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CRM Campaigns: Going Further than the Unsubscribe Rate

Ardavan Beigui

VP Sales

5 October 2016

Every marketer has to keep a close eye on the erosion of their customer database. For many, the most common way of monitoring this is the so-called unsubscribe rate. For any given email, the unsubscribe rate equates to the ratio between the number of unsubscribes vs the total number of campaign members. This ratio allows us to answer the following question: “To what extent has this campaign affected my customer database?”.

But really, is this ratio actually relevant and are there any other more suitable indicators for a marketer who wants, above all else, to maximize the revenue of their marketing campaigns?

Instead of measuring the unsubscribe rate in relation to the total number of campaign members, the number of unsubscribes can be determined on the basis of those users who have clicked within the email. Hence we can consider unsubscribes as clickers who have a negative impact on a campaign. The “useful clicks rate” ratio (the ratio between the number of clicks that are not unsubscribes and the total number of clicks within the email) can then be calculated. This idea allows us to assess a campaign’s performance in a more pragmatic and accurate way.

However, should an email campaign’s performance be assessed solely on the basis of indicators related to the performance of the email sent (“has my email arrived?”, “has my email been opened?”, “has my email generated interest?”, and so on)? After all, what really dictates a marketer’s actions on a day-to-day basis? The answer is the revenue generated from a campaign.

An email with a high open and click rate has little value if the revenue generated is very low, and vice versa. Therefore, a good campaign is a campaign which generates revenue and causes the least possible damage to the customer database. In absolute terms, this means that a campaign with more unsubscribes can actually be better than one that has fewer.

In order to include both a campaign’s positive dimension (generated revenue) and its negative dimension (unsubscribes) consider the following ratio: “revenue generated vs unsubscribes”.

Let’s take the example of two marketing campaigns to illustrate this ratio:

Campaign A: 700 000 mails sent – 7,900 clicks / revenue of $8,500 / 550 unsubscribes.

Campaign B: 700 000 mails sent – 28,300 clicks / revenue of $40,000 / 850 unsubscribes.

  1. First observation: if only the unsubscribe rate is taken into account, Campaign A would be viewed as more successful as it shows a lower unsubscribe rate.
  2. However, by examining the “useful clicks rate” it appears that we must put this analysis into perspective. Campaign B’s useful clicks rate is 97% whereas Campaign A’s is 93%. In other words: Campaign A generates more than twice the number of unsubscriptions when related to the number of visits.

Let’s go further and include in this analysis the revenue generated:

  1. With the same scope of sending, Campaign B has generated more revenue than Campaign A.
  2. When this revenue is compared to the number of unsubscribes, we identify that the revenue threshold for which the customer database loses one client per unsubscribe. Therefore, Campaign A creates one unsubscribe for every $15 of revenue generated (8,500 / 550) against Campaign B, who sees one unsubscriber for every $47 (40,000 / 850).

Therefore campaign B is clearly preferable. It has a higher percentage of useful clicks and a higher “turnover based on unsubscribe” cost.

Emails sent Number of clicks Revenue Number of unsubscriptions Unsubscribe rate Useful click rate Revenue generated vs unsubscription
Campaign A 700,000 7,900 $8,500 550 0,08% 93% $15 generated / unsubscriber
Campaign B 700,000 28,300 $40,000 850 0,12% 97% $47 generated / unsubscriber

 

By not relying solely on the most frequently used indicators, it is possible to delve further into the measurement of unsubscription and more generally, the actual performance of a marketing campaign. The management of campaigns can therefore be optimized to be more “business oriented”, especially when the “turnover on the base of unsubscribe” ratio is considered. This ratio takes both sides into account: the impact on both customer engagement and on revenue generation.

In conclusion, specific campaign statistics are only relevant in relation to their respective objectives. For example, if your objective is to:

  1. send emails then the “unsubscribe rate” is the most relevant
  2. generate traffic, then the “useful click rate” is preferred
  3. generate revenue, then the “revenue generated vs number of unsubscriptions” is the best indicator.

Ultimately, it depends on the specific goals of each business. So, what are your goals?

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