Long gone are the days when companies carelessly blasted out emails to unsuspecting customers and hoped for the best.
Now, email marketing is a data driven inbound channel led by analysis and interpretation of key performance indicators (KPIs) and important email metrics.
Any company’s email program worth their salt should be collecting and storing data about their customers and subscribers so that they can create a robust and personalized engagement channel. In an age where data is king, knowing how to measure and constantly optimize your email channel’s performance is one of the only ways to understand if your efforts are producing results.
It’s time to take the blinders off and learn how to identify key email metrics or KPIs that align most with your unique email marketing goals. Each one of your many email campaigns and series will be different, especially if you have different goals for each type of email (e.g., driving sales or generating leads to grow a subscriber base).
Before we jump into our philosophy behind email analytics and tips for the most important email KPIs to track, let’s first review a few basic questions:
What are email marketing KPIs?
An email marketing Key Performance Indicator (KPI) is a measurable value derived from delivered and ongoing email campaigns and series. These are the indicators (or metrics) that help you measure the success of your overall email program. Values such as these help demonstrate how effectively a company is achieving their key business objectives through email marketing. KPIs help you evaluate your success towards reaching measurable goals.
How to measure email marketing success?
Email marketing programs are one of the easiest inbound channels to track and measure. Most Email Service Providers (ESP) – platforms where businesses and brands send their emails from – offer a host of data dashboards and calculated metrics.
It’s impossible to measure the success of your campaigns by only using one metric. Your goal is to find the most important email KPIs that best suit your individual marketing goals.
How do I track an email marketing campaign?
Determine which KPIs you want to track first. Most email metrics are calculated with a formula (don’t worry, they’re really simple!) Once you have chosen your specific email campaign analytics, it’s time to dig into your software toolbox.
Utilize your ESP’s dashboard, customer relationship management (CRM), web analytics or other databases to house and store the raw data. Export the data’s metrics into your format of choice and review over a designated time frame.
Keep this data and the trends you find aligned with your established goal and take action to optimize and draw high-level insights from the data you collect and analyze.
Fundamentals of Email Analytics
Email marketing is one of the most valuable data sources you’re going to get. It’s like striking oil and then being able to recycle it in your tankers over and over again. Your data tankers that is…
It’s always possible to track how many of your subscribers opened a message, how many clicked, converted to buy something and so on. All of this data informs your email program and if you’re really smart – it’ll inform the rest of your digital marketing strategy.
There are numerous metrics that you should be tracking for on any given campaign. We’re going to dive into the most important ones to look out for. But first, we want to introduce our simple philosophy behind the basics of email analytics.
The majority of email metrics can be put into two categories, we like to call it the Double Helix Flow. That is, most key metrics can be broken down between engagement and conversions.
When determining what email metrics you should track, think about the goals you’re looking to achieve by this email campaign or series. Then frame whether or not you’re looking for increased engagement, more conversions or both. Start with these two simple questions.
Are the customers or prospects seeing what we’re saying and interacting?
Are they taking the designated actions we’ve set for them?
Don’t overcomplicate it. This is the foundation from which all other KPIs grow from.
This twisting and ebbing flow between engagement and conversion is a continuous balance that you’ll learn to manage as you go.
Engagement KPIs: these refer to how the user is interacting with the content itself. Some of these things might be open rates, click through rates, subscriptions, bounces and more.
Conversion KPIs: these measure the actions that a customer or subscriber have taken after clicking on your content. This might include e-commerce conversions (purchases), downloads, registering for a demo, and so on.
First you capture your prospect’s eyes. Then you engage and bring them to the point of action. From here, all other metrics stem.
Read on to discover the top 7 email marketing metrics that’ll make you a master in the engagement and conversion flow.
Email Analytics: The Top 7 Email Metrics and KPIs to Track
Clickthrough rate (CTR) is the gold standard for email marketers. It’s a quick and easy way to calculate performance for each email you send. From these individual sends, you can track overtime how your CTR changes.
The basics of (CTR) can be defined as the following: the percentage of email recipients that took action and clicked on one or multiple links in any given email.
A good click through rate is indicative of a lot of things, it’s determined by the content, which should include compelling visuals, tight copy and most importantly – front and center calls-to-action.
CTR performance implies that your audience is not only opening your messages, but actively taking the next step to engage with your content and learn more about your brand. CTR is a metric that is frequently used to determine success for A/B tests, as the intention is to find what changes get your subscribers to click more.
Obviously, the higher CTR percentage the better. If your click through rate is lacking, the other key email metrics and performance of your campaign is going to suffer.
Open rates are the simplest KPI to review. An Open rate is strictly an engagement metric. It’s literally the first step that anyone will ever take when they’re interacting with your brand through email.
Open rate metric tracks how many subscribers opened up the email that was sent, minus the emails sent that couldn’t be delivered for some reason (these are called bounces, we’ll review that soon).
Open rates are dependent on how great your email’s subject line was and if it resonates with your audience. Crafting compelling email subject lines is an art in itself. Likewise, emails that are expected such as transactional or post-purchase should have overwhelmingly high open rates.
It’s very rare for a brand to be too overly concerned with open rates. They are best used as a comparative metric that can be used to give insight on general audience engagement trends. But seeing as they’re so central to everything else and form the bedrock of engagement, they’re still an important metric to keep an eye on.
