When evaluating success of your email marketing program in Klaviyo, the first place to look is at the Top Line Performance Dashboard, where you’ll see KPIs around Revenue generated from Klaviyo, and a bit of a breakdown on where it all comes from. We’ve written a guide to evaluating the entire performance dashboard, but in this blog post we’ll take a deeper dive on the percentage of revenue driven from campaigns vs the percentage of revenue driven from flows.
In Klaviyo, revenue from flows is defined as revenue attributed to the emails or SMS messages that are sent through Klaviyo’s automated flows functionality. Typically these flows are triggered by actions your subscribers take (or don’t take) which then qualify them for your flow and begin dripping a series of messages. If a subscriber converts from one of those messages, revenue will then be attributed to that flow and that will roll up to the larger revenue from flows statistic on the performance dashboard.
Revenue generated from campaigns is equally as simple. All one-off campaigns sent from Klaviyo that generates revenue will roll up to the revenue from campaigns statistic on the performance dashboard.
If you’re looking to improve your overall email marketing program, you might be asking yourself what is right amount of revenue is to generate from campaigns vs flows?
Let’s start by discussing the two extremes.
All revenue being driven from flows
In an email marketing utopia, all emails and SMS content could be built into flows, so that all conceivable messaging could be done in an automated fashion while you kick your feet up and watch the revenue trickle in. You’d in theory have the perfect messages set up so that by the time everyone reached the end of your conversion funnels, they’d no longer need further messaging.
The problem with this of course assumes that you’ll never need to change anything and all of your messaging will convert before you run out of messages. Both of things will never happen, as you’ll likely at a minimum have new value propositions to share, new products to highlight, and you won’t just want to give up on the acquired subscribers that quickly. And the solution to this is definitely not building out a 50-email-long flow.
The reality here is that all revenue coming from flows is more indicative that you’ve got work to do and are missing revenue opportunities, not that your email program is perfected.
All revenue being driven from campaigns
The opposite end of the spectrum is where a lot of companies are in their email marketing program, especially if they aren’t using a platform like Klaviyo or don’t have any integrations set up. While driving all revenue from campaigns allows you to keep up with fresh content, you lose the ability to effectively manage the segmentation of your audience and deliver messages at the right time in the customer journey. You can do some of that segmentation within campaigns, but it becomes an operations headache and there is extremely limited shelf-life of an email campaign. Once you send it, all of its value capture window is well short of a week.
All revenue driven from campaigns is a sign that you are missing out on not just better conversion rates through segmentation and timing, but also in streamlining your email marketing operations to more efficiently manage the channel. In many cases, we see an overabundance of revenue coming from campaigns as an early sign that the email volume is too aggressive and could lead to a deliverability problem.
What’s the right balance of flow and campaign driven revenue?
Some of the variables:
How far along is your business?
If you’re just getting your email marketing program off the ground and have a small subscriber database, you’re likely to be skewed towards having more flow revenue (or at least you should be). The reason is that early on, you will likely want the foundational email flows set up (welcome series, abandoned cart, post purchase, etc.) which will drive some conversions, and because the subscriber base is so small, it’s likely that it’s not worth setting up frequent one-off campaigns to drive revenue.
Conversely, if you have managed to acquire a large subscriber base you haven’t done much with you’re likely going to start to warm up that subscriber base with one-off campaigns as you won’t be able to send them through Welcome Series or other early stage flows and therefore will have your revenue skew towards being mostly campaign driven.
How much subscriber action data do you have access to?
If you have limited data or simple integrations, flows are going to be difficult to generate revenue from because you won’t have much subscriber data to obtain to use for triggering automated messaging. While you may have some basics set up through a standard integration through a platform like Shopify, setting up advanced flows around behavior based actions or being able to segment by specific purchase types or categories limits much of your opportunities with flows. This may not be a big challenge with your standard e-commerce store, but if you have a custom integration or a unique customer journey, getting access to data may require developer resources and therefore you may end up driving a disproportionate percentage of revenue from campaigns.
What does your inventory look like?
Stores with limited inventory, or inventory made up of a main product with accessories for that product allow you to have a clear understanding of the customer buying cycle. First they must buy your main product and then they’ll be in a position to buy your accessories. There’s a clear path to setting up flows to nurture subscribers towards your main product with more extensive messaging for it, then creating flows to upsell the accessories once they’ve made the purchase of the initial product. Ultimately, it’s easy to set up ‘if this, then that’ type of logic which is easily handled by Klaviyo Flows. With less options or choices, you can spend less effort to show users all the possibilities of what they might like through campaigns, and instead devote more messaging to longer nurture sequences in flows, which means your revenue may be able to skew more towards being flow driven.
