Is your nonprofit email marketing effective?
How do you prioritize which aspects of email marketing you should improve?
How does it compare to other nonprofit email marketing efforts?
How do you know?
Today I want to share with you two recently published benchmark reports that will give you some insights into the effectiveness of your nonprofit email marketing.
I will also discuss the purpose of benchmarks, how they can help inform your decision-making, and I will highlight some of the limitations of the data.
What should you measure?
As you may recall, the primary goal of your email marketing is to create raving fans of your organization, not just donors.
So how can you tell if your email marketing is achieving this end?
Think about the behavior of your raving fans.
What would they do every time they received an email from you?
They’d open it and read it.
The percentage of your email list that open your email messages is called your open rate.
What would they do after they read your email?
They’d click on the link you gave them in your call to action.
The percentage of your readers that click on your call to action is called your click-through rate.
These are engagement metrics and help give you a sense of whether or not the people in your list are interested in your emails and participating in your call’s to action.
The higher these numbers, the more engaged and interested in your email marketing are your subscribers.
There are quite a few other things that I’d recommend you measure, but these are the two key metrics we will discuss today.
What are benchmarks and how should you use them?
Benchmarks are used in data analysis to help you understand how well you perform when compared to other nonprofit organizations.
They provide a reference point.
Let’s look at open rates for a quick example.
Say your organization has achieved an open rate of 34%. How should you feel about that?
This number by itself really doesn’t tell you all that much.
You might wonder,
“Why aren’t 100% of people opening our email messages? Didn’t they all sign up to receive our emails? Are we doing something wrong?”
This is where benchmark data comes in handy.
This is the open-rate data reported in the Silverpop 2015 Email Marketing Metrics Benchmark Study:
Now how does your open rate look?
According to this study, the average open rate for the entire nonprofit sector was 27.5%. Now your performance looks a whole lot better, doesn’t it?
Having data is extremely important, but understanding what the data means is just as important and is one of the reasons benchmarks reports are so helpful.
They give you a measuring stick that can be applied to your results.
Do you want to be average?
One common mistake that comes from focusing too much on average benchmarks is that we tend to think if we are meeting the benchmark then we are doing just fine.
Well, sure. Maybe, there is no cause for alarm…
if you only care about being average…
If it doesn’t bother you that 50% of nonprofits are still outperforming you.
But, if you want to be great, then you should aim to achieve a lot higher than just the average benchmark score.
This is why I appreciate benchmark reports that also show the scores of nonprofits in the top quartile of the study.
This is where you want to be. If your scores are higher than 75-99% of all other nonprofits then you are in good company. You are a leader among nonprofits.
Meeting the average benchmark may be an important first step, but don’t settle once you get there.
Don’t settle for average.
Taking our example from before we see that our open rate of 34% is better than average. That is good news.
But we also see that the top quartile of nonprofit is able to achieve at least a 48.1% open rate.
If you want to have a great nonprofit email marketing system, then that is the number you should be aiming to beat.
That is the number to achieve is you want a community of engaged fans.
Limitations of the data
There are numerous limitations to the data available to nonprofits when it comes to email marketing metrics. These limitations do not discount the data, but we need to be aware of them when making decisions.
The biggest limitation in much of the data is that Nonprofits are often labeled as one category, even though they work in multiple sectors each with their own results and averages.
Take the data above. As you can see, nonprofits, associations and government emails are all combined.
Do we really want our engagement metrics combines with those sent out by the government?!
This is unfortunate and makes it difficult to determine what the benchmarks are for your specific sector and type of nonprofit.
I also want to point out that sample size is an important consideration when reviewing data.
While I love the M+R Benchmark Report and I will always look to their data and analysis for insights, I know that their benchmark report is based on the results of only 105 nonprofits.
This is a relatively small sample size and means their results, while valid, may not be ideal for making broader generalizations.
For example, Mailchimp updates their metrics monthly and publishes the averages on their website.
(Click their name if you want to see their average benchmarks.)
They have a substantially larger sample because they are reporting data from all nonprofits that use their service and have at least 1,000 subscribers.
Silverpop, an IBM company and email marketing service provider, also analyzes the data from their users and publishes a benchmark report.
They have a sample of about 750 nonprofits.
Let’s see how their sample size affects their results…
Mailchimp’s June 2016 average open rate for nonprofit email is 25.13%.
The Silverpop 2015 benchmark report shows an open rate of 24.7%.
The M+R Benchmark report shows their sample with an average open rate of just 16%.
The large difference of the M+R report is most likely a result their smaller sample size.
Interestingly, this also suggests that the nonprofits participating in the M+R study are not meeting the average benchmark set by the much larger pool of nonprofits in the other reports.
Or maybe having government grouped in with nonprofits actually increases the open rates. How many emails do you think go unopened from the IRS anyway?
It’s difficult to tell without a comprehensive list of organizations in the Silverpop report.
Please understand that I am not knocking the M+R report and I hope you all download and read this report.
There are many ways in which the M+R report is actually better.
Their report is focused solely on the nonprofit industry and they do break out their results by sector and type. This is extremely valuable.
They also provide data on a lot of metrics important to the nonprofit sector and provide very compelling analysis.
- Engagement metrics are the key to understanding the effectiveness of your email marketing
- Benchmarks provide a reference point that allows you to understand your performance
- Don’t settle for being average
- All data has limitations. Take the time to read through the reports and understand their limitations so you make sound decisions
Here’s links where you can access the full reports. They are both worth reading.
Keep doing good work,