B2B Email Benchmarks: Answers Vary Widely

One of the things I’m enjoying about my new role as head of analytics at Left Brain DGA is being closer to hands-on marketing than I was as a consultant. This leads to different questions than I used to get, including the ever-popular “what’s a reasonable response rate for our emails?” That one came up last week and led me to review my files on industry benchmarks. Without giving away any deep secrets, I thought I’d share the results.

I found five relevant studies dating back to 2009. Taking the oldest first:


Silverpop International Email Marketing Benchmark Study, 2009


This one doesn’t break out results by mailer type, so it’s probably dominated by business-to- consumer marketers. But it does distinguish gross opens from unique opens, which are significantly different. It also shows median as well as average results, in addition to top and bottom quartiles.  This is a good reminder that there's a very substantial range of variation in different marketers' performance.  The difference between the medians and averages is also something to bear in mind when looking at the other surveys, which only report averages.

Silverpop is also the only study to give both bounce and unsubscribe rates – the others give one or the other.

Here is the U.S. data from the Silverpop report.

MailerMailer Email Marketing Metrics Report, 2011


I just discovered this one and am impressed.  It goes beyond simple reporting to analyze the impact of delivery day and time, number of links, subject line length, and personalization (some surprises here). The repoort breaks out results for several categories, of which the most relevant are probably Computer, Consulting, Large Business and Small Business. (I’ve added a simple average to use later.)

In general, this study shows substantially lower open rates than other studies, somewhat higher click rates, and higher bounce rates. I’ve calculated the click-to-open rate, which isn’t necessarily the result you’d get if you looked at the actual average. But it’s worth having as a point of reference.

Here’s some detail from the study itself (you'll have to click on this to make it legible).  The business categories account for two of the four highest open rates and are all in top half of the click rates. 

Eloqua Marketing Metrics Outlook 2011


You’d expect Eloqua to put out a good study on this topic, and they deliver. The best-in-class, average, and laggard classifications illustrate the huge gap between even average performers and best-in-class. They also reinforce the point, illustrated in the Silverpop data, that medians are significantly below averages because of high-end outliers.  Not to go all stat-geeky on you, but that really matters if you're looking for a benchmark that reflects "typical" performance.

Arguably all Eloqua clients would be relevant to marketing automation users, but the most relevant for true B2B would include Manufacturing, High Tech, and Business Services:

Across all categories, Manufacturing has the highest open rate and is tied for second highest click-through, but the two other "true" B2B categories rank at the bottom.  The combined averages for the three are just slightly below the average for all categories.

Epsilon Email Trends and Benchmarks Q42011


Epsilon is another industry stalwart, publishing regular quarterly reports. But they only provide one category for B2B Products and Services, plus another for Business Publishing. The open rate for that category seems pretty high compared with other studies, although the click rate is largely in line.

Comparing Business Products with other categories, both the open rate and click rate are in the middle of the pack, each ranking sixth highest of 13 categories.

Epsilon also provides an intriguing breakdown within each industry of results by email type (acquisition, editorial, marketing, research, and other).  The figures for marketing emails in the Business Products category (19.2% open rate, 2.7% click rate)  are considerably lower than the category total (27% and 4.4%), but I can’t make sense of the numbers: marketing accounts for 88% of the industry volume, so they just shouldn't be that far apart.  (More formally: if you combine the message type figures in a weighted average, the result does not equal the category total.)  I’ll assume the group totals are more reliable than the detail.

Signup.to The UK Email Marketing Benchmark Report 2012


Finally, we have a study from Signup.to in the UK. I’d question its relevance to the U.S. market, but the 2009 Silverpop study showed similar figures for both. It includes figures for B2B Sales, B2B Service, Industrial/Manufacturing, and IT. These vary pretty widely, especially for open rates.

Compared with other categories, the business emails get somewhat above-average response:

  
What Does It All Mean?

Within each report, open and click rates B2B categories tend to be in the middle or  above average.  But the over-all ranges vary substantially from one report to another: at the extremes, MailerMailer open rates range from 7.1% to 17.6%, while Epsilon ranges from 14.2% to 35.6%.  Without understanding the reasons for these variations, it's hard to select a single reference point as a benchmark.  The best I can suggest is to throw out the outliers, which would leave Eloqua and Signup.to.  I'd also tend to favor the Eloqua figures because they are based on the "average" performers, and therefore are closer to a median rate.  (You'll remember that averages tend to be higher than medians, because a handful of very high performers distort the results).

