#35. How To Measure The Success Of Your Email Marketing: Klaviyo Benchmarks | Podcast

Vira  0:00 

We are super happy to have a really cool guest today, and today we will be talking about benchmarks.

Vira  0:30 

Hey, everyone. It’s Vira from Email Einstein Podcast. I’m an email marketer at an email marketing agency called Flowium. Me and my team, we are super passionate about email marketing, and because we love what we do, we want to share our insights with you. Flowium is one of the fastest growing email marketing agencies in the world, and we specialize in providing a premium, full service e commerce email marketing experience for all of our clients. Our services are tailored specifically for your business and are designed to help you increase your online retail revenue by 20 to 50. That’s five 0% Our motto is delivering the right message to the right person at the right moment. As Peter Drucker once said, what gets measured gets managed, and that’s something that we believe here in Flowium strongly, we cannot agree more with Peter Drucker, and there is no way really to create a profitable email program without being able to measure the effectiveness of what you do. And today, we have a very special guest from Klaviyo who will talk about how to measure whether or not your email is helping you to hit your goals.

Vira  1:59 

Jon Palmer as a product marketing manager at Klaviyo. He’s my fellow West coaster, or at least for now, he’s an early employee at Hylete, a digital native fitness apparel brand, and he actually learned all things email marketing when he first started working with that company. But right now, Jon is working with Klaviyo, and that makes me super, super happy, because he knows everything about benchmarks, about measuring your success with email marketing and yeah, and today, Jon is with us. So happy to have you on this podcast. Jon, how’s it going?

Jon  2:38 

Doing really good. Thank you. Yeah, I’ve kind of walked the walk with a lot of the people, I’m sure, listening to this podcast, having been on an E commerce brand and try to run, you know, email marketing and grow that business. So excited to talk about how we’re going to do that.

Vira  2:53 

That’s awesome. Well, we have like, a gazillion questions to you, so be prepared. But before we go that, before we go there, let’s do a quick Q and A like a quick blitz question session, something similar to what vog does in their in their YouTube videos, just to get to know you better. Okay, East Coast or West Coast?

Jon  3:14 

West Coast, my place in San Diego.

Vira  3:17 

Yep, yep. I’m on the same page with you here, Jon, West Coast, all the way. Plain text, email campaigns, yay or nay?

Jon  3:19 

I’m gonna say nay. I think you’re leaving something up on the table if you don’t use all the medium available to you.

Vira  3:32 

Right, right. Who would play you in the movie?

Jon  3:36 

I’ve gotten the lead singer from Coldplay as my, you know, celebrity doppelganger. So I can’t remember his name, but that that guy.

Vira  3:42 

Oh, that guy. It’s a good, good start. Good start. Favorite show on Netflix right now, if any?

Jon  3:49 

Ooh, there was one over the summer about the mob in New York City when it was coming up in the 70s. That was, like a three hour documentary. It was captivating. I think it’s called fear city. So cool. It’ll like you can bang that out in a weekend.

Vira  4:06 

Nice, nice Club house, yay or nay?

Jon  4:08 

I don’t know if I know what clap house is.

Vira  4:11 

Clubhouse is a new social media. Very, very popular, very elite. You can only get there by invitation. Remind me after the podcast.

Jon  4:22 

I guess I just answered your question.

Vira  4:24 

Yeah, it’s a pretty cool little social media. They just launched, like, a few months ago. But yeah, the idea is that you have this private almost like a podcasting rooms, or like zoom, like zoom has, but you can only get there by invitation, and it’s very, like, exclusive. And, yeah, there’s, like, a limited amount of people.

Jon  4:46 

Score an invite after this call.

Vira  4:48 

Yeah, cool. If you had to describe yourself as a food, what would you be?

Jon  4:24 

I’m blanking so I’m going to say a burrito, because I really enjoy those down and down in San Diego.

Vira  5:04 

Yeah, very west coast of you here, yeah, burrito. It’s a good it’s a good start. Well, tell us a bit more about yourself. What originally brought you to email marketing, how it all started?

