EMAIL CLICK THROUGH RATE
If conversion is "king," then click-through rates must be the "queen" of successful email marketing. Previously, we wrote about the importance of conversion and down played click-through rates (CTRs). In this article, I'll show you why click-through rates are indeed very powerful and a key determinant of your campaign's success - if you've mastered your conversion rates. Open, click-through and conversion rates combine to drive the ROI and success of your email campaigns. And while all three are important, CTRs serve as the fulcrum of your conversion numbers. But even a high conversion rate won't deliver the results if your click-through rate is weak. Here are two examples that demonstrate how CTRs can determine whether your campaign costs or makes your company money.
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Say you mail to a list of 50,000 addresses at a cost of $300/1,000 for a total media cost of $15,000. We'll use a fixed 10% conversion rate, an average product/service price of $1,000, 20% margins and a cost of $8,000 to produce the email and landing page, and manage the campaign. Using CTRs from 1% to 4%, here are the results:
In the scenarios above, the difference between a 1% and 4% CTR is $150,000 in revenue and $30,000 in profits with the 1% CTR campaign actually costing the company $13,000. With all other factors being equal, higher CTRs simply mean the difference between losing and making money.
In this example, we'll look at a case where a company: a) Produces the email internally to save costs; b) Rents 200,000 email addresses at $150/1,000; and c) Generates a 1% CTR. We compare that against fewer emails rented (50,000), at a higher cost ($300/1,000), produced by an outside firm, and that generates a 4% CTR.
This example demonstrates how a well executed campaign combined with a high quality list, can deliver an ROI and profit that is greater than mailing a higher quantity to a less expensive list.
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