EMAIL OPTIMIZATION FORMULAS What is the most effective way to approach an email messaging optimization project: Where should you begin? The MarketingExperiments Email Optimization Sequencesm The MarketingExperiments Email Optimization Sequencesm, by its structure and notation, is designed to convey this essential optimization principle: You should sequence your optimization efforts in the opposite order from the physical conversion-to-sale process. In the physical conversion-to-sale process: You first identify prospects by accumulating email addresses. For house lists this is accomplished through email capture, represented in the Email Optimization Sequencesm as “ec”. Once your message arrives, you must inspire your prospect to open it.  This is represented in the Sequence as “op”. Your next objective is to motivate them to “click through,” represented as “ct”. Finally, you must “close the sale.” For the Web site-based conversion model that begins with the offer on the “Landing Page,” represented as “lp”. Although the Sequence symbols are listed from left to right in accordance with the physical conversion process, the “operator” symbols point from right to left: When performing the optimization process, start with the end in mind. MarketingExperiments recommends applying an email-specific formula called the Email Messaging Effectiveness Indexsm, shown below, to each stage in the optimization sequence, Key point: The variables in the index apply to every step of the conversion process, but the way in which they are applied is unique at each stage. This concept is illustrated by the arrow from the Landing Page step of the Optimization Sequence formula to the Email Messaging Effectiveness Index: BACKGROUND Let’s now look at the first element in the relationship between the offer Landing Page and your email’s effectiveness: Relevance, or “rv” in the Index above. Merriam-Webster Online defines relevance as: 1 a: relation to the matter at hand b: practical and especially social applicability : pertinence <giving relevance to college courses> 2: the ability … to retrieve material that satisfies the needs of the user. Relevance in Landing Page Optimization Creating relevance between the Landing Page and the visitors’ motivations when Follow

We received several requests for more information on price testing subscriptions after our last Web Clinic on finding ideal price points. Let me start by reviewing the concept of Price Elasticity of Demand (Ed), a measure of how much demand changes in relation to a change in price if all other factors remain the same. • If demand is price inelastic (Ed < 1), a price increase increases total revenue and a price decrease decreases total revenue. Picture “necessary” goods or services or those without competition. • If demand is price elastic (Ed > 1), an increase in price decreases total revenue and a decrease in price increases total revenue. When there is a readily available equivalent product from a competitor you are likely to see elastic demand. • If demand is price unit-elastic (Ed = 1), price and demand are offset. In order to use your Ed calculation to further your business goals you need to have done some testing of your product or service at several different price points. The example we used in the clinic was a subscription offer at $69.95, which was the Control price, against $50, $59.95, $75, and $79.95. We tested for two weeks and knew how many subscriptions we sold at each price point during the test period. 20% of traffic was directed to each offer page. Our calculations showed that demand was inelastic at all price points compared to the Control: when price went down to $50 for example, total revenue went down; when prices went up to $75 and $79.95, total revenue went up. Demand for the online subscription during those two weeks was price inelastic. But if we isolated the $75 price point and its total revenue and did an Ed calculation comparing it to the $79.95 price point and its total revenue, demand turned elastic: total revenue dropped as if we’d reached a tipping point. More data points from further price testing would be needed to prove we’d reached the point of elasticity, but the test results could be used to set a new price producing more revenue in the meantime. Source: http://www.marketingexperimentsblog.com/internet-marketing-strategy/price-testing-online-subscriptions-04-08.php Follow