That said, the table below shows the average figures for each survey (which, you'll remember, themselves hide significant variations within each report). I’ve calculated an average of averages, excluding Silverpop since it didn’t break out B2B from B2C. As it happens, the averages fall somewhere between the Signup.to and Eloqua figures.  So, if you forced me to propose benchmarks for B2B email performance, I'd say those numbers are as good as any.

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Infusionsoft Revamps Its Interface, Adds New Campaign Builder, Web Analytics and Lead Scoring

Infusionsoft introduced its latest release earlier this month. This included a full revamp of its customer interface, a new campaign builder and shopping cart, and new capabilities for Web analytics, lead scoring, and lead source reporting.

Stated so plainly, this doesn’t sound like much. But Infusionsoft says it’s the biggest release in company history and I've no reason to doubt.  A new interface and campaign builder are big projects.

Both represent significant improvements over previous Infusionsoft editions. The interface is cleaner, organized around tasks rather than data objects, and lets users customize their menu of top-level functions. The campaign builder now supports branching flows, timers, and multi-step sequences with a smooth drag-and-drop interface. The shopping cart is also significantly more powerful. Lead scoring (nicely executed), Web analytics, and lead source reporting all fill major gaps in the product.

That said, this is still an evolutionary release for Infusionsoft. In part, this is because the company is careful not to overwhelm clients with too many changes. More fundamentally, it reflects Infusionsoft's steady focus on solving the same problem for the same customers: helping businesses with under 25 employees run their marketing, sales and e-commerce more efficiently.  This lets Infusionsoft understand its customers' needs deeply and build systems that meet them.  The company conducted more than 500 interviews in preparing the new release.        

Infusionsoft still has a ways to go.  The new release adds some missing marketing features but doesn’t incorporate social media, blogging, or Web site management. These are common needs for small businesses, so I’d consider them gaps in the product. The system also lacks dynamic content, custom data tables, and sophisticated user rights management – but those are more relevant to larger firms than Infusionsoft’s target customers.  Split testing is also missing – and even though few small businesses do it, I'd argue it belongs in the product, because they should.

Infusionsoft also reported that it continues to grow nicely.  The company now has 8,500 customers, 30,000 users, and expected revenue of $40 million in 2012, up 50% over $26 million in 2011. It is expanding its service offerings, app marketplace, and network of consulting partners – a critical resource for small businesses that often have little in-house marketing talent.  Pricing on the new release remains unchanged, with full-featured versions starting at $299 per month. 

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Survey of Surveys: Budgets and Process are Main Barriers to Marketing Technology Success

I recently gave a Web presentation comprised almost entirely of slides from different surveys. This was a bit of an experiment and, sad to say, it didn’t seem terribly successful. I did weave the slides into a nice little story line – marketers know they need better technology, poor data is the root of their problem, and we know how to solve this – but even that wasn’t enough. Pity.

Still, preparing the slides gave me a chance to scan the surveys in my archives, which was entertaining in its own little way. Many surveys ask similar questions, which gave me some choices during my preparation. But I didn’t look carefully at how they compare.

Today I’ll do that. I’ve chosen one of the most popular questions: what are the barriers to marketing technology adoption? I have versions of this from seven different surveys within the past year.

Of course, each survey uses different terms. To make the comparison, I collapsed the various answers into a few reasonably-distinct categories, committing a certain amount of shoe-horning along the way. I then recorded where each answer ranked in each survey, compiled the results, and did a crude ranking with a combination of mathematical wizardly and body english.  (Multiple answers for the same survey indicate I placed several questions into the same category.)

Results are below.  I've shaded the first ranked answers in orange and the second and third ranked answers in yellow.

My first observation was the sheer inconsistency of the answers. Budget issues emerged as a clear number one, but they reached that rank on just four of the seven surveys and ranked quite low on the other two that included them. The second-ranked item (marketing process) was never listed first; it ended where it did because it had the most twos and threes. No other item was ranked first more than once or in the top three more than twice.

Things made a bit more sense when I looked at the survey audiences. Winterberry and Forrester were specifically about online marketing, Gleanster and Marketing Sherpa were B2B surveys, and IBM and the two CMO Council studies were of general marketers. Since most B2B marketing is also online, it makes sense to look at the first four as one group and the other three as another.

Now we see some interesting consistencies:

• Budget isn’t much of an issue for the online and B2B marketers, but dominant for the mixed marketers.

• Marketing process and marketing staff skills are major concerns for online and B2B but rarely mentioned by the mixed marketers.

