Email marketing is one of the most trusted and most used communication channels between brands and their customers. On the business side, 59 percent of B2B marketers say email is their most effective channel in terms of revenue generation, and 77 percent of consumers choose email over other online channels.
So how do we find this to be true? Tracking and evaluating your email campaign's performance is the most important thing you can do to get to know who your audience is, understand what works and what doesn't, and build a strategy.
When it comes to strategy, you need to measure, gauge, and examine every step of the email marketing process to make better decisions to drive revenue.
As an email marketer, it's often hard to figure out where to start; what metrics are right for you? Whether you're new to the industry or new to a company, you first need to understand the different types of metrics and what is best for your business. Determine what your goal is first, and then figure out what metrics are best to help you track and build the strategy to meet that goal.
Let's take a look at seven common metrics you could use.
1. Open Rate is the percentage of email recipients who open your email.
To calculate this, take the number of unique recipients who opened your email, divide that by the number of emails that were delivered, and multiply it by 100 to get a percentage.
Open rates are an important metric to measure because without an open, your recipient doesn’t read the message you worked so hard to build. That is why email marketers often spend a lot of time strategizing on the best subject lines to help increase opens, but this shouldn't be your primary focus. There are even better metrics to focus your efforts on, such as click-through rates.
2. Click-Through Rate (CTR): is the percentage of email recipients who clicked on at least one link within your email message.
To calculate this, take unique clicks, divide that by the number of successfully delivered emails and multiply it by 100 to get a percentage.
If you ask any email marketer about their most important metric, everyone will list Click-Through Rate. This is as it should be, because it provides insight into how many people on your email list engaged with your email content. While improving your CTR will often improve your bottom-line return, it’s not guaranteed.
3. Click-to-Open Rate (CTOR): Unlike Click-Through Rate, which measures clicks as a percentage of all recipients, Click-to-Open Rate looks at clicks as a percentage of opens.
To calculate this, take the number of unique clicks, divide that by the number of recipients who opened your email and multiply by 100 to get a percentage.
CTOR is the number of clicks out of the number of people who opened your email (not delivered). CTOR gives you a better idea on how the email design, and messaging resonates with your audience who clicked and viewed your email.
4. Conversion Rate: Is the percentage of email recipients who completed the action you wanted them to take; this could be a purchase, filling out a lead form, or something else.
To calculate this, take the number of people who completed the action, divide that by the number of successful email deliveries and multiply by 100 to get a percentage.
Conversion Rates are among the most important metrics you should be using to track your email marketing success; think of conversion as keeping the lights on at your business. Defining your conversion comes first, and it should be based on what you want your subscribers to do, such as visits to your website or impressions.
5. Bounce Rate: is the percentage of the emails sent that returned a bounce message, indicating that they could not be delivered to the recipients inbox.
To calculate this, take the total number of bounced emails, divide that by the number of emails sent and multiply by 100 to get a percentage.
When it comes to bounce rates, there are two types. We refer to them as “hard” and “soft” bounces.
Hard bounces happened because there was a permanent reason an email could not be delivered to the recipient and was sent back to the sender. Some reasons could be that the email address was deleted when a person left a job or created a new email. Some leads could have given you a fake address or mistyped the information.
A soft bounce is a temporary delivery issue. An email address was valid, and the email message was delivered to the recipients’ mail server but bounced back due to either a server being down, the mailbox being full, or the message being too long.
A bounce rate doesn’t necessarily help you with your end goal, but it does allow you insight into your email list health. If too many hard bounces occur, your company could be looked at as a spammer through the eyes of an ISP, and this could put your deliverability at risk.
6. Unsubscribe Rate: measures the people who request to be removed from your email list.
To calculate this, take the total number of people who unsubscribe, divide that by the number of total emails sent and multiply by 100 to get a percentage.
The good news is, unsubscribes aren’t always bad. What does this mean to your email campaigns? This metric you shouldn’t take personally, think of it as a warning sign that something may be off. Use this metric to get a better gauge on who and what your customers want. Are you sending them relevant content?
7. Return on Ad Spend (ROAS): measures how much your business earns in revenue for every dollar that is spent on your campaign.
To calculate this, take the total revenue divided minus what you spent on your campaign, divide that by how much you spent on your campaign and multiply by 100 to get a percentage.
There are many revenue metrics that can be used, including Return on Investment (ROI), Return on Ad Spend (ROAS), and Revenue per Email (RPE), just to name a few. RPAs and RPE are easier to calculate than ROI.
Conclusion
The seven metrics listed above are just a few standard metrics that email marketers utilize to measure campaign success. Choose your metrics based on your business goals. If you only remember one thing, the most accurate data doesn’t automatically give you victory; email metrics are only as valuable as how you use your findings for better decision making.
Webbula has launched a series of blog posts about email marketing metrics. We have a variety of esteemed authors from the email industry lined up to participate. In January, Jeanne Jennings, from Email Optimization Shop and Only Influencers, kicked off the series on the power of open and click reach rates.
RSVP today and join us on February 17th, for an informal discussion with author Jeanne, special guest Betsy Grondy from Email on Acid, and me. Bring your thoughts and questions on the blog post, it’s an interactive discussion.
Watch the Webbula blog for next month's Metrics Series post by Tejas Pitkar, Netcore, as he discusses five email metrics you should be tracking.