Email marketing is an integral part of any business and has been the marketing backbone of many companies over the years. You can efficiently promote your products, services, or brand to the intended audience with email marketing.
Understanding the right metrics that determine the success of email marketing campaigns is very important. However, this is easier said than done. With so many different metrics that a business can track, things can get very confusing very fast.
In this article, we will look at some key metrics for email marketing campaigns and what they mean for your business. This article will mainly focus on advanced email marketing metrics that will help you measure the campaigns you have running and help you understand how to make them better.
The different metrics to understand and track
The following are the metrics that you need to understand and track to have a clear picture of how things are working for a specific email marketing campaign.
Open rate and click-through rate
While we did mention that we’ll be covering more advanced metrics, we can’t not mention open rates and click-through rates in an article about email marketing metrics. The open rate is the percentage of emails that the audience has opened compared to how many emails were sent. On the other hand, the click-through rate is how many people clicked on any link included in an email.
Open rates are one of the most important metrics for email marketing campaigns because they indicate what your subscribers think about your messages, and especially your email subject line. A high open rate means that you're doing something right with your campaigns; however, if you see your open rate going down or staying low for a long time, you should re-examine why this might be happening and how you can fix it (e.g., sending emails with more engaging subject lines).
The click-through rate shows how effective your emails are in getting someone to click on the links in them. You should pay attention to this metric because it can give you an idea about the campaigns that are not performing up to your expectations.
If you want to know more about open and click-through rates, check out our post on email marketing KPI examples.
Engagement over time
Even though having high open rates may look promising at first glance, they don't tell the whole story. Instead of focusing on individual metrics like open rate, you should measure how engagement with your messages evolves. This approach will allow you to notice trends in engagement right away which means that you can adjust your strategy accordingly. Engagement is a much broader term than opens or clickthrough rates and allows you to get a much clearer picture of whether you are moving in the right direction.
Your email marketing software should automatically collect engagement data and show it in a chart so you can easily monitor how your campaigns perform over time. Based on this information, you can make more accurate decisions about your email marketing campaigns.
Campaign Bounce Rate
One of the metrics you need to monitor is the bounce rate; this metric shows the percentage of people who didn’t receive your email for one of two reasons. These are either "this email address does not exist" or "delivery failure”. These errors may be caused by invalid email addresses, mistyped email addresses, typos in an address, etc.
If you want to minimize bounced emails, you should ensure that the emails on your list are valid. This can be a test that you perform every so often. You can also ensure that you set your initial optin settings to “double”, which means that people will have to verify their email before receiving anything from you.
While this might mean that the number of subscribers on your list does not increase as fast as it would had you been using a single opt-in, you’ll be able to ensure that the people on your list really want to get your emails. As a result, you’ll have a lower campaign bounce rate and more people engaging with your emails.
Email marketing segmentation is another thing that you should do to make your campaigns efficient. Here, you separate your list into segments to send the appropriate message to your subscribers at the time that’s just right.
For example, some people may not need a promotion about new products or upcoming discounts as much as they need helpful content that helps them solve a problem they’re currently facing. In other words, appropriate segmentation will help you improve overall engagement and maximize ROI from email marketing campaigns.
Email marketing effectiveness can be improved by looking at your campaign bounce rate and adjusting accordingly.
Customer Lifetime Value (CLV)
When it comes down to your company's success, there are many different things to take into account; however, one specific metric that can really help you understand how successful your business is doing long-term is the customer lifetime value (CLV).
This metric shows how much money an email client is worth to you throughout the period they are on your email marketing list. If you're selling products or services online, then adding up all sales that come from each client over time will give you their total CLV.
Calculating the customer lifetime value is easy:
CLV = Annual Revenue - Customer Acquisition Cost
This equation helps you determine whether it's worth investing in new customers at this moment or if you should focus on retaining your current ones. For example, if you're running a store that sells toys and the average annual spending for each customer is $300, if the cost to get a new client is equal to or higher than $300, it's not worth going after them.
This also means that it would be more beneficial to keep existing customers happy so you can increase their specific lifetime value.
Campaign Best Time
You need to know what days and times are optimal for sending out email campaigns because these periods will have the highest open rates and thus improve your results. This data can help you consider the best time to send emails when it comes to special offers, sale notifications, newsletters, etc.
In this case, after you look at all the right data, you can take advantage of email list segmentation (that we’ve mentioned earlier) and boost open rates during certain days and periods.
It would help if you also thought about when not to send out campaigns because, during these days and times, people are either less likely to use their emails or subscribers completely ignore them.
For example, holiday email marketing is a different beast when compared to sending email campaigns during the rest of the year. By understanding your campaign’s best delivery time, you’ll be able to get more bang for your buck.
