The revenue per recipient number on the Klaviyo Performance Dashboard is often the most overlooked because it has the least eye-popping numbers. For most businesses, the revenue per recipient will hover somewhere less than a few dollars per recipient. While that number isn’t all that impressive, understanding what it looks like at scale when you have a large contact database and a robust campaign calendar can be a key indicator in your overall email marketing program health, and it is a key in finding the balance between email database health from a deliverability standpoint and driving aggressive revenues.
What should my revenue per recipient be?
Some of the variables:
How much segmentation are you using in your campaigns?
This is the biggest variable in determining whether you should be able to grow your revenue per recipient metric. While some of the other variables we discuss in this article are about the numerator in the revenue per recipient equation, this one is all about minimizing the denominator and being smart about your recipient lists.
Using segmentation is well documented, not just for driving more conversions, but in making sure you don’t send emails to people who aren’t going to be in a position actually place an order. Here are some groups to think about excluding from your standard conversion-focused email.
- Recent purchasers – this group should be a no-brainer to exclude. Not just if they purchased that specific product, but think about how likely it is that they would make a purchase from you a week or two after making the previous one.
- Unengaged subscribers – While you should be removing subscribers who aren’t engaging with your emails for general list hygiene, you should consider being a bit more selecting and restrictive from time to time with your campaigns depending on what your offer or the products being featured are. Not every subscriber needs to receive every email.
- Subscribers in your welcome sequence or cart abandonment flows – In most cases, our behavior and lifecycle action driven messaging will outperform campaign messaging. By removing subscribers from your campaigns who are in the middle of these flows, we can cut down volume to them and focus our messaging better, driving more revenue with less email volume. A win-win for everyone.
What does your inventory look like?
Do you sell a consumable? Or a wide range of low priced products? Or have a more limited product line with higher prices? If it’s the former, you’ll be able to send more emails whose purpose is to drive revenue and additional sales. It wouldn’t be unrealistic for someone to want to receive multiple emails a month asking you to re-purchase a product they might be running out of, or another pair of socks or basics they might need in their wardrobe. You’ve got lots of opportunities to drive more revenue and thus can expect to track consistency and potential growth in your revenue per recipient KPI.
If, on the other hand, you sell one main product and not much else, you’re really only going to collect revenue a handful of times, you can’t expect a high revenue per recipient for most of your database if you’re going to continue to email converted customers. While you may not be able to collect more explicitly attributable revenue, you can still get tangible value out of your customers you’ve already converted.
How important is education and nurturing to conversions for your business?
Different products and services take different amounts of nurturing to convert a subscriber into a customer. Are you in a brand new category and the average consumer needs help understanding what it is you sell, let alone how it’s differentiated in the market? A long nurture sequence for a novel product or one that requires a complex implementation to use for your customer may take multiple messages to help convert. In many cases, we see combinations of both marketing style as well as sales emails being involved to convert a customer. The more emails it takes to convert someone (the longer the sales process), the more volume you’ll need to convert and therefore your revenue per recipient maybe higher.
On the other hand, if you sell consumables or commodities as a retailer, you may be able to convert people more quickly and frequently, thus driving your revenue per recipient up.
How important is community and awareness to your brand?
For some brands, the product is the brand and the community. And in many cases, most of the communication you do with your audience is not going to be about driving more purchases, but instead driving them to other content which does not generate revenue. Sharing social content, harboring feedback and encouraging user generated content are all important to a lot of brands ability to drive growth and recognition.
Track revenue per recipient to best determine your campaign frequency and manage deliverability
Given all the factors that go into what makes a good revenue per recipient number for your business, it can be difficult to hone in on a specific target. That being said, tracking the revenue per recipient is really helpful in determining what your ideal campaign frequency could be.
A client of ours is a daily deals site, where they acquire closeout inventory from other brands and list it for their subscribers on their website and in emails. Previously, they were sending daily emails with a revenue per recipient of $0.03. Over time though, we found that their engagement started to dip and we needed to pull back the frequency of their emails to every other day. What we found in this process was that despite cutting back their overall volume by about half, their revenue per recipient actually doubled in that time, and they were able to settle in on a newer email frequency that maintained their revenue, but significantly cut back on operational costs, allowing us to spend more time optimizing campaigns with dynamic content and testing rather than having to focus on whatever the next campaign was.
When used in tandem with engagement metrics like open rate and click rate, revenue per recipient is a solid KPI to strike the right balance between a healthy email database and one that drives strong revenue. It’s the link between the two ends of that spectrum that every email marketer needs to pay attention to in order to be successful in the long term with email, and can help you dig out of deliverability holes and cut down runaway email volume.
Need help optimizing your revenue per recipient in Klaviyo?