• Senior management support, and to a lesser extent IT support and technology capabilities, are significant barriers for mixed marketers but don’t slow down the online and B2B groups.

• Metrics, organizational silos, and the economy are cited occasionally by both groups but don’t seem to be major issues for either.

So there’s a fairly coherent picture after all.

• Online and B2B marketers are struggling to keep up with a rapidly changing marketplace, meaning their biggest problems are people and process. The importance of their work is obvious enough that budgets and senior management support are generally available. They have the technical savvy and independence to avoid issues with IT support and organizational silos.

• Mixed marketers, working in traditional channels, still struggle with budgets, metrics, and senior management. They have mature marketing organizations, so process and skills are in place, at least for traditional programs. They do struggle more with IT, technology, and organizational silos, because they lack their own technical skills and have limited clout in the organization.

• Everybody says they care about metrics but it's rarely a top priority.


Or at least that’s my take. I’ve displayed the actual surveys below – if you reach other conclusions or spot any other patterns, let me know.

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Kwanzoo Builds Content for Cross-Channel Marketing

I first bumped into Kwanzoo about a year ago at a conference trade show and was frankly puzzled at what they offered. The mechanics were clear: a tool to generate HTML-based forms, surveys, banner ads, and social sharing links that could be used on Web sites or embedded in emails. What puzzled me was the advantage of this over anyone else’s HTML content, including the content that could be generated using standard tools within most marketing automation systems.

Since this particular mystery ranked somewhere between the fate of Amelia Earhardt  and Nacza Lines  in my personal priorities, I didn’t investigate further. But the company reached out to me recently and provided a clearer explanation. Here’s the story.

What makes Kwanzoo special is it creates a sequence of Web pages that can be deployed as a single unit. A typical sequence would be a survey followed by different offers depending on the visitor’s answers. The entire sequence is built in Kwanzoo and deployed as a code snippet which displays the survey and calls the subsequence pages from Kwanzoo when appropriate. The second thing that makes Kwanzoo special is that its pages can be deployed on a client’s own Web site, on external sites and ad networks, embedded in emails, within Facebook, or on a mobile device. Users can also apply Kwanzoo tags to conversion pages to track results.

These capabilities make Kwanzoo substantially more versatile than a conventional marketing automation system, which would rely on campaign flows or manually-embedded links to manage the page sequence and could only deploy on emails or microsites generated by the marketing automation system itself. By contrast, users design the flows by filling out a simple form within Kwanzoo and then receive HTML snippets – simple calls to Kwanzoo-hosted URLS – that can be embedded anywhere. Kwanzoo also provides a powerful editor to build the Web pages and offers.

Data captured by Kwanzoo can be directly posted to Eloqua, Marketo, Constant Contact and Salesforce.com. The Eloqua integration is especially elegant, using an Eloqua Cloud Connector (i.e., a parameterized API call) that makes the Kwanzoo pages available within Eloqua’s own content builder and can read Eloqua cookies in real time to help guide the response selection. Integration is on the way with other marketing automation and CRM systems.

Users can also apply IP-address-based visitor identification to tailor responses to named accounts and different industries.

Kwanzoo says this versatility addresses some critical pain-points for marketers, including needs to create content and capture data across multiple channels and to create more personalized interactions. True enough.  But the system has its limits, most notably that sequences are limited to a couple of steps, a few data inputs, and a handful of actions, and that it doesn't maintain its own marketing database.

In other words, Kwanzoo is more a bridge between different marketing channels than an integrated marketing system. It’s easy to imagine Kwanzoo-captured data making its way back to multiple systems (marketing automation, CRM, Web site, mobile, etc.), which is not the ideal situation. There’s certainly a market today for this approach: Kwanzoo has landed about 25 clients since its launch in 2010 and seems to be growing nicely. Still, you have to wonder whether integrated platforms will eventually add similar capabilities tied directly to their own databases, making Kwanzoo’s external bridge less necessary.

Or, even more directly, will Adobe offer pretty much the same capability?  They already have the dominant tools for content-building (Dreamweaver, etc.) and Web visitor tracking (Omniture), which are the two key pieces of Kwanzoo's offering.  I long ago predicted that Adobe would combine these to create "smart content" that would adjust to customer behavior, although so far Adobe hasn't listened.  But they could.

But that’s Kwanzoo’s problem, not yours or mine, eh? At the moment, it’s worth a look. Pricing is based on number of impressions and starts as low as $499 per month to put Kwanzoo units on Web pages.  It quickly rises to $2,499 to embed units in emails, post data other than basic lead capture, support mobile formats, and use IP-address information for targeting.  