Jon  5:12 

Sure. So I was the original event guy for a company called Hylete that does fitness apparel out on the West Coast, and I did 30-40, weeks, you know, on the road, going to different events and fitness expos and highly really embrace what kind of an all in on digital marketing and E commerce in 2014 and they said, you know, we’re kind of eliminating your position, but if you want, we’ve got this email thing, you can try to make something out of that. So that was where I inherited email and, you know, started hitting some some industry benchmarks there and doing a little better. And eventually took over, you know, more and more of the SaaS and kind of learning the framework eventually became the Director of Marketing there with, you know, obviously a team and agencies and multiple SaaS vendors to manage. So I, you know, I’ve seen it go from the start zero all the way up to, you know, 10 plus million.

Vira  6:07 

Oh, that’s exciting. That’s exciting. And that’s why I’m happy to have you on this podcast today, because, you know, this topic from inside, because you were on the different sides of that wall, sort of thing. You worked with email before us, and now you’re developing those products. So that’s exciting.

Jon  6:22 

It is really exciting. I’ve there’s been quite a few product launches in my short time at Klaviyo where I’m just saying, Oh, damn it. I wish I had this when I was on the other side of the fence. So I’m really excited to talk about it.

Vira  6:33 

When did you start working like with Klaviyo?

Jon  6:35 

November, 2020, so we’re three months in now, but there’s I have to give before we talk about benchmarks, I have to give a shout out to the data science team. That’s, like, doubling every year in terms of headcount over at Klaviyo, they’re, they’re just banging up some awesome features.

Vira  6:53 

I mean, that’s what I like the most about Klaviyo, is how good they are with data, with, like, analyzing it system, like making it into the systems, yeah. I mean, the platform probably must have changed a lot ever since you started like using it, right?

Jon  7:08 

I mean, we, I’m not gonna lie, we at, when I was at highly, you know, maybe 2015 2016 we were heavily evaluating other platforms, and Klaviyo really stepped up and developed a ton of new features. But, you know, I was on a ton of sales calls with other brand or other ESPs and automation tools. So, yeah, I can honestly say, from experience that that they’ve kind of stepped up from where it was when I first was a customer back in, you know, 2014.

Vira  7:42 

Yeah, yeah. That’s awesome that you were both customer and now you’re developing that stuff. Yeah. So we do have a lot of questions to you, so let’s talk some benchmarks. That’s the reason why we have you on this podcast today. You’re probably the best person to talk about the benchmarks. So a benchmark, guys, for those of you who don’t know how it works, by dictionary definition, benchmark is a standard or a point of reference against which the things are compared. So when it comes to email marketing, there are a bunch of different metrics to track. Jon tell us a bit about those metrics. Are they the same for everyone, and how can they be different depending on your goals with your email marketing?

Jon  8:27 

Yeah, absolutely. So I think the first place to start is looking at when we talk about benchmarks, you obviously need to compare to something if you’re a brand, how do you compare either against your own past performance, or you need to go look at blog posts, or, you know, talk to agencies that maybe manage multiple brands and try to get some sort of insight. But nothing I’ve found out there kind of in the world is as granular as it needs to be to kind of take actionable insights, because you want to actually compare, you know. And we’re talking about metrics Now, open rate revenue per recipient, click rate, you know, all those things that are important for email. You want to have those compared to brands that are similar to yours. And the nice thing about Klaviyo, I’m just pulling it up right here so I can, so I can rattle them off. We look at how often you send a campaign, your average item value, your revenue, percentage that comes from email, how fast your business is growing, and your total revenue per month. And so we look at your business data as a Klaviyo customer, and then go out and find 100 similar brands and then compare you to those similar brands that kind of have similar crate evaluation criteria as well as your industry. So hopefully, if we pick the similar 100 similar companies to yours, you’ll actually be able to say, Oh, wow. How my open rate could be better. Other companies, just like mine, are getting better results. This is where I should be spending my effort. And the whole goal with benchmarks is to compare that data find out where you’re excelling, but more importantly, where you have that opportunity for growth.

