How to Improve the Performance of Email Marketing Campaigns? A Field Experiment Using the Authority Principle to Improve Email Performance

1 Introduction

For most of us, reading and answering emails is a key component of our working day. And with an ever-larger part of our life spend online – the average human spends a staggering 7 h per day online (DataReportal 2022) – our inbox is the place where we find information that sometimes matters. Therefore, it might be hard to believe that the first email was send in 1971; when Steve Jobs and Bill Gates were still in high school, General Motors was the biggest company in the world, and Mark Zuckerberg wasn’t even born – that would still take over a decade. As such, it is not surprising that email marketing is often overlooked by scholars and marketing professionals; it might seem like a dinosaur next to hipper social media channels like Instagram and TikTok, but no less is true.

Email marketing is one of the most profitable marketing channels, generating an average return of 36$ for every dollar invested (Data and Marketing Association 2020). In addition, research shows that email is the preferred channel for consumers to communicate with companies – scoring two times better than social media (Data and Marketing Association 2020). So, what makes email such a powerful tool? First, email marketing, in contrast to other digital marketing channels, is very cost-efficient, allowing you to develop automated workflows and send personalized content to your audience for limited costs. Second, an email list includes people who actually showed interest in your product or service, bought from you in the past or are even long-term happy customers. Third, in email marketing the data-normally-belongs to the company itself, allowing for a much more precise and detailed analysis of marketing campaigns and consumer behavior. In recent years, this has resulted in a growing interest from companies in email marketing, but often they are confronted with the same issue: millions of emails are sent out every day – how can we stand out in such a crowded market?

Here, recent technological developments might offer an answer; nowadays most email programs allow marketers to do advanced A/B tests. Using these tools can help marketing professionals to better understand their target audience and gradually improve the performance of email marketing campaigns. Moreover, these possibilities have also sparked the interest from scientists; to see how minor changes in email design influence key metrics like opening rates, click-through rates and conversion rates – as these metrics play a crucial role in the success of campaigns.

2 Literature

The first step to increase the performance of email marketing campaigns is focusing on opening rates – your audience can only engage with your content when they effectively read it. Current academic literature focusses strongly on subject lines: Sahni, Wheeler, and Chintagunta (2018) and Munz, Jung, and Alter (2020) find that personalized subject lines increase opening rates and click-through rates, Kumar (2021) shows that shorter subject lines increase opening rates, and Valenzuela-Gálvez, Garrido-Morgado, and González-Benito (2022) find that using emojis in the subject line increases opening rates – especially non-facial emojis which are closely related with the product. Finally, Lorente-Páramo, Hemández-Garcia, and Chaparro-Peláez (2020) suggest that specific cultural dimensions play an important role in opening rates and click-through rates – a reminder for companies which are active in different countries to pay attention to local identities.

In contrast to subject lines, the academic literature on the role of the sender in email marketing is very scares: only one study addressed this topic. DeAngelo and Feng (2020) compared the effect from professional versus unprofessional email addresses on opening rates, click-through rates and conversion rates. Unsurprising, professional email addresses – which allow the recipient to clearly distinguish the sender and the organization they work for – generate the best result. In our opinion, it is surprising that the academic literature has not addressed this topic more thoroughly, especially since the sender and the subject line are the first pieces of information a recipient reads – and they play a crucial role in the decision to open an email or not.

