The Open Rate Paradox: Why Higher Open Rates Equal Lower Revenue

Angela Cheong
Dec. 9, 2013 by Angela Cheong

If you’ve read about The Open Rate Paradox as championed by Dela Quist and Alchemy Worx, you’ll be familiar with the rallying cry of sending more relevant email. Most email experts get up in arms about the topic of email frequency, with both sides arguing the pros and cons of sending more.

At Interact 2013, we were able to hear from Dela Quist himself, who started off with an overview of demand response marketing versus demand generation marketing. While demand response marketing is based on giving the customer what you think they want, demand generation marketing is based on making the customer want what you have.

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Are Email Marketers Leaving Money On The Table?

Anyone without an email address is the digital equivalent of being homeless. If you ask people if they want more email, they will say no, but if you ask people for preferred communications channel, they would say that it was email. Sell to them, because that is what they want you to do. Most brands reach more qualified customers and prospects via email than TV. Perhaps a reluctance to sell is based on email marketers being filled with fear and self-loathing because of the negative image of the industry.

“Engagement is like having a deaf blind canary in a coal mine”

Understanding the nature of engagement is key to email marketing success, yet many people who talk about engagement have no measurable goal.

79% of people who receive email do nothing with it, and only 1 in 2,000 people will mark your email as spam. A particular client’s cost of stopping an unsubscribe was $400, while the cost of acquiring a new customer was $5.  New people on your mailing list are most likely to open emails and transact with you.

According to Dela, marketing emails have a far higher chance of getting into the inbox at 95% and open rates increase on days of higher email volume. He advises companies to hire someone specifically to grow lists, as that is the easiest way to grow revenue – and to fire them if they fail. Two other tactics for growing revenue? Segmentation and increasing email frequency.

“Anyone who doesn’t send an email to their entire list once a week is dumb”

Email drives sales in other channels. Send an email with a different subject line to people who didn’t open it the first time – it can lead to a 40% lift in open rates. Dela says that 80% of email marketers use batch and blast because it works, and also introduces the concept of The Nudge Effect, where subject lines tend to influence people who do not open their emails. Being in the inbox is important, even if emails aren’t opened. It is important to understand that every email you send is affected by the one you sent before and the one after. While 90% of emails are opened within 24 hours of sending, only 15% of purchases may take place then, with the revenue possibly being generated days or months after deployment.

At Alchemy Worx, it is a policy that every email sent is a re-activation opportunity.  You can’t re-engage with an email you don’t get, and businesses with the highest frequency sends have the most engaged database. Deliverability begins and ends with the quality of your data, but marketing should not be driven by deliverability issues.

As always, Dela’s talk was a firecracker of a session inviting rebuttals from the audience and great debate. If you’d like to find out more about the issues that he highlighted check out his book:

Looking to increase your email frequency? Troubleshoot your deliverability issues first with our guide on How To Send Zillions of Email A Day!

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