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Salesforce.com Announces Site.com Web Site Management: Will Marketing Automation Features Follow?

Salesforce.com yesterday announced the launch of Site.com, an enterprise-class Web site management system. The news didn’t seem to get much attention, perhaps because Salesforce.com itself pretty much buried it. But Salesforce.com VP of Product Management Anshu Sharma did post a detailed explanation of the rationale on a Salesforce.com blog.

My original reaction was “I told you so”, since I’ve been talking about the convergence of CRM and Web site management for years. (Here’s a piece from 2009.)  Sharma’s reaches a similar conclusion although he puts it in a larger context of social media (people expect to interact with a company Web site like they interact on social media), cloud,  and mobile computing (marketers need content that can be presented on all types of devices). So far so good, especially since multi-channel content is another trend I’ve been toying with for some time.  (Not that I'm bragging or anything.)

Just to clarify my argument, the case for convergence between CRM and Web site management boils down to the fact those are the two main systems that companies use to interact with consumers. The move closer as Web sites capture more individual-level information and present more personalized treatments. And, as the two giants converge, the marketing automation industry stands between them like a mushroom, waiting to be crushed or gobbled up (if giants eat mushrooms).

Some of that gobbling has already begun.  Web site management vendor SDL purchased Alterian last November and sales enablement vendor CallidusCloud bought LeadFormix in January. Ironically, speculation about Salesforce.com itself buying a marketing automation system had pretty much died down since last August’s Dreamforce conference, when the firm made it pretty clear they didn’t have plans in that direction (notwithstanding their earlier HubSpot investment).

That’s why I was greatly intrigued by Sharma’s statement that the transformations created by social, cloud and mobile technologies “can only bear long-term fruit and deliver on the full promise of a 'digital marketing platform' when marketing and IT are a true partners.”

 That’s the first Salesforce.com reference I can find to a “digital marketing platform”.  It certainly implies something that includes marketing automation functionality. Maybe the reason Salesforce.com decided not to purchase marketing automation system because they figured same functions would evolve organically from a combination of CRM and Web site management. That’s probably correct, although it would take longer than adding those features directly.

In any event, the combination of CRM and Web site management gives Salesforce.com an integrated database containing all the information needed for effective marketing automation. Building marketing automation features to exploit that information then becomes a lot easier than building a complete marketing automation system.  This applies whether the system providing those features comes from Salesforce.com or an AppExchange partner, and it means the barrier to entry is lower than ever.  In short, the Site.com announcement is big news for the marketing automation industry, whether people recognize it or not.

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BI Vendor QlikTech Reveals QlikView Pricing: I Modestly Help to Clarify

Business Intelligence software vendor QlikTech* officially published its price list last month, after years of keeping it a not-very-closely-held secret. I was personally pleased, since people occasionally ask me what QlikView costs.  But then I looked more closely at the list and realized I wasn’t quite certain what it meant. Happily, it didn’t take long to set up a briefing and clarify matters. Just in case anyone else is also confused, here’s what they told me:

- The lowest entry price for a fully functional version is $1,350. Although this is called a “Named User License”, it does NOT require connection to a server—the specific point I wasn’t sure of. What distinguishes this from the free Personal Edition is that the Named User License can read QlikView files created on other machines, while the Personal Edition cannot. Thus, a company could buy two Named User Licenses for $2,700 and those systems could share files back and forth.  Let me state clearly that as a confirmed QlikView fan, I think this is a terrifically low entry price.

- Companies with many infrequent users can purchase a “Concurrent License” that allows one user at a time for $15,000. This figure is so high that I thought it might be a typographic error, but QlikTech assures me it’s correct. In fact, they say it’s a bargain because they’ve found many clients can share more than 11 users on one license. These would be salespeople or other non-analysts who want to occasionally view a report. It seems to me that Murphy’s Law would ensure they all access the system during the same five minutes – presumably the evening before their monthly reports are all due – but I’ll take QlikTech’s word that this isn’t the case. After all, they're the analytical experts, eh?

- Companies who don’t want to spend $1,350 for casual users have some other options. These include a $350 “Document License” for one user for a single document, a $70,000 “Information Access Server” allowing unlimited users to access a single document (usually over a public Web site), and a $3,000 “Extranet Server Concurrent License” that allows one external user at a time to read documents on an $18,000 “Extranet Server”.

There are various other licenses for larger systems and special purposes. The descriptions are more or less self-explanatory, but of course you’d want to talk to QlikTech itself for detailed explanations.

