Email marketing should be at the center of your e-commerce strategy. But how do you know which key metrics to focus on, and how to measure each? Quit wondering whether you’re judging your email marketing performance with the right metrics — experts clear the air on what, exactly, to start measuring.
Roughly 46 years ago, the first email was sent.
Twenty years after that, in 1991, the very first commercial email was blasted out from a computer company called Digital Equipment Corporation (now a part of Hewlett-Packard). Though some customers complained, the mass email resulted in $13M worth of sales.
Ever since, savvy marketers across the world who have made email the nucleus of their strategies have been trying to maximize its potential and figure out how to measure its effectiveness.
Advancements in marketing technology (including the explosion of ESPs) — along with a heightened awareness of the value that email provides and a more microscopic concentration into its potential — have made email marketing a core focus for most marketing teams.
|Savvy marketers w/ #email as the nucleus of their strategy must figure out how measure its effectiveness CLICK TO TWEET|
Email has been proven as the single most effective digital marketing channel — yet it remains complex in the sense that you could pick and measure a multitude of metrics.
The key is to focus on the metrics that best align with your goals and campaign objectives, and focus on those.
So, we’ve consulted renowned email experts to identify 12 of the most telling and most impactful metrics to help you manage, plan, and optimize your email campaigns over time.
Which Email Marketing Metrics Matter Most?
With so many numbers up in the air, it’s important for marketers to have an explicit understanding of critical metrics. Here are 12 crucial email marketing metrics — divided, for organization’s sake, into the following categories: Deliverability & Device, Response & Engagement, and Action, Purchase & Financial.
Deliverability & Device
1) Deliverability Rate
Accepted rate shows the amount of emails delivered vs. those actually sent, as a percentage. This metric measures overall deliverability, and is a good indication of list quality.
2) Bounce Rate
If you’re like me, you’ve heard the term “bounce” thrown around often when talking about email marketing. But what does it actually mean?
As is industry standard when sending email, an email is assumed to be delivered unless the receiver of that email (Gmail, Yahoo, Microsoft, or some other email inbox provider) rejects the email and returns a bounce back to the sender. In Emarsys, those bounces are recorded and reported to end users of our platform.
Not all bounces are the same. Phil Schott, Senior Manager of Deliverability at Emarsys, recommends separating bounces into the following categories:
- Soft Bounce: Typically caused by transient or temporary issues such as a full mailbox or mail server issues on the receiver’s end. These usually don’t cause sender reputation damage and are unlikely to recur on subsequent sends. Soft bounces should be tracked and any address which soft bounces multiple times within a few days or weeks (depending on sending frequency) should be suppressed or the receiver contacted to see if the receiver can resolve the issue.
- Hard Bounce: Typically caused by some sort of permanent fatal error such as an invalid email address that no longer exists or is otherwise no longer available to accept email. Sending to too many invalid addresses is a sign of poor quality subscriber data, can cause damage to sender reputation, and can lead to blocking, blacklisting, and/or spam folder delivery. Most senders with clean data have hard bounce rates consistently below 5%. With few exceptions, addresses that have hard bounced should be permanently suppressed so that those addresses do not receive future campaigns.
- Block Bounce: Typically caused by a receiver rejecting email from a sender due to user feedback (complaints), low user engagement, the email having spam-like characteristics, filtering by antispam measures, or a listing on a third-party blacklist. Block bounces usually indicate that the mail being sent is unwanted or unexpected because of poor list hygiene practices, poor opt-in practices, or sending to old data. Sending to addresses that have been block bounced should be suspended until the root cause of the bounces can be addressed by the sender and the sender has taken action with the receiver to get the filtering, blacklisting, or block removed.
3) Device Usage
Are you able to see how many users opened your email on their smartphones, vs. on a tablet or laptop? Device usage data is easy to understand and immediately impactful. If you see that 85% of your opens for a particular campaign came from a smartphone, you suddenly have a good idea of how mobile users are engaging with that campaign, and can focus your appeal, design, and content for follow-up, mobile-first emails. You can also easily see conversions by device type, too, allowing you to see if trends exist among different devices.
On average, 50-60% of emails are opened on mobile. All of your email templates must be responsively designed.
Response & Engagement
4. Open Rate
Open rates are often misleading but are nonetheless a widely popular (albeit sometimes “vanity”) metric which deserves inclusion on this list, and should be at least considered when evaluating overall success. Open rates generally indicate how captivating and promising your subject lines are. However, be cautious when looking at open rates, and drawing conclusions.
Open rates are most useful when measured over time, developing a benchmark to gauge general appeal and long-term trust. You can segment opens, too, by any variable (device, region, demographic, etc).
The industry average ranges between 20-30%.
Adam Q. Holden-Bache, email marketing expert, told me that, in addition to open rate, he recommends delving deeper and looking at:
- Unique Confirmed Opens: number of unique recipients that have opened an email
- Total Confirmed Opens: total number of opens per recipient
- Open-to-Conversion Rate: calculated as a percentage of opens that also converted. As an example, if you had 400 opens, and 25 conversions from your campaign, your open-to-conversion rate would be 6.25%. Measure this over time for a clearer benchmark.
5. Click-Through Rate
The email click-through rate (CTR) is the percentage of recipients that click on a link contained within your email. Typically, tracking codes are automatically attached to email links by your marketing automation platform. You can determine your CTR by dividing the number of unique clicks by the number of emails delivered, then multiply by 100.
6. Click-to-Open Rate
This is the portion of recipients (openers) who click on at least one link within the body of the email. It’s a good measure of user intent/interest.
You can figure out click-to-open rat with this formula: unique clicks/unique opens x 100.