In this paper, we want to address this literature gap and evaluate if we can use the authority principle to improve the performance of email campaigns. In marketing, the authority effect is often used to convince the audience of the credibility of the messenger: think of the doctor in the white coat or the professor recommending a product or service. In his bestseller, “Influence: The Psychology of Persuasion” Cialdini (2007) describes the different tricks that marketers use to create this feeling of authority, by focusing strongly on clothes and titles. In his book, he refers to the large body of literature, dating back to the famous Milgram experiment, showing that individuals tend to go very far to comply with the requests from authority figures. Interestingly, from a marketing perspective, the academic interest in the authority effect remains very limited, especially since authority figures are so often used in advertisements.^[1]

Some of the techniques that Cialdini mentions in his book, can be easily translated to the world of email marketing; and that is where the idea for this research originates. Already in 2005, Guadagno and Cialdini wrote that “being an expert or an authority figure is a social category that can easily made salient by an email signature or an email address” (p. 104). However, for authority figures, it is essential that they are perceived as being credible, meaning that they are both trustworthy and an expert on the manner (Cialdini and Rhoads 2001). As Cialdini (2007) explains, titles are an excellent way for people to be perceived as authority figures – and in the business world the title with the most resonance and prestige might still be CEO. Therefore, the objective of this paper is to see if recipients are more eager to open an email and follow the call-to-action, when it is sent by the CEO of a company.

Building on the existing knowledge of the authority effect, see Cialdini (2007), we anticipate that opening rates and click-through rates of email campaigns will be higher, when the emails are sent by an authority figure – in this case the CEO of a company. In this paper, we will test the following two hypotheses:

3 Research Design

To answer these questions, we collaborated with a company developing digital marketing tools and run two randomized field experiments with different target audiences. For this company, email marketing is an essential tool to acquire new customers and keep existing customers up-to-date about new product features and offers. In the first experiment, the recipients of the email – in this case prospects – were invited for a three months trail to test the software the company sells. The recipients were randomly assigned to two groups: the control group received an email from Joe Doe from Company X and the treatment group received an email from Joe Doe CEO from Company X.^[2] The other design elements and the content of the email were exactly the same. For the second experiment, this setting was copied and an email send to a larger sample of existing customers to inform them about a new product offer, which allowed us to test if the original findings are robust. The following performance metrics are evaluated for the control and treatment group:

1. Open/Send: The opening rate is the percentage of send emails that are effectively opened by the recipients.

2. Clicked/Send: The click-through rate is the percentage of send emails where the recipients followed the call-to-action in the email and clicked on the embed link.

3. Unsubscribed/Send: The unsubscribe rate is the percentage of send emails where the recipients opted to no longer receive emails and unsubscribed from the email list.

We use an independent sample t-test to evaluate if the differences between these metrics in the control and treatment group are statistically significant.

4 Experiments

5 Conclusion

This paper wants to focus the attention from the scientific community on the role of the sender in email campaigns. In the previous literature, this topic has been broadly neglected – although the results from our experiments indicate that minor changes can have important effects on the key performance indicators. In general, our findings suggest that companies can use authority figures, like CEOs, to improve the performance of their email campaigns. Hence, confirming our research hypotheses that authority figures can be used to raise opening rates and click-trough rates in email marketing. As Guadagno and Cialdini (2005) anticipated, an email address or an email signature are efficient tools to be perceived as an expert, showing that the authority principle also functions well in an online environment.

However, our results also indicate that there are important differences between target groups, suggesting that specific audiences are more easily affected by authority and job titles than others. This finding adds to Jung and Kellaris (2006) and Jung, Polyorat, and Kellaris (2009), who show that the authority principle functions differently in specific market segments and cultures. Therefore, future research could evaluate if these findings also hold in other settings (e.g. other market segments or other industries) or with different job titles (e.g. other C-level job titles) and if the effect stays constant over longer periods of time.

In our opinion, the bottom line from this study is that current email software makes it fairly easy for companies to test these mechanisms on large scale; allowing them to gain more knowledge about their target audience and gradually improve the performance of their email campaigns. In essence, different social influence techniques can be included in email campaigns, ranging from the authority principle to applying social proof and reciprocity; see Cialdini (2007) for a more detailed introduction into these mechanisms. Especially while all design elements can be tested and doing regular A/B tests is a good practice that helps to improve campaigns step-by-step. Because an email list is a very valuable asset – and it should be used to its full potential.