E-mail: if you build it, they won't come

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By: Wise Marketer Staff |

Posted on March 14, 2006

An e-mail list's size has become one of the best indicators of e-mail response rates, including both open and click-through rates, according to a study by on-demand e-mail service provider ExactTarget. But the relationship is not what you might expect.

According to the ExactTarget 2005 Response Rate Study, there appears to be an inverse relationship between list size and e-mail responsiveness. According to the study, open and click-through rates both decrease steadily as list size increases. The study took into account data collected during 2005 from more than 4,000 organisations, 230,000 email campaigns, and some 2.7 billion e-mail messages.

This phenomenon is one of the strongest cases for audience segmentation, according to Morgan Stewart, director of strategic services at ExactTarget, and author of the study. The smaller the targeted audience, the better companies can aim their e-mail campaign messages directly at their subscribers.

Businesses more responsive
The study also found that organisations with a B2B (business-to-business) focus experienced higher open and click-through rates than their B2C (business-to-consumer) counterparts.

This, Stewart says, can be partly explained by the average size of lists to which these organisations send e-mails. More than half (52%) of B2B e-mail campaigns were sent to lists of less than 1,000 subscribers, and only 5.6% of B2B campaigns were sent to lists of more than 10,000 subscribers. Compared to the 41% of B2C campaigns that went to more than 10,000 subscribers, the inverse relationship between list size and responsiveness holds true.

Key findings
The downward trend in open rates by list size stabilises at a 15%-20% average open rate when reaching 400,000 to 500,000 subscribers. At this point, the target audience appears to be of such a size that adding names to the list does not have a significantly greater negative affect on open rates.

However, the study found that the downward trend in click-through rates is less predictable. While this trend still exists, there is more variability in average click-through rates at higher volumes. Estimation models based solely on e-mail volume are not particularly accurate, suggesting that the creative and content management aspects of an e-mail campaign play a crucial role in its success.

"The larger the list, the more important it becomes to have compelling visuals and offers," said Stewart. "With larger lists, it is much more difficult to drive significantly higher open rates than normal. This is due to both list fatigue inherent in larger lists and the reality that it is difficult to convey compelling and relevant messages to a large audience through the subject line."

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