One thing you definitely won’t find is a free or low-cost  “reader” licence that lets users view but not change a QlikView document. This is a disappointment to me personally, since we at Left Brain DGA use similar readers to send reports to our clients today. I can’t see those clients paying for Named User Licenses or Concurrent Licenses. But QlikTech is philosophically opposed to the idea of a limited-function reader, which it argues “goes against the current trend toward the democratization of software — in which line of business users can become as adept with an analytics tool as any business analyst or developer.” I can’t say I agree: QlikView takes considerable effort to learn, and many business users don’t have the time, need, or inclination to bother. They would be perfectly happy to consume existing reports without drilling any deeper, but are unlikely to pay $1,350 for the privilege.

I can’t judge how much business, other than mine, the lack of reader is costing QlikTech. Surely some people end up buying the full Named User License and using it as a reader, which makes up for some of the people who don’t buy at all. QlikView also has a strong argument that their total cost of ownership is lower than competitors, even at current pricing levels. The company grew 40% year-on-year as of its last financial report, so they’re clearly doing just fine with their existing approach.

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* QlikTech is the company, QlikView is the product

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SAS Unveils High Performance Analytics Technology

I spent the early part of this week at SAS’s annual analysts conference, where the company reviewed the past year and presented its vision for 2012. The story this year was simple: “big data”, and SAS’s “high performance analytics” approach to taming it.

Of course, “high performance analytics” is what SAS has always done and, like “big data” itself, the term is relative. What SAS specifically presented was a re-engineering of its core analytical procedures to run in “shared nothing” multi-processor environments.  Each data set is split into pieces that are loaded into separate units, processed independently and simultaneously, and then brought together for a result. SAS cited tremendous performance improvements, such as reducing the time to build a loan default model on a billion rows of records from 11 hours to 50 seconds. This obviously makes possible new, tactical applications.

The high performance architecture is becoming available in stages as each SAS procedure is rewritten to support it.  The change from a customer perspective is purposely minimal: existing SAS procedure calls are simply modified by adding a "HP" prefix.  This will make it easy for clients to take advantage of the new capabilities. 

The company revealed a just a few new products at the conference, most notably a Visual Analytics tool that uses in-memory processing to render billion-row data sets in seconds. But the real benefit of high performance will come less from new products than from using it with existing SAS procedures and tools. The SAS product that may benefit most of all is SAS Decision Management, which creates rule-based decision flows that can call on scoring models and other analytics to help guide tactical processes. The product itself isn’t new, but high-performance analytics will let it do new things.

SAS’s “big data” story also included Hadoop integration and expanded cloud deployments. By the end of March (if I understood the roadmap correctly), SAS will be able to read from and write to Hadoop data sets, embed Hadoop commands within SAS scripts, and send SAS metadata to Hadoop. Over the coming year, it will support cloud deployments through a variety of enhancements related to virtualization, open APIs, and eventually an app marketplace. The cloud-based initiatives also support SAS’s own on-demand business, which grew 57% last year to reach more than $100 million.

These are all positive developments for SAS, which must certainly support "big data" to remain relevant.  The new capabilities will also create some business changes as SAS competes more directly with companies like IBM and Oracle to embed analytics within operational processes. SAS itself noted the company is now more involved in architectural discussions of how its systems interact with the rest of the enterprise infrastructure. Other issues may include educating non-technical users and providing technology to protect privacy.  SAS leaders seem to think they can leave those issues to others, but I’m not so sure.

The conference produced little news directly related to marketing systems.  The company reports 38% growth in marketing applications – which it reports under the label of “customer intelligence” – so that is clearly a healthy business.  But the product road maps showed just incremental improvements of existing products, without any major new offerings. Again, high-performance analytics will make new things possible without other changes in the products themselves. The high performance version of marketing optimization is due by the end of the year.

If you want more evidence of how little attention was paid to marketing systems: SAS's biggest recent piece of marketing-related news, last week’s acquisition of online ad server aiMatch, got exactly one mention during the day-long presentation and was positioned as simply filling a small gap in the marketing product line. The company did announce, very casually, that aiMatch would be extended to include ad buying optimization as well as its current ad-selling optimization. That struck me as a pretty big deal, since ad buying is the heart of an already-huge industry that’s clearly the future of marketing. Then again, it’s also an intensely competitive, heavily-funded space that’s crawling with advanced technologies. Although SAS's high performance analytics could have a huge impact on ad serving, that won't happen unless SAS makes a major commitment of people and money.  We’ll see whether they make one.

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