Vira  10:16 

Right. And are there any metrics that are more important than others, and how to how to decide which ones are the most important for my particular brand.

Jon  10:27 

I think you’re going to be hard pressed to find a brand that doesn’t save revenue. Is the most important metric, right? I know, you know, we give you a ton of metrics to look at, but I think everyone’s eyes are going to be drawn to, you know, the average order value, the revenue per recipient, the average number of items per part, you know, all those things that really tie back to, well, if I can grow my AOV or grow, you know, my conversion rate, I’m going to be able to, you know, hit my numbers or exceed my numbers without having to go spend more money on Facebook or, you know, acquiring new customers.

Vira  11:03 

Yeah, and this are the metrics that I usually obsess the most over. Obviously, that’s the main thing. But what about the other metrics? Are there any metrics at all that you don’t need to obsess over, like, again, if any.

Jon  11:17 

Right. I mean, this is, I don’t know how many the listeners are Klaviyo customers, but one, one thing I’ll point out is, you know, we tell you on how you rank compared to other companies. So we’re going to tell you, hey, of the 100 similar companies, you’re 80 out of 100 or 25th out of 100 but that doesn’t necessarily tell you if your metrics good or bad, it just tells you how you’re doing compared to other companies. So, you know, there is a little bit of sanity checking you need to do where we might say, Oh, your, you know, unsubscribe rate is, you know, is really bad compared to 100 companies, but it might still be good, you know, for you. So there’s just, like, a little grain of salt to be taken, but it’s obviously way more insight than you’re getting anywhere else.

Vira  12:04 

Right, right. And you guys just introduced that new benchmarking system back in when, like, December or something, right?

Jon  12:11 

Yeah, I think it was. It just got done the week of Christmas or something.

Vira  12:14 

Yeah, we’re still, like, we’re still learning about it. So, how is it different from good old just like a data. How is it different? What makes it cool?

Jon  12:25 

Yeah, I think the fact that we’re comparing, we’re picking brands and comparing your data to theirs, and being really transparent about how you stack up and identifying those opportunities is awesome. I hammered that already, so I won’t talk about that anymore, but we actually update benchmarks on a monthly basis. So if you think about covid Going on last year, right, if you’re comparing your you know, July of 2020, to your performance, July of 2019, you know, everyone’s open rates up. Everyone’s ecom performance is up. So it does not really a good indication that of how things are going. But if you can say, hey, here’s 100 companies similar to mine, and here’s their numbers from January of 2020 Are they growing faster than I am? Could I be putting, you know, should all these new customers I’m acquiring, or opt ins I’m acquiring for my list? Are they opening at the rate they should be right? So having that like month over month, instead of having to go look at a blog post that recaps month or yearly trends, your ability to kind of take actionable insights is so much better.

Vira  13:33 

Right. And what I really like about this new feature that instead of looking at like all flows, or like all campaigns together. Now, Klaviyo like breaks out your most important flows, like individually, so you can, like, compare them to like similar flows across like the industry, across similar brands. So I think this is, this is a really cool little feature, yeah. But what about the good old benchmarking against your own past performance. Would you recommend brands still doing that? Or is it not relevant anymore?

Jon  14:07 

I think it’s relevant if you don’t have a better option. But I think what Klaviyo has built here is definitely a better option, right? You know, just the fact that you’re I’m trying to organize my thoughts here, because, I mean, there’s so much to say about it, and I don’t want, I don’t want to knock anyone who’s, you know, looking at past performance, because that’s what I did years so that’s why I sort of hesitate, right? But I think the covid example I just gave is one of a few where you can be led astray measuring against past performance. You know, the 2020 Black Friday is probably drastically different than your 2019 Black Friday, and your company’s different too. And like think about how much your company’s goals change in a year and all that stuff, it’s just to know how you’re doing compared to these other brands. It is a whole new level of insight.

Vira  15:03 

Right, right. Okay, case study, for example, I’m a small business owner. I have a small beauty brand. I’m like in the health and beauty industry. Does that mean that I will be benchmarked against those like big dogs of E commerce, like L’Oreal or Covergirl or the company who have been like on the market for years, versus me being like on the market for like, a few months. So how do you guys, like pick that group that I will be benchmarked against?

