Last week, a message came from an e-com brand:
“Hey Siim. We’re looking for someone to take over our DTC brand’s email strategy. We believe email should drive 30% of our revenue. Let me know if you’re interested.”
First of all, I LOVE when brands come to me with a specific goal in mind.
It makes it much easier for me to “prescribe” what’s not working for them.
But the 30% attributed revenue KPI?
Not a huge fan.
And I’m pretty sure I hear a modified version of this every day (mostly when I make the mindless mistake of doomscrolling through my LinkedIn feed).
“Your Klaviyo attributed revenue should be at least 30%!”
I’m genuinely baffled by where this “rule” comes from.
If you know the answer, please let me know.
Anyway, Dan Kennedy once said something about these “rules” that stuck with me:
Most of the “The Rules” in life are just suggestions made up by someone else.
He adds:
“Things presented to me as THE RULES turned out not to be rules at all. They were just other people’s opinions, paradigms, ignorance, and bad habits!”
More often than not, these rules weren’t put in place by anyone smarter than you.
Does that mean you should go full-rebel mode against every piece of advice you hear?
No, that’s not what I’m saying.
But you should absolutely question everything that comes your way.
And below are three reasons why I’m questioning the hell out of the “30% attributed revenue” rule:
1) Your retention revenue depends on what you sell
If you want your email revenue to be high, you need to sell something that needs to be replenished.
The obvious industries that come to mind are supplements, makeup, and beverages. These are all products that people consume daily, and if customers enjoy your stuff, they will probably come back for a second purchase.
But say your hero product is non-consumable, like a home office table or a scooter. Good luck convincing people to buy another one of those, at least within the first few months.
2) You’re at the mercy of other variables outside of marketing
If your brand doesn’t carry anything else that the customer wants to buy, you’re not going to land repeat buyers.
You can write and design the best emails, but without a strong assortment of core products, they are dead weight.
That’s why, before investing in your email strategy, you need to make sure you actually have something else (a back-end offer) to sell to people.
When I crafted a post-purchase sequence for Von Baer (a brand that sells luxury leather bags), we presented buyers with Category B items, such as a leather cream and wallets.
To drive repeat purchases, you need to have a strong assortment strategy in place first.
3) High email revenue doesn’t always mean business growth
There are ways you can artificially inflate channel revenue, like changing your last click attribution settings.
This is one of the scams that some (not all!) email agencies pull. When you look at their case studies, the client’s email revenue grew by a gazillion percent, but the business revenue stayed more or less the same.
Another example is when a user signs up for your email list, and instead of showing them the discount code right away, you direct them to a welcome email and take the credit when they buy.
But suppose you operate your email strategy with an “owner’s mindset,” meaning you don’t pull any of these cheap gimmicks. In that case, 90% of your email revenue will depend on your ability to drive repeat purchases.
And again, that largely depends on what you sell and your product strategy.
What’s next
There are many better metrics than channel revenue to measure your email marketing performance. You can learn more about them here.
