Do you know where your revenue comes from? If you do, great. And if you don’t, you definitely should. Revenue attribution is an important metric that can help you make smarter decisions for your ecommerce business—including profit optimization and cost minimization—and focus your efforts on what works best.
Email + SMS revenue benchmark
Email marketing is widely known as an essential channel for ecommerce businesses. Now that SMS marketing is becoming standard practice (and something that customers expect), you can view both SMS and email as a single channel within your marketing mix. Across this “combined channel,” you can and should run synchronized and parallel campaigns.
A healthy target is to have 20-25% of total revenue coming from email and SMS marketing. The top end of this range, however, is by no means the limit. The most successful ecommerce brands make between 30-35% of their revenue from email on a regular month, and up to 50% and 60% during Q4 holiday sales.
Here are a few email and SMS revenue benchmarks (% of total store revenue) to measure against:
- Good: 20-25%
- Great: 30-35%
- Great in November: 50-60%
Too much of a good thing?
If more than 50% of your revenue comes from email & SMS outside of Q4, that’s great news and means you have an incredibly valuable, engaged subscriber list. What you might not realize is that it also signals it might be time to invest in new marketing channels! People clearly love what you’re offering, so invest time in expanding your reach and bringing in new customers to your community.
Here are some ideas for new channels to investigate:
- Organic social media. It’s clear your community loves and is loyal to your brand, so social media could be a strong place to invest your efforts and build even more brand awareness. Look at metrics such as follower growth and engagement, as well as other key metrics for the channel. Utilize the business and seller tools available, many of which are designed to help customers make an easy purchase right from a post. Having success on one social channel? Great! With so many social channels integrating commerce into their platforms, maybe it’s time to try your hand at a new one. With any of these avenues, working with a creator or community manager can make a real difference, especially if social is not your existing team’s area of expertise.
- Paid ads can be an asset. And working with an ads expert can really help you realize revenue goals while sidestepping expensive mistakes. Whether you pair up with a pro or not, you’ll want to know if your current ads are performing well and, if so, which audiences and types of ad campaigns have been most successful. What are the click-through rates, conversion rates, and associated customer acquisition costs (CAC)? If your metrics look good, invest further in your ads. Not getting the results you want? Troubleshoot with the help of someone who knows what they’re doing.
- Search Engine Optimization (SEO). Make it easier for your customers to find you on the internet with SEO. While it takes time for SEO efforts to pay off (4+ months)—this includes consistent content creation and posting, and backend optimization on your website—it can really make a difference long-term. SEO is both an art and a science and is totally approachable when you apply simple best practices. Start with the SEO tools that are already built into your website platform, then do some work to understand your customer and how they search on the web. This will help you think about how and why they might search for something and be satisfied to find you like their answer.
Automated workflow revenue vs campaign revenue
Besides tracking overall revenue attribution, look at the specific metrics of the different campaigns you run.
Within email and SMS marketing, look at your automated workflows (Welcome Series, Abandoned Cart Series, Post-Purchase Series) as well as your individual campaigns (sales and promotions, newsletters, product features, content, etc). The top-level split you want to examine is automations versus campaigns, and here’s what you want to aim for within each:
Automation revenue benchmarks (as a % of total store revenue):
- OK: 8% (campaigns 12-15%)
- Good: 10% (campaigns 10-15%)
- Great: 15% (campaigns 5-10%)
The reason you want at least 10% of your revenue coming from automations is that this revenue is automated. This gives you peace of mind since you know that as long you get traffic to your site, your popups and automated workflows will take care of converting those visitors into customers.
So long as you set up the fundamental emails we covered earlier, you should be able to achieve 10% of your total revenue from automations.
And remember, you’ll still want a healthy percentage of your revenue coming from campaigns. While workflows take care of active website visitors, campaigns engage both old and new subscribers on your list. You’ve worked hard to get those people on your list, so not engaging and converting them through campaigns would be a missed opportunity.
The benchmarks we’ve listed above are a good way to gauge whether or not you’re doing what’s needed to optimize the performance of both campaigns and automations.
Highest revenue-generating workflows
Typically, the following automations will be your highest-performing workflows (in this order):
- Welcome
- Abandoned Checkout
- Browse Abandonment
- Post Purchase
From time to time, automations 1 and 2 might swap places, as will automations 3 and 4. It all depends on what discounts you offer in either series, how many emails you send, and also how much your product is set up for repeat purchase behavior (food items vs apparel or shoes, as an example).
Even though Post Purchase is listed as #4, do not neglect it. Post-Purchase automation is essential to building the foundation for strong customer retention, and retention is what will make or break your business.
Onward to automations, campaigns, and more revenue
Now that you have a little more insight into revenue—including how to increase it without too much effort or cost—it’s time to put some things into motion. Like setting up all your highest revenue-generating workflows (see enumerated list above) in order to squeeze the most out of your marketing efforts. Keeping your campaigns firing (remember, these engage both old and new subscribers). Utilizing SEO, paid ads, and organic social media (if you haven’t already). And measuring your progress against some of the benchmarks shared in this lesson.
Regardless of where you start, the point is that you do. And when you do, know that we’re here for you, we believe in you, and we can’t wait to see you grow your customer base and your revenue even more.