Email marketing is a numbers game. You send 1,000 emails; 450 are opened; 100 are clicked-through; and 7 conversions are made. Being that email marketing is a numbers game, it is critical to understand the numbers—and most importantly to know what the metrics mean and which ones you should be measuring.
Using your Email Service Provider’s reporting to conduct on-going trend analysis you can easily measure the email marketing metrics explained below:
Click-Through Rate (CTR)
Terminology: The amount of email recipients that click on your content to go through to your website/landing page. The calculation is uber simple, you divide the emails delivered by the number of click-throughs you get.
Purpose: CTR is quite possibly the most important metric to your campaign. This tells you how effective your emails are and it gives you the best analysis to improve your campaign. If you have a low CTR you will want to change your message, type of email sent (ex. promotional, newsletter, transactional, etc.) or do a survey to find out what your email list finds interesting.
Conversion Rate
Terminology: This is the MOST important metric because it tells you how many people will take action on your email campaign. This means they become a qualified lead, active member, get a subscription, make a purchase, etc. Conversion unfortunately is the hardest metric to measure with numbers though because it depends on outside factors like the quality of your website, your prices, checkout, website security settings, etc. Many email marketing professionals consider a CTR rate a better metric because it doesn’t rely on outside factors.
One thing that a Conversion Rate can tell you is how successful your landing page is. If you have a high CTR but a low conversion rate then your email marketing campaign is doing well but your website (or some factor of your website) is performing poorly, at least in terms of conversions. For tips to improve your conversion rate click here.
Delivery Rate
Terminology: Delivery rate is similar to the bounce rate as it subtracts the hard and soft bounces (hard is a permanent bounce like when the email address doesn’t exist, and soft is a temporary bounce like the inbox is full) from the number of emails sent, then dividing that number with the gross number of emails sent. Your delivery rate is affected by the quality of your email list and by the spam blocks of your recipients (and your status with their ISPs).
Purpose: The delivery rate is the real metric that you can judge your campaign success from, after all if the email doesn’t arrive there is no possibility they can open it or become a conversion. A strong delivery rate gives you a solid base for click-through rates and conversions. An ideal delivery rate is 95%+.
Open Rate
Terminology: This measures how many recipients open your emails (for tips on how to improve your open rate click here).
Purpose: This isn’t a popular metric given that your delivery rate tells you how many people receive it, your CTR tells you how many people go to your website and your conversions tell you how many people buy. It can also be unreliable because of spam blockers and content filters that mess with your open rate metrics.
Sharing Rate
Terminology: The number of recipients who shared your message socially (for this you need a ‘share this’ style social button on your emails).
Purpose: If your subscribers find your content useful and/or interesting they will share it socially. If you have a high share rate your content is quality. The more shares the more business and buzz you will generate with your campaign.
ROI Per Email
Terminology: Your ROI for an email marketing campaign is the average amount of money you make per email sent. The calculation is the total revenue generated from your campaign (this can be measured as you measure conversions) divided by the number of emails sent.
Purpose: This metric is worth it if you have to justify your email marketing campaign to investors, partners or yourself. It is also helpful if you are considering investing your marketing dollars into another type of marketing.
Bounce Rate
Terminology: The bounce rate describes how many emails that are failed to be delivered to the recipients inbox. If you use Hotmail or Gmail for a personal account and your email is ‘bounced’ you will receive a Delivery Status Notification message saying something like “Delivery to the following recipient failed permanently”. Your ‘bounce’ rate is how many emails you send versus how many safely arrive in the recipients inbox.
Purpose: Bounce rate is an important metric because it measures the effectiveness of your email list and changes your status with ISP spam detectors. If you have a lot of bounces you should be removing those emails from your list—once removed you have a better idea of the real length of your list. Removing bouncing emails will help you better judge your metrics, and it will help prevent your status with ISP spam detectors (because they use primarily bounce rates to detect spammers).
List Growth Rate
Terminology: This one is fairly self-explanatory, it measures how fast your email list is growing. To get your growth rate take your list number, subtract the bounces and add the new subscribers. If you then divide that number by the numbers on the original list you have your growth rate. For tips on growing your email list click here.
Purpose: Also fairly self-explanatory, the more working emails you have the better your email marketing will be. Your list will change regularly all people opt out, opt in, change email addresses, change spam blockers, etc. A fluctuation of up to 20% of your list is natural; anymore than that though and you need to re-evaluate your list and email marketing strategy.
Robin Wilding is a professionally trained Canadian journalist striving to bring journalistic-era intergity to online media. She has a second degree in Political Science--with a focus on International Relations and the developing world. Currently Robin is a contributor to several technology publications, including Brajeshwar.com, SocialTechnologyReview.com, HostingIndustryWatch.com, AnimationCareerReview.com and CompareBusinessProducts.com. She also works for several web developers; and does ghost writing for several high level executives within the technology sector. Robin's work is showcased in her portfolio: http://shownd.com/robinwilding