Jon  15:34 

Right. So first we are going to look at industry. So one, you know, because that’s important, you know, we don’t want to be benchmarking people who are selling luxury couches against people that are selling bags of coffee like that’s just industry is important. Then diving into, you know, average cart value, you know, you could have, I’ll keep using that couch example. You could have a $5,000. Or maybe mattresses are a good example. You have a $7,000 mattress or a $500 mattress. Should those companies be benchmarked against each other? Maybe not. So we actually take into account, you know, average item and cart value, and then how big the company is revenue wise. So if you’re a $2 million brand, we’re not benchmarking you against, you know, the Nikes or the l’oreals, or any of these giants out there. So might not be realistic to, you know, benchmark against Nike’s open rate or engagement, or maybe you’re actually doing way better, but I think I’ll just like hammer that example a little bit. You might say, let’s say you’re in the apparel space like I was, and you see that the industry average open rate for apparel brands in E commerce is 25% and you’re at 32% you might say, Okay, perfect. I don’t need to work on open rates anymore. Like that’s I’m already way outperforming the market. But then you actually see that of the brand, similar to yours, they’re getting open rates of 45% like, that’s going to tell you that you need to take those action items to AB test more and to, you know, you know, put emojis in the subject line, or some of those little things. But same thing for average cart value. You know, should you be trying to get people? If you’re, if you’re getting two items on average in your cart, but every other company similar to you is getting three like, maybe you need a modal or something on your cart page to incentivize people to add another item because you know, they’re willing to.

Vira  17:32 

Right. What about those brands who are selling like, unique products? Obviously, to each business owner, their brand is very like special and unique, but still, what about the brands that are selling something that no one else almost is selling? How can I be sure that the benchmarks I’m seeing in Klaviyo are like appropriate for me.

Jon  17:52 

So, and that’s that’s the exact reason why industry is only one point that’s factored into choosing apear group, because, you know, there are those unique brands out there. So let’s compare you to brands that are growing at a similar clip, are sending emails at the same cadence. So that would be and then we’re also transparent about it too, you know, we show you what your numbers are and then the range that your peers fall into that we’ve chosen. So that’s pretty cool, that it’s not this black box. Hey, we chose 100 companies, but we’re not going to tell you anything about them. You actually say, Oh, wow. Okay, so I see how my peer group was chosen, versus, you know, us just giving you a number and making you trust us.

Vira  18:39 

Right, right. And that’s what I like about the Klaviyo, is that Klaviyo actually almost like personalizes benchmarks to your brand, like specifically. So, yeah, that’s something that I definitely like about them. I’m just like looking at some of my accounts, and you guys just released the January 2021 reports, and I love them. But there is this part that is very like depressing to me. You know, like, when you’re going to the almost like a recommendation stuff, it says, like, poor, the status is poor. And, I mean, I’m comparing it to good old blogs. And according to that blogs benchmarks, it’s like, still considered to be, like, a good open rate or good click through rate. But in this case, because it’s so like specific, it basically pinpoints directly what you should work on. So I’m not a fan of this red exclamation marks, but hey, they work. So thanks so much.

Jon  19:33 

Right. Well, that’s, you know, we’re going to tell you where you’re kind of falling short compared to your peer group, right? But that’s also where there’s the most gains, where you see that green checkmark, where you can say you can be really confident, you can go to leadership or management and say, Hey, right? We’re crushing it here, right? Like, hey, you know, I remember going through this with my boss, the VP of marketing. We were trying to figure out which flow. Those we should spend time improving. And, you know, we’re getting some flows, you know, 40, 60% open rates and, you know, or click rates that are, you know, two or 3% is that good? I don’t know, because the welcome series and the Thank You abandoned cart flow, these are all different with they’re all different numbers. So actually seeing, and you mentioned it earlier, each flow broken out, or what the, you know, open rate, click rate, revenue per recipient rate should be for these high converting, you know, revenue driving flows is so crucial to actually guiding like and prioritizing your projects.

