BENCHMARK REPORT: Engagement Strategies for CPG Newsletters

For consumer packaged goods (CPG) brands, email marketing relays timely promotions, increases brand awareness, and deepens customer relationships. The proven value of a finely tuned email list drives CPG marketers’ continuous quest to aggressively grow quality subscribers.

With considerations such as database bloat and the threat to deliverability, there must be a clear delineation of “good and bad” subscribers, including the cost to capture them measured against their monetization potential. Too often, marketing teams find that their inbound channels do not have the capacity to meet expectations for volume or value.

DMi Partners - a full-service digital agency with a focus on email marketing and acquisition - recently executed a study to determine which early database acquisition and email strategies delivered - and retained - new, profitable subscribers. The results are captured in the five factors below, which maximize the long-term value of new subscribers and provide specific benchmarks.

The Study

DMi Partners analyzed new subscriber data from the email campaigns of 17 leading CPG brands to generate benchmarks and best practices. Three critical metrics were scrutinized in the study: volume, engagement, and effective cost per engaged subscriber. Statistics were collected from the performance of the welcome series sent to acquisition targets. Paid leads who opened an initial email and performed an engagement action were defined as early engagers. Over the duration of the study, DMi Partners facilitated the acquisition of over 21MM new newsletter subscribers for the participating CPG newsletters. The average CPG brand in the study acquired between 250,000-1,000,000 new subscribers for their newsletter.

Performance Benchmarks

1.) Early Engager Expectations The most valuable long-term subscribers acquired from the paid email channel are those who open during their welcome series. The treatment of these early engagers is directly linked to the long-term value of a subscriber. At the direction of DMi Partners, the CPG campaigns in this study developed aggressive thresholds for the number of opens during a specific duration in the early stages of a welcome series. A specific example from one study participant showed that establishing an average unique welcome series opener rate for paid email acquisition sources allowed the brand to make weekly source optimizations based on their welcome series sends, which yielded a minimum of 5% weekly increases in average campaign opener rates.

Benchmark: Based on the performance of the programs studied an average early engagement unique opener rate of new subscribers enrolled in a welcome series could be set between 18 and 35%.

2.) Continued Engagement Expectations After early engagers have been identified and segmented, CPG companies should continue to set thresholds to test if they meet continued activity standards. Like the expectations for early engagers, this benchmark should be set aggressively, as retained value is contingent on continued engagement. To accomplish this, personalized email experiences must be built to trigger custom experiences for all early engagers. One participant in the study developed a highly personalized email campaign for all engagers by creating different journeys that subscribers could enter into based on how they engaged with trigger emails within their primary content categories, which included: 1) coupons 2) recipes 3) news stories 4) health and wellness information.

Benchmark: 50%-60% of early engagers should continue to engage with ongoing daily and weekly newsletters, as measured by engagement within the last 30 days for subscribers 12+ months after subscribing.

3.) Removing Non-Early Engagers If CPG companies follow the above recommendations and aggressively test the initial and continued engagement, significant portions of the list will be identified as non-early engagers. This should not be considered a deficiency: subscribers failing to meet aggressive testing thresholds are an expected element of any acquisition campaign. This is especially true for subscribers in paid acquisition campaigns.

Once under-engagers are identified, they should be removed from ongoing email sends to maintain a clean sending reputation and ensure inbox delivery to the engaged subscribers. While these purges might feel counterintuitive to marketers seeking to reach large audiences, it is important to resist the temptation of retaining marginal performers. These recipients can be entered into re-engagement flows and targeted through other digital channels (programmatic, social, etc.)

Non-early engagers can still be utilized for future email marketing if the brand has a reactivation campaign built. One participant in the study executed a reactivation campaign 90 days after an under engager was removed, sending a reminder email to highlight content the subscriber had missed out on. Under engagers who open reactivation emails can be brought back onto the primary email list for the engaged subscriber experience. However, their engagement activity should be closely monitored to ensure adherence to expectations.

Benchmark: 100% of under-engagers (new subscribers who have not opened the welcome series) must be cut from the email program within 30 days but can be re-directed into other engagement efforts.

