Aug 22, 2015 | Customer Loyalty Research | Why Thanx

Mobile Murders Traditional Marketing Channels

Kane Russell — Marketing at Thanx by  Kane Russell — Marketing at Thanx

If you're exclusively using traditional marketing channels, who could blame you — that's what everyone else does. But if you want to set yourself apart and capture a larger market share, embrace what's working, not what's been done. 

traditional-marketing-channels

We recently pulled the numbers examining the results companies achieve when they use traditional versus new forms of marketing. 

As you can guess by the title of this blog post, there was one clear winner: new forms of marketing. Traditional marketing simply cannot compete. Let's take a look. 

Traditional Marketing Channels: The Results

According to Mailchimp, restaurant marketing email averages an open rate of 23.75% and clickthrough rate of 1.51%; retailers see 22.06% and 2.82%, respectively. That means two things for marketers:

  1. Actions Taken: If you email 100 people, 22-24 people will open the message and 1-3 people will click a link. 
  2. Scale: If you want 100 people to click a link in an email, you need to send that email to 3,500-6,600 subscribers. 

Vertical Response confirms these findings, publishing that open rates average between 18-25% and clickthrough rates 2-8%. To quote the Vertical Response article directly, "The average person gets about 150 emails a day, so an open rate hovering around the high 20s is good."

To be clear, "open rate" measures only how many people on an email list open or view a delivered email — it says nothing about what people do with the email. Similarly, "Click rate" measures only the percentage of people who open an email and click on at least one link — zilch about what happens after that. 

The Vertical Response article goes on to say that conversion rate averages 5-10%. "Conversion rate" measures the percentage of people who took the "desired action" the email marketer wanted (e.g. filling out a form on a landing page) — and nothing beyond that.

Understanding The Conversion Rate of Traditional Marketing Channels

In case you missed it, the denominator switched between clickthrough and conversion rate. Whereas "Clickthrough" measures the percentage of the original subscriber list that clicked a link, "Conversion" only measures the percentage of people who ended up on the conversion page and took the "desired action" (otherwise, how would they get to the action in the first place — conversion cannot be higher than clickthrough).

When done correctly (i.e. mapping everything off of the original subscriber list), the math for traditional email marketing becomes:

  • Open rate: 18-25%
  • Clickthrough rate: 2-8%
  • Conversion rate: 0.3%-0.8%

So, out of 100 people, less than 1 will convert into a "desired action" — which says nothing about spending money. Getting 100 total subscribers to take a "desired action" requires sending an email to a subscriber database 12,500-40,000 individuals. 

Mobile Dominates Traditional Marketing Channels

Now, compare those figures to sending a push notification that's relevant to a recent transaction — where the average engagement rate equals 50%For push notifications, "Engagement rate" describes the percentage of people who saw a push notification and then opened an app after seeing that push notifiction — aka "clickthrough rate" in the email world. 

Look at those numbers again! 2-8% versus 50%mobile produces a 6.25x improvement over traditional email marketing. And that's not even the whole story. 

Mobile Murders Traditional Marketing Channels

Above, you'll see that conversion rate for traditional marketing averages between 0.3%-0.8%.

Compare that to using a push notification targeted to a specific customer, where the worst redemption rate we've ever seen is 10%. 10%! 

What's more, thanx to closed-loop promotions, we know exactly what "desired action" resulted from sending the push notification — a customer spent money!

So, would you rather have a 0.3%-0.8% chance of a customer taking a "desired" action, or at worst a 10% chance that a customer spends money? 

Have the Courage To Move on From Traditional Marketing

Easy decision, right? Well, it should be. But it requires some courage on behalf of the people in charge. 

Look, I get it. Nobody gets fired for buying IBM. Doing what people have always done makes sense. Being the person at Blockbuster Video worried about streaming video, or the person at Sony worried about digital music replacing the Discman is extremely tough.

But the writing is on the wall for traditional marketing. If you are not engaging your customers mobile first (to be clear: email alone, not going to work, but email as second banana, phenomenal), you're going to be left holding the bag.

New, more innovative forms of marketing are WAY more efficient, and WAY more effective than what's been done. That's all there is to it. 


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