Vira  20:40 

Right, right. That’s, that’s pretty cool. I mean, I, I’m still learning a lot about this reports, but they are definitely super, super helpful. So how do I almost, like, personalize those e commerce benchmarks to my business? Like, what can I do about it? Yeah, again, if I’m like, in a very, if I’m like, selling very, very unique, say, product, how can I personalize that benchmark thing?

Jon  21:05 

So I mean, they are, they are personalized in that you know, your real time data that’s Flowium from your E commerce site and your Klaviyo account are impacting your peer group. And then you know those, when you see those statuses of either poor or fair, you know those are personalized recommendations of basically what Klaviyo thinks you should prioritize, or where there is opportunity to improve, and where you’re not just going to be banging your head against a wall. You know, no matter how much work you put in there, you’re going to keep getting the same numbers,

Vira  21:40 

Right, right. Let’s do a quick like a case study here. I’m just looking to on one of my accounts, and it says the worst performing indicators, as depressing as it sounds, I really appreciate that you guys have this like as a separate list. So for example, the open rate for abandonment card series flow as poor, and it says that the percentile is 19th what does it mean? The percentile thing.

Jon  22:06 

So out of the 100 companies that we pulled that are similar to that account, you’re in the 19th percentile. So you’re, what is that the 81st best? So you got a lot of room for improvement. There should be, you know, like, what was it say for the median.

Vira  22:23 

The value? Like, your value or something? Yeah, 18.8% what does it mean.

Jon  22:29 

Right. So that is the open rate for your band. So when it says your value, let’s start there, yeah. What’s the open rate for that abandoned cart flow?

Vira  22:41 

Well, in your value, it says 18.8% so whatever it means, the status is poor and the percentile is like 19th.

Jon  22:51 

Right. So it’s telling you you have a lot of room. There’s almost 80 accounts out of 100 that are doing better than you’re doing.

Vira  23:00 

This, like specific flow.

Jon  23:02 

Right. For the abandoned cart flow specifically. So that means subject lines are going to be your friend to get that open rate up. So I think you’d be hard pressed, because the abandoned cart flow makes a ton of money for everybody.

Vira  23:16 

Right, right, right.

Jon  23:18 

Hard pressed to prioritize a project you know, more than starting to AB test some abandoned cart subject lines.

Vira  23:25 

Right, right. So, if you were us, you would set up some sort of, like AB testing and just run it for, like, I don’t know, for like, 30 days or so, and see which one performs better, right?

Jon  23:35 

Absolutely. And then we’re gonna follow back up with you next month and see exactly the the improvement that your efforts have yielded.

Vira  24:00 

Right. What about the bounce rate? This one is a very like hard to improve, especially when we’re talking about the soft bounces. So what would you do regarding it?

Jon  23:56 

Yeah, so the bounce rate, I mean, the soft bounces, you can’t really do anything about, if you were seeing a ton of bounces and a really high bounce rate across, you know, all your emails, I would look at making sure the emails you’re collecting are being validated as real emails, because you might have people putting in, you know .com, or not giving you real email addresses just to get a discount code. So I would look at the email capture itself and make sure that you’re actually enforcing that real emails be entered there.

Vira  24:29 

Okay, let’s review the next metric, email revenue per recipient. Well, I guess it’s a it’s a big one. There’s so many things that you can do about it, right? Yeah, it unfortunately does not show like, what specific flow we need to be working on. But how would you approach this metric, email, revenue per recipient?

Jon  24:47 

And just to be clear, if you’re under flow performance, it shows you all the flows together. And then also you can drill down into each flow, but I’ll tackle that. You know, revenue per recipient, you know, I think that’s going to be a culmination of a lot of things, including the landing page that you’re sending people to. So that’s, you know, I would make sure you’ve got, you know, a clear call to action so you’re getting your your click rate up, and then making sure that the landing page you’re sending them to is tailored to the content of the email.