Many email experts will agree it’s more indicative of engagement than just CTR.
It’s vital that B2C and eecommerce brands build their subscriber base in order to cultivate an opted-in audience whom they can communicate with.
Opt-in subscribers have willingly exchanged their valuable personal data with an expectation of some promise you have enticed them with, whether promotional deals, a loyalty program, an e-newsletter, or a combination of these.
This metric — monitoring the number of contacts who opt in (and opt out) to receiving emails from your brand — will help you understand how strong, enticing, and authentic the overall value proposition that you’re offering truly is.
Subscriber growth is most meaningful when measured over the long haul (every couple of months or so).
8. Unsubscribe Rate
Unsubscribe rate is a decent indication of relevance, appeal, and overall value of your message. It’s measured as a percentage of total users who unsubscribe with each delivery. But be sure you have perspective on what “unsubscribe” really means.
“Caution: marketers often brag about campaign trends that generate low unsubscribe rates. That’s meaningless because unsubscribe rates are almost always low, ranging from 0.3% to 1% on average. The unsubscribe rate measures active disengages, not those who fade into inactivity.” (Via Econsultancy, The Fundamentals of Email Marketing, 2016)
Kath Pay | CEO & Founder, Holistic Email Marketing | @kathpay
|“Unsubscribe rate shows active disengagers, not those who fade into inactivity” says @kathpay #email CLICK TO TWEET|
If you want to measure those who actively opt-out from receiving emails from you, unsubscribe is a good metric to benchmark over time. If you want to measure inactivity, look to open rate or click-to-open rate.
Action, Purchase, & Financial
9. Conversions, Downloads, Registrations, & Contacts (In-Email)
Many email marketing teams are starting to reduce friction and steps required by customers to complete a desired action. To do so, they’re embedding forms, sign-up CTAs, and even purchase buttons directly within dynamic emails.
As a result, conversions can happen “in-email” based on fields or forms marketers have included in the body of the email. These often include:
- Downloads: May include a button to grab a recipe, an eBook, or other digital asset.
- Registrations: Could include form fields to sign up for an event, course, or separate update.
- Contact/Form Submissions: May include the number of contacts who filled out a ‘Contact Us’ form or submitted feedback.
“The metric that matters the most is “purchased.” However, the goal of some campaigns may not be a purchase, but to complete another business goal — sign up for an event, download a whitepaper, take a survey, etc. “Conversions” [that can be attributed to email] covers the gamut, and will help email marketers best analyze their action-oriented campaign goals.”
|Conversion-related metrics are most important in your #emailmarketing, says @AdamHoldenBache #email CLICK TO TWEET|
10. Value of an Email Address
How much is an email address worth to your organization? The value of earning an email address is one of the most beneficial metrics to understand for your organization.
Kath Pay offers an equation to help you calculate this valuable metric. Multiply the lifespan of an address by the quotient of your annual email revenue and your average list size:
For instance, if the lifespan of an address was 3 years, yearly revenue $800K, and list size 90,000, the calculation would be: 3 years x $800K/90,000 = about $27 per email address.
You can now use this to determine how much money you’re willing to spend on acquiring a customer.
11. Revenue/Leads Per Email
In B2C, transaction-oriented campaigns, at the end of the day, it all comes down to ROI. Revenue generated from email campaigns, then, is one of the most crucial metrics you want to be sure to get right. Over time, this metric will help you understand not only how different kinds of campaigns perform, but also how much you can expect, on average, from each recipient.
You can determine this figure by dividing total revenue earned from a campaign by the number of emails delivered (or opened).
12. Open/Click Reach
This unique metric will help you understand the unique engagement of your emails.
According to Kath Pay:
- Open Reach is the total number of unique opens divided by the total number on your subscriber list or segment
- Click Reach is the total number of unique clicks divided by the total number of subscribers in the list or segment
These metrics can help you identify the behavior change that a subscriber has. Once you can start to draw causal relationships between these metrics and conversions/revenue, you’ll be able to prove the impact of a subscriber. These metrics are most useful when measured over a year to 18 months at the minimum, and reported on consistently, over time.
As many e-commerce marketers know, successful email marketing doesn’t happen overnight. These metrics are most meaningful when applied to understand how engaging, enticing, informative, appealing, and value-oriented your email program really is, over an extended period of time.
And, as is evident, there’s not necessarily a single most important metric as it depends on your goals.
“The most important metric is the one that matters most to your objectives,” Pay told me. “That’s probably not what you were hoping for. You wanted us to say ‘open rate’ or ‘click-through rate’ or ‘conversion rate’. Picking one metric as the Holy Grail of email marketing is simple, but it misses the point.”
There are dozens and dozens of high-level and more granular metrics that you can and probably ought to explore. But if you’re looking to narrow it down to a core few, start with a few that are most relevant for your program, and consistently report on them.
Over time, you’ll be able to find trends and, ultimately, draw some conclusions about what works, what doesn’t, and then divulge opportunities to improve.
Editor’s note: huge thanks to both Adam Q. Holden-Bache for helping me gain clarity around most valuable metrics and for offering recommended categorization; and Kath Pay for sharing this comprehensive email marketing guide she created in conjunction with Econsultancy and allowing me to share miscellaneous insights from it.
Many email teams prefer to select their own email metrics, and use a centralized, high-level summary dashboard that collects and displays all these numbers in a single place. This can help when comparing specific data points, then tweaking certain initiatives that aren’t working well. Click here if you’re interested in learning more about what this looks like within Emarsys’ dashboard, or here to learn about how our email marketing tools can help you personalize your customer interactions via the most effective digital channel in the world.