4.) Cost Efficiency Metrics While email subscriber engagement quality and acquisition volume were important to the participants, they did not tell the complete story of campaign success. Like all marketing channels, the cost was a key factor in evaluating the viability of the campaign. Despite all study participants being within the CPG industry, the KPIs used to measure email effectiveness varied based on whether an email was used to drive eCommerce sales, promote brand engagement, share industry news, support their retail partners, or some combination of those initiatives.

As such, the KPIs that participants use to evaluate cost-effectiveness generally fell into three different buckets:
1) the effective cost of each new email subscriber added to their list
2) the effective cost of each new email subscriber that achieved their engagement KPI
3) the effective cost per new first-time purchaser, or conversion when trackable.

Benchmark: The following effective cost ranges are broken down by the most typical early engagement KPIs our CPG participants used for their paid email acquisition pilot:

• Effective Cost Per New Subscriber:
  • $.40 to $.60 goal
• Effective Cost Per Engaged New Subscriber
  • $1.50 to $2.50 goal
• Effective Cost Per First Time Purchase
  • $100 to $500 goal

5.) Maximizing ROI With a clear awareness of core profitability metrics, CPG companies will be ideally situated to drive acquisition success. Understanding early engagement thresholds, and their relationship to profitability, empowers CPG marketers to efficiently fine-tune budgets towards the acquisition sources that consistently produce early engagers who meet rigorous standards. This allows programs to optimize for scaling acquisition volume while monitoring performance and responding to shifts in subscriber behavior.

Benchmark: Over time, additional longer-term engagement data is layered on top of the early engagement KPIs to optimize for sustained engagement. Below are some of the most common metrics utilized:

• Average Open rate in last 30 days
  • 3+, 6+ & 12+ months after acquisition
• Active Rate (Opened 1+ emails in last 30 days)
  • 3+, 6+ & 12+ months after acquisition
• “Platinum Tier” rate
  • % of subscribers that opened 15+, 20+, 25+, etc.

Study Takeaways

The data captured and analyzed during this study demonstrates the importance of:
• Defining thresholds for welcome series expectations
• Aggressively testing for continued engagement
• Removal of underperforming subscribers from the list
• Targeting realistic cost efficiency metrics
• Understanding engagement levels to adjust accordingly

The best practices to maximize the value of paid email acquisition are simple to understand but difficult to execute. Focusing on opt-in subscribers that engage quickly with your emails, while simultaneously moving the non-early engagers into reactivation campaigns is an effective method of lifting long-term open rates. Similarly, leveraging welcome series open rate reporting from your ESP on a frequent (weekly) basis can allow you to make straightforward source optimizations to maximize your welcome series opener rates.

About DMi Partners

DMi Partners is committed to facilitating acquisition strategies to accomplish scale, quality and consistency for their clients. Their highly accountable email programs establish an immediate proof-of-concept, including a revolutionary Cost Per Engaged Lead structure that allows brands to budget to the exact spend needed to achieve their subscriber growth email engagement goals.

In 2020, this team delivered publishers over 10MM new subscribers while achieving all cost per engaged lead benchmarks. DMi also managed email acquisition programs for over 50 of America’s leading consumer brands in 2020. Those campaigns will generate over 19.5MM exclusive first-party opt-ins collectively.

DMi’s database acquisition and email marketing teams work collaboratively to design subscriber acquisition and growth marketing. Focused on promoting client growth by uncapping the potential of their email marketing programs, they excel at engineering opt-in campaigns that allow brands to significantly expand their marketing reach and best communicate with their target audience. Learn more by visiting dmipartners.com or contact info@dmipartners.com.

About the Author Rebecca Donahue - Associate Director of Accounts, Database Acquisition at DMi Partners - works closely with Fortune 1000 companies to grow their consumer database while focusing on long-term profitability and consumer engagement. Focused on promoting client growth by uncapping the potential of their email marketing programs, Rebecca excels at engineering opt-in campaigns that allow brands to significantly expand their marketing reach and best communicate with their target audience, continuously connecting and evolving with clients to help them achieve their goals and position them for greater success.