Vira  25:21 

Got it, got it. Oh gosh. Like, a lot of a lot of stuff to to learn, that’s for sure. But I like seeing that progress. I just started working with this account, like a few, few weeks ago, so I see exactly where I should focus. That’s awesome. That’s awesome. Where would you recommend everyone to start? Like, I, for example, opened this benchmark for the first time ever. It looks very overwhelming if I don’t know where to start. So what would be my step number one?

Jon  25:49 

Yeah, so I think if you’re a generalist and you’re at a smaller brand that you know you’re you’re running the whole show, I would look at your welcome series and abandoned cart and like, if you’re not excellent in those areas compared to similar brands for your, you know, open and click rate, I would work on getting those up and starting there. If you are at a bigger brand that maybe you have an E commerce manager that runs the website, and then you’re working on email, you know, you can share this around as well. You know, there’s not just email metrics in here, but business performance. So things like average order value that you know more than just email folks care about can come in here and see that, and you can show there’s opportunity for growth to some of these other departments that maybe don’t touch Klaviyo day to day.

Vira  26:39 

Right, right. I’m actually looking at this business performance tab right now. It’s very helpful. I didn’t even realize it was here. It basically shows you how your, for example, average order value, compares to peers in your group, how your take the average order count and percentage of orders returned. It’s pretty cool, Jon, I didn’t even realize it’s here. Honestly, I’ve never went to this tab. That’s awesome. And what I also like about Yeah, and what I also like about it. And you just then pointed me to this part that it has like a breakdown for campaigns, performance and flow performance. So that’s pretty cool, too. Do you guys do the overview for all of the flows that you have in the system, or just for the main ones, like welcome series, abandonment card and browse abandonment.

Jon  27:26 

So we have the four main ones, which is welcome series, thank you, abandoned card, abandoned browser, and we didn’t want to hold those back, so we got those out as soon as we can. We are absolutely looking at adding, I mean, there’s a the entire data science team. There’s a whole pod dedicated to benchmarks. It’s becoming a huge focus, especially as Klaviyo gets, you know, close to 60,000 customers now, and is going to continue to grow. We have this huge pool of customers that we can, you know, go to and get data, whereas some of these other, competitors that have fewer brands aren’t going to be able to pull as tailored of a peer group for you.

Vira  28:07 

Right, right. And obviously, the more clients you have, the more data you have, the more in depth you can go with that report. So that’s super, super awesome, super helpful. Honestly, I learned a lot today. So thanks so much, Jon.

Jon  28:21 

Do it on do it on video, and I can, I can walk you through it.

Vira  28:23 

Oh, that’d be super fun. Yeah, we should definitely do that. We should definitely do that. You guys. We will actually link the how to use benchmarks video to this podcast. Because one of my colleagues, I know, he recorded this video, and it was super, super helpful. But definitely, Jon, it was super helpful for us today. I learned a lot of new stuff. So thanks so much. Definitely come back next time, we’ll be happy to have you on this podcast again. Thanks so much.

Jon  28:49 

Absolutely. Thank you. Have a great day.

Vira  28:50 

Have a good day. Thank you.

Jon  28:52 

All right. Bye, bye.

Vira  28:53  

Bye. I know about you people, but I have learned so much today. So thanks again for coming to our podcast. Jon, it was fun hosting you here. Definitely come back anytime. And hey guys, don’t forget to subscribe and share this podcast with your friends, because we actually do have a ton of really interesting, useful, like really, really awesome e commerce, email marketing content coming to your way. And in fact, next week, we will be talking about customer nurturing and how you can nurture those leads of yours, those loyal fans of yours, with email marketing, and specifically with flows and campaigns. So definitely, come back next week, we’ll be sharing a lot of cool little strategies that you will be able to implement. And if you have any like questions or any like specific topics that you’d like us to discuss on our podcast, go ahead to our flowium.com/ask, and leave your question there. It’s always a pleasure to be connecting with awesome like minded e commerce email marketers and E commerce entrepreneurs. So as always, thanks for listening. We appreciate you guys a lot, and we hope to see you next week.