement What is a good open rate?

A Y Combinator founder asked me this past summer, what kind of stats he should expect for his email newsletter. I thought I would share our learnings publicly since we see a lot of data in our ad network for email newsletters. Note: this is only data for email newsletters, not transactional emails. Moreover, the email newsletters in our network tend to be focused on content as opposed to commercially-focused. Here is a plot of open rates for the newsletters in our ad network. We filter and reject a lot of publishers to keep the quality high in our network, so this plot is essentially a bell curve of the open rates of high quality email newsletters.

Based on just eyeballing the skew of this graph, I’d say that 20% open rate (over which the vast majority of our publishers lie) is roughly what you should be shooting for. Anything above that is amazing. We were curious, though, whether a larger list size affects open rate? Is it harder to retain a good open rate with a larger subscriber base?

We found there is no correlation between list size and open rate. Open rates do not actually get better (or worse) as you increase in size. Disclaimer: we did not have enough data to include our largest publishers (100k+ subscribers), so we can’t say with any certainty that this continues to hold at the very large list levels. Now, a few entrepreneurs have asked me if they should benchmark themselves to email stats broken down by industry. (See: http://mailchimp.com/resources/research/email-marketingbenchmarks-by-industry/) Unfortunately, I don’t have enough data around that study to say whether you should seriously look at those numbers. For example, if we look at the Agriculture and Food Services category, these newsletters have an average open rate of ~24%. For simplicity, let’s pretend there were only 2 newsletters in this category. This could mean that one has a 25% open rate and another has a 23% open rate. It could also mean that one of them has a 47% open rate and the other has a 1% open rate. In other words, we don’t know how different the open rates are. That said, if we use the standard deviation of publishers in our network to figure out how big of a difference the open rates are, we find a normalized stdev = 0.23, which is quite high (relative to 1). What this means in plain English is that the vast majority of our network is spread out by a lot and are not closely centered around average. With that in mind, I would not worry about the industry averages — just try to keep your open rate above 20%. Now, if you are just starting to send email newsletters, you may find that at first you’ll have an amazing open rate, but as you send more email newsletters, your open rate will probably drop. Keep an eye on this — this is the number that tells you whether or not people actually care about your emails. It is normal to see your open rate drop and taper at a steady state. But make sure your open rate doesn't continue to drop in a downward spiral. Even people who are opening may eventually start seeing your emails go to spam, due to the lack of engagement of others’ on your list. Assuming that you are sending to people who have legitimately subscribed to your list, low open rates start happening for two reasons: 1) People don’t want to read your emails anymore - This is obvious, but how to combat this? Unfortunately, limiting your emails or unsubscribing people from your emails is the best way to save your open rate from going to the pits. 2) Your emails are getting stuck in spam filters - There are certain key words that will often send your emails to spam. Check out: 100 Spam Trigger Words & Phrases To Avoid (http://blog.mannixmarketing.com/spam-trigger-words/). For example, we see a number of people use the word “Free” in their newsletters, and this can often send emails to spam. If you are offering a product or service for free, try using phrases like “complimentary” or “at no charge”. Also, check out Mailchimp’s explanation on spam and spam filters (http://mailchimp.com/resources/guides/html/how-to-avoid-spam-filters/).

How Can I Increase My Open Rate?

It’s another week, and you’re hurrying to get your email newsletter out the door, because you’ve heard it’s a good idea to do email marketing. But, you’re not really sure whether your email marketing is good or bad. But, obviously, not everyone is opening your emails, so what is a good open rate and how do you improve it? As I said above, a good open rate is 20%+ in my book. This is just my opinion based on our data in our email ad network. Imagine two scenarios. 1) You’re seeing < 10% open rate: If you’re seeing such a low open rate, you may have a bigger problem on your hands. At this level, I surmise that a number of your emails are actually going to spam rather than inboxes. If this is the case, you will want to fix this immediately, as this is just a downward spiral to losing your whole email marketing program. Once your emails stop going to spam, you should see a slight boost in open rates, which leads me to scenario #2. 2) You’re seeing 10-20% open rate: When you’re in this category, the three most impactful activities you can do are: a) Clean up your list - No one wants to do this, but it really helps to clean your list every once in a while. Your email service provider should be able to tell you who on your list has not opened in the last few months. If the same 15% of people on your list keep opening your emails, it means that 85% of your subscribers are not opening at all! It’s time to whittle down your list and to stop sending to people who are not opening your messages. Perhaps, save this list of people and send them a message only when you have a very important message instead of daily or weekly so that they will listen when you send them fewer emails. I call this Karma Sending. b) Test subject lines - Once you clean up your email list, it’s time to reinvigorate your email marketing. Using the same subject line diction over and over again gets boring very quickly. If you have enough people opening your emails, try split testing creative new messages that may be random or whacky. A few ways to make your subject lines stand out: - Reduce the number of characters in your subject line - Try special characters - Ask a question - Be vague - Use different diction from your typical subject lines Note: None of these ideas are guaranteed to improve your open rates — these are just some ways that changing a subject line has helped other email marketers improve their email marketing. They’re worth a few tries. c) Send your email newsletter at a different time - Karma Sending and testing subject lines are probably the most effective actions you can take to improve your open rates. But you might get a slight boost by sending your email newsletter at a different time.