On the other hand, if you’re a larger retailer with a wide-ranging inventory or you have limited product runs of inventory, you’ll likely need to run more campaigns to expose subscribers to seasonal products, new inventory, or limited-release products. It doesn’t make a ton of sense to try to show every single product to users in a never-ending flow, and therefore you may end up being more campaign heavy in your revenue from Klaviyo.
How predictable are your customer buying habits?
The more predictable your customers buying habits are, the more likely you’re able to skew your revenue towards being flow driven.
If you sell a consumable like something in the food and beverage or beauty categories, you should have a pretty good idea of what your users buying habits should be based on how many servings or uses a customer would get out of your product before a refill is needed. This gives you an ability to set up automated reminders for re-purchases with a clear call to action, and you should be able to set up flows that drive the recurring revenue based on that purchase data.
Other retailers, take furniture for example, may have a bit more trouble determining a customer’s buying cycle. Is someone likely to buy a bunch of furniture at once having just recently moved? Or are they more likely to add pieces over time because they’re just looking to replace their old couch? With an unclear buying habit, you may need to use campaigns to hopefully put your message in front of a subscriber at the right time, therefore making you more likely to skew revenue towards campaigns.
Is your lead magnet biased to drive revenue from email?
Scenario A: You land on a store’s homepage and get a ‘10% off your first order when you sign up for email’. You enter your email and now you get the promo code of “WELCOME10”. You’re subscribed to email, but the the Welcome Series Flow did not convert you and therefore no revenue got attributed to flows.
Scenario B. What if instead the thank you message of the signup form indicated the promo was in the email. Now you’ll need to open up the first email of the Welcome Series Flow, click through with your “WELCOME10” code, and purchase. Klaviyo claims your purchase as revenue attributed to your Welcome Series Flow.
As you can imagine, this has huge ramifications on amount of revenue driven by the Welcome Series and therefore the percentage of revenue coming via flows and skew the flow vs campaign revenue balance.
Are your biggest promotions only communicated in campaigns?
This is a big one we see a lot for companies that do heavy promotions and sales. Typically, these sales and promotions are communicated through campaigns and unless you’re well organized, you’re not updating your big lifecycle marketing flows to also include that there’s a big sale going on when someone signs up for your email list and is in the middle of the welcome series, or has abandoned a cart a week ago that they’d now qualify for with a bigger discount.
When this happens, revenue skews heavily towards campaigns, and almost more importantly, your flow emails start to become less effective because even if you have behavior based messaging, your subscribers can be trained to wait for sales in campaigns. If you have high campaign volume and the offer is always better in campaign messaging than in your flow messaging, you’re going to skew heavy towards revenue from campaigns. This can become a really difficult hole to dig out of.
Use campaigns to inform where flow opportunities exist
If you’re reading this, you are probably in the position of driving a disproportionate amount of revenue from campaigns than you are from flows. With Klaviyo, you should be able to start determining from your users who place multiple orders from camapigns to see what type of products are being bought in which order, and the time between them. Klaviyo’s Predictive Analytics may be a helpful resource in putting together flows based on that purchase behavior.
Final Thoughts
One-off campaigns give you the biggest opportunity to reach the widest range of subscribers, and even in cases where we have plenty of data to work with from a flows standpoint, the reality is that people are fickle, and sometimes the most targeted flow message may not convert them, but a random campaign email could inspire them to finally make the purchase they’ve been thinking about. Because Klaviyo uses last-touch attribution, that campaign would get all the credit for the revenue.
But that doesn’t mean you should just endlessly send campaign emails.
At MH Digital, no matter who our client is and what their revenue skews towards, we are still going to pursue setting up as much automated flow messaging as is possible to drive more revenue towards flows. Not only does it make for messaging that has a longer shelf life, but those messages tend to drive much more engagement and lead to stronger metrics used in email deliverability and long term subscriber engagement without unsubscribes or spam complaints.
When you look at driving revenue from both sources, keep this in mind:
If the target is maximizing short term revenue, you’ll likely want to purse increased campaign volume.
If the target is building sustainability and an efficient email channel, you’ll want to pursue more flow driven messaging.
With email revenue from campaigns vs flows, much like the rest of the marketing space, context is everything and balance is key.
Need some help figuring out how to better balance your campaign vs flow driven revenue?
Let’s chat.