Now we’re talking the money metric. If nobody’s converting, nobody’s winning.
Your open rates and click-through rates get your subscribers through the door. But that’s just the first step of engagement. Now it’s time to make sure they walk out with something.
A conversion rate is determined by the percentage of email recipients who clicked on a link inside your email and then completed an action, such as downloading a resource or purchasing a product.
After a subscriber has clicked through your email, the usual next round consists of getting them to convert on your offer. For example, if you’re offering a product for sale, you’d consider anyone who bought to be a conversion. The same goes for if you were offering a free ebook, anyone who downloads it will also be considered a conversion.
Every email series and campaign should have a clear objective that leads your users to take a specific action.
The conversion rate determines how effective your email message is in relation to the business objective at hand.
Proper conversion rate analysis consists of both looking at the long-term email program-wide trends, as well as monitoring the individual campaigns sent out. High conversions are tied directly to how effective your call-to-action is. Testing this element on your email can help raise your conversions.
In order to measure email conversion rates, you’ll need to integrate your email platform with a web analytics solution like Google analytics. You can do this by generating unique tracking URLs for your email links which identify the source of the click that led to the conversion.
Conversion rates are fundamental for you to calculate your return on investment. When you’re able to quantify what you’ve spent with how many of your subscribers are converting, you can determine if the investment into an email program is worth it.
Return on investment (ROI)
What makes the C-suite swoon and smile and gets stakeholder buy-in?
Top line, bottom line any financial which-way you choose! This metric is one that everyone needs to track.
Return on investment is the total revenue made from an email divided by the total expenditure.
This is the basic formula for ROI. Depending on your methodology, you may prefer a different calculation.
ROI is clearly one of the most important email metrics to monitor because it’s accurately tied to the financial performance of your email marketing strategy. It can’t be overstated. Email is hands-down the channel with the highest average ROI.
As with any marketing channel, you should be able to determine to some degree, the overall ROI. This information can be plugged back into the larger financial picture of your advertising and marketing efforts.
ROI leads into an even deeper pool of financial related metrics. As you’ll be able to determine Life-Time-Value (LTV) and more. Key decision makers and those points of contact working on the email program will be able to confidently state that their channel is in fact driving real, tangible results.
Deliverability (Bounce rate)
When sending an email campaign, you want to track how many of your messages are actually reaching the inbox. Bounce rate measures how many of your subscriber’s email addresses didn’t receive your email. There are two types of bounces: soft and hard.
Soft bounces track temporary problems associated with email addresses and hard bounces track permanent problems associated with email addresses.
Your overall bounce rate is a percentage of total emails sent that couldn’t successfully complete the delivery to the recipient’s inbox.
Soft bounces might occur when a recipient’ has too full of an inbox or there’s a problem with their server. The subscriber’s server may hold these emails for a while, once the problem clears up they should receive them, or you can try to resend messages to soft bounces.
Be on alert when you see a hard bounce. These are the result of an invalid, non-existent or closed email address. You will never be able to reach a hard bounced address. Remove hard bounces as fast as possible, as internet service providers (ISPs) will penalize your sender reputation. Bounce rates are a major factor in determining a business’s reputation. Too many hard bounces can flag your company and make it look like a spammer.
Measuring your bounce rate in comparison to open rates will give you a solid overview of your subscriber list quality. A high percentage of hard bounces means that your list is filled with fake addresses, deleted ones or mistakenly written addresses.
Only one option for hard bounces – purge them.
You can decrease your bounce rates by requiring double opt-ins and by making sure your subscribers are committed and confirmed that they want to receive emails from your company.
This is one of those email marketing KPIs that you’ll want to keep as close to zero as you can.
List growth rate
Email list growth rate shows the rate that your email subscriber list is growing. It takes into account all of your new subscribers, unsubscribes and invalid emails in your list. Its one of the most straightforward KPIs as it shows if a list is healthy and growing.
We can’t escape entropy anywhere. Even your email marketing list will run low and shrink. People create new accounts, company emails disappear and some people stop using accounts all the time.
On average, the usual attrition rate comes out to about 22.5% expirations every year. Which is why you should always look for new ways to grow your list and keep current subscribers engaged.
Spam complaints need to be taken seriously. If your spam rate gets too high, you risk ruining your unique sender reputation.
There’s no complicated formula needed to calculate it as your email service provider will automatically track this metric for you.
Spam complaints are the scariest of all the email marketing KPIs. You want to keep this metric as low as possible. This will negatively affect your email deliverability. As more and more subscribers report your email as spam, providers will stop placing a priority on your sends and dump them straight in the junk folder. All other metrics will suffer.
Your spam complaint rate should always be under 0.1%
Even if your emails aren’t presented as spammy, you’ll need to still stay vigilant in a number of ways. Build trust with your email list by only accepting subscribers that are interested in receiving emails from your company. A big list might feel good, but it won’t matter if it has low deliverability, high spam complaints and disengaged nobodies.
It goes without saying that no one should be utilizing bought email lists.
Ethical email marketing aspires to keep a low spam complaint rate. Sometimes problems occur when subscribers have a hard time leaving your list. Always keep the unsubscribe button in a visible space. It’s required by CAN-SPAM compliance law.