Tracking and measuring the effectiveness of your email marketing campaigns is essential to creating a data-driven lifecycle marketing strategy.
If you’re just making assumptions about what is and isn’t working… Well, you know what they say about assumptions.
In this article, we’re going to discuss the importance of tracking certain key performance indicators and what to do if your email marketing KPIs aren’t where they should be.
Conversion Rate
At Quantum, we specialize in email marketing for online stores. So for us, conversion rate is one of our most important metrics.
The conversion rate is the percentage of conversions for a particular campaign. So if you send out 100 emails and 5 people convert, you have a 5% conversion rate.
Keep in mind, a conversion can mean different things to different organizations. For most ecommerce stores, a conversion is a sale. But a conversion could also be registering for an event, signing up for a demo, scheduling a meeting, downloading an ebook, etc.
If you want to improve your conversion rates, pay attention to your calls to action (CTAs). Make your CTAs easy to find and easy to understand (tell them what they get if they click!). A great way to make your CTAs pop is with bolded text or a bright-colored button.
Also, make sure the destination is also optimized for conversions. The destination is where the user goes after clicking on a CTA. For instance, if you already know a customer’s name and address, make sure that information is pre-populated on your website when they click your link and are ready to purchase.
Click-Through Rate (CTR)
Directly connected to the conversation rate is the click-through rate. The click-through rate measures the number of clicks in an email.
It can be calculated by dividing the total number of times subscribers click in an email by the total number of emails sent.
CTR is important because it can help you identify friction within your sales process. For example, if you have a very high CTR but a very low conversion rate, that could indicate that your emails are performing great, but something on your website is getting in the way of a conversion.
Just like with conversion rates, you should pay attention to your CTAs to improve CTRs. We always recommend A/B testing or multivariant testing to properly optimize CTAs.
Click to Open Rate (CTOR)
Your click to open rate (or CTOR for short) is the number of unique clicks divided by the number of unique opens. For example, if 100 open your email and 50 people click on something, then your CTOR is 50% (great job!).
CTOR is different than CTR because the CTOR is based on how many people actually open your email (instead of how many people you sent the email to). This is beneficial because CTR is affected by deliverability and open rates, CTOR ignores those factors and focuses on the people who received and opened your email.
Many email marketers prefer looking at CTOR over CTR because it can more accurately measure the success of specific email copy or email templates (especially if you’re using A/B tests).
Number of Emails Sent
This one is obvious but necessary. If you aren’t tracking the total number of emails sent, it is impossible to measure conversion rates, click-through rates, delivery rates, etc.
Bounce Rate
The bounce rate measures how many emails are not delivered to a recipient’s inbox. The equation is very straightforward:
(# of bounces / # of emails sent) x 100 = email bounce rate
So, if you send 100 emails and 5 of them were not delivered, then you have a 5% bounce rate.
There are two types of bounced emails: hard and soft.
A hard bounce is permanent, meaning the email address does not exist. This can happen when someone leaves a job and their account is deleted or if there is a typo in the email address.
A soft bounce is temporary. This happens when there is something wrong on the receiving end of a message.
If you have a high bounce rate, there might be a lot of spam entries on your subscriber list. You can reduce your bounce rate with things like double-opt-ins for new subscribers, cleaning your lists, segmenting your lists and avoiding spam designations.
Delivery Rate
Your delivery rate is essentially the opposite of your bounce rate – it is the % of emails that actually make it to people’s inboxes.
If your delivery rate is low (or your bounce rate is high), you might be getting flagged as spam by the recipient’s email service provider.
Gmail, for instance, has an aggressive spam filter, and even legitimate senders are sometimes blocked. If this happens to you, talk to a deliverability expert (like us!). A lot of email marketers can send good emails, but not every marketer knows about email deliverability and how to properly rebuild your sender reputation and get out of the spam folder.
Unsubscribe Rate
Unsubscribe rate is also pretty straightforward – it’s the number of people that unsubscribe on a specific email.
If a campaign has a high unsubscribe rate, the messaging clearly isn’t resonated with your audience. One of the best ways to turn things around is to segment your email lists and send more personalized messages. You can make emails more personal and reduce your unsubscribe rate by adding in the recipient’s first and last name, address, zip code, birthday, etc.
Spam Complaints
If your email recipients are flagging your emails as spam, that’s a huge problem. If you have high complaint rates, you need to clean your lists and ensure that all of your email subscribers have opted in to receive messages from you.
Aside from that, make sure your emails are providing legitimate value to your audience. Value can come in many forms – it can mean enticing discounts, entertaining news, funny GIFs, etc.
Open Rate
Email open rates used to be the defining metric of a successful email marketing campaign. Nowadays, this metric isn’t as reliable and you shouldn’t use it as a primary KPI.
That said, after iOS 15 comes out and you have time to recalibrate your internal benchmarks, you can still use open rates as a way to measure subject line effectiveness.
To improve your open rates, try to personalize your subject lines using user data.
Email ROI
We mentioned that conversions are the most important metric for ecommerce stores, but conversions are worthless if your acquisition costs are too high. That’s why measuring your email marketing return on investment (ROI) is so important.
Thankfully, email marketing ROI is usually much greater than traditional forms of marketing like paid advertising.
To measure your email marketing ROI, divide your net email revenue with your email marketing costs. While you can measure the ROI on individual campaigns, sometimes it is more helpful to look at longer periods of time (like months or quarters). The reason for this is because the goal of every email isn’t to generate revenue. Taking a longer-term view will help provide your big-picture ROI.
While there are a million ways to measure campaign performance, these email marketing metrics should help you establish a baseline. Start by looking at the average performance of recent campaigns using these KPIs and compare future campaigns with your average.
From there, you can start identifying weaknesses in your email marketing strategy and experimenting with new approaches to subject lines, CTAs, design and deliverability.
If you need help making sense of your email marketing KPIs, request a free audit and we’ll perform an in-depth analysis for you.