A couple years ago, there was a lot of advice circulating on the internet about the best day and time to send your email newsletter. However, because a lot of email marketers now send on those days/times, there really isn’t an optimal day/time that you can generalize for your newsletter. However, there are a few strategies that may make sense to test. - Try sending not on the hour. Lots of marketers will queue up their newsletters to go out at say 8:00, fewer at 8:37. - Try sending on days and at times other marketers may think are bad days/times to send, such as the weekend. With mobile becoming more prevalent, subscribers can check emails all the time. - Try sending on the off-holiday. Everyone tends to send emails around the December holidays. And while this is the best season for retailers, if your business is not seasonal, it may be wise to send your promotions at other times for holidays or occasions that are not often celebrated, such as Pi day or Clean Up Your Room day. - Try sending emails to your subscribers when you know they open. If they last opened on a Monday at 2:48pm, then send at that time again next week. If not, experiment with other times.

How Many Links Should I Include in My Campaign?

Since we run an ad network for email, we care a lot about where clicks are happening in email newsletters. We recently ran a study with publishers in our own network, analyzing which links people click on. Details of the study: We analyzed clicks across 66k+ email campaigns and nearly 300M sent emails. If there were 10 links in a given email campaign, we looked at whether the first link was clicked, the second link was click, and so on and categorized our findings and graphed them. As it would turn out, email campaigns that had < 5 links had click-behavior that was very different from campaigns with 5+ links. Let’s first discuss the results of newsletters with less than 5 links. Place your call to action in the first or second link You could’ve probably guessed that the first link of an email gets a lot of clicks, and you’d be right. It turns out, having your call to action as the second link in your email newsletter is just as good if not better. (Note: These links are not the “Click here to view this in a browser” or “Unsubscribe” links. These links are the first links that you, as the email publisher, insert.) One caveat is that a lot of publishers tend to link a header image at the top of their newsletters to their respective websites, and those would be considered the first links. This may explain why the second link gets a slightly better click-through-rate in the graph below.

Of all clicks across all email campaigns, the first link was clicked about 35% of the time. So, for example, if there were 100 total clicks across all email campaigns, 35 of those would be on a first link in an email campaign. What is interesting is that the drop off after the second link is quite steep. In fact, link #3 on average gets approximately 1/3 as many clicks as link #2! You might be thinking, “Well, is it because most email campaigns only have two links in them?”

As it turns out, there was not a whole lot of 1-link or 2-link campaigns relative to the total population of campaigns we analyzed. This was the click breakdown: 1-link campaigns Clicks on link #1: 131,914 Clicks on link #2: 0 (because there was only 1 link to click on) 2-link campaigns Clicks on link #1: 72,003 Clicks on link #2: 163,419 Total on 1 and 2 link campaigns: Clicks on link #1 = 131,914 + 72,003 = 203,917 Clicks on link #2 = 0 + 163,419 = 163,419 Total on ALL campaigns: Clicks on link #1 = 1,569,827 Clicks on link #2 = 2,053,468 So, the effect of clicks in these 2 types of email campaigns was approximately 13% on link #1 and approximately 8% on link #2. So, even if you removed all clicks from #1 or #2 link campaigns, the breakdown of clicks would still massively favor clicks on links in position 1 or 2 over subsequent link positions. Correlation is not causation, but you might see improved results by moving your call to action into the first or second link in your email newsletter (where you have fewer than 5 links).

Plurality of email campaigns have no links From the Campaign Histogram graph, we also see that the plurality of campaigns actually have 0 links. It really surprised us that so many email campaigns have no call to action, and we were wondering why publishers are sending these emails. (It is possible that some of these publishers have an offline-call to action or an email-the-publisher call to action.) Now, let’s look at campaigns with more than 5 links. It doesn’t matter where you place your links While we previously found that most clicks were on the first or second link in newsletters with