Campaign Unsubscribe Rate
In email marketing, this metric shows how many people have decided to remove themselves from your mailing list. If the number of subscribers who keep unsubscribing is high (compared to your industry - more on this later), then there's probably something wrong with either your content or the way you deliver it to people.
To lower the unsubscribe rate as much as possible, avoid sending promotional messages frequently and focus more on valuable content that adds real value to an individual subscriber's life.
Well-known brands that send promotional emails frequently usually have the highest unsubscribe rates because people quickly realize that they’re just a number on a list. By sending too much promotional content, big companies risk coming off pushy and spammy, which will damage their brand's reputation and make people more likely to decide they’re getting spammed.
If too many people complain about spam, then your email service provider might decide to simply shut you down.
Revenue per email campaign
By tracking revenue per email campaign you can see how much return on investment (ROI) you get for each campaign that goes out. If this number is low, then it means that your campaigns aren't successful, which means that the emails are either not personal enough or people don't like something about them.
There is no one-size-fits-all solution to increasing ROI because it depends on your unique business/industry so use the data collected to make informed decisions about your future email marketing efforts instead of throwing in the towel.
Each email you send should be unique and relevant to each subscriber so that they don't feel like you're only sending out messages when you need something from them. Do not make the mistake of simply recycling mass campaigns because those days are over.
People are much smarter than that, which means that the more personal your content, the higher ROI will be recorded and the happier customers will end up being. This is a good thing for any business or brand.
The importance of comparing like with like: comparing your metrics to your industry
Every industry is different so it's important to compare like with like. For example, if you work in the consulting industry, then revenue per email campaign would be a great metric to track because clients pay for your services on an ad hoc basis; there's no sign-up fee or monthly subscription.
However, if you worked in the software industry, then it would be a good idea to monitor average revenue per user instead because that's how much each client spends on your product. You could even compare this metric with the average revenue per email campaign so you can see what the difference is and if there's an opportunity for improvement.
The best way to improve your email marketing efforts is by using A/B testing. You can change aspects of an email's design, layout, or even content and then send those different versions out to separate groups of subscribers to compare results. If one email does better than another, then you know exactly what tweaks need to be made, so that future campaigns follow suit.
Don't forget to track all of your email marketing metrics because there's no point in sending out an email campaign if you can't see how well it's doing afterward. This way you'll have a constant stream of data at your disposal which should help steer your future efforts in the right direction and hopefully improve ROI and customer satisfaction.
Remember that the more quality emails you send, the more opportunities you give yourself to increase revenue per subscriber & overall ROI for every campaign.
Top benefits of tracking email marketing metrics religiously
Let’s finally have a look at the benefits that await companies that know their numbers when it comes to email marketing.
Track how your audience acts after receiving a message from you
Understanding your audience's reaction to your messages is crucial if you want to increase the effectiveness of future campaigns, but it's also a great way of just knowing what sort of content they're interested in.
With this data, you can establish a positive relationship with new subscribers immediately, a relationship that will be beneficial for everyone involved. New users end up being more likely to open and click on your messages which means the likelihood of them making a purchase sooner rather than later increases.
Identify the sources of success and what didn't work as well.
By monitoring numerous aspects of your campaign, it becomes possible to identify which sources are generating more interest than others. You can then focus on maintaining or improving these specific efforts while abandoning those that aren't performing as well; this makes future campaigns much more effective because they'll have a higher chance of success.
Focusing on what gives you a higher conversion rate is a great idea since, at the end of the day, conversions are what make a business successful. This email marketing metric is one of the most important ones to consider and should be used as a guiding light when making any type of email marketing strategy decision.
Establish trust with your audience
Delivered emails, open rates, and link clicks can all help a marketer establish trust with their audience. Those users who know that you're providing them with interesting information will keep coming back for more.
Trust is vital for a marketer's relationship with their customers because it allows them to get creative and experiment with new ideas. It also gives them the freedom of being able to test new email marketing strategies without having to worry about how it will affect the engagement of their audience.
This freedom allows them to be confident that if anything goes wrong, they can just revert to old patterns that worked.
As a marketer, you'll be able to make better decisions in the future when knowing what has worked in the past. You can still give your subscribers compelling content even if something doesn't go as expected; this makes every campaign run more effectively & efficiently.
As you can see, there are many benefits to understanding and acting on key email marketing metrics. Some of these might sound like common sense, but did you realize that all of the above could help build better relationships with customers?
With accurate data at hand, you can change what’s not working (while keeping what is) and increase customers’ level of trust in your brand/business.
The more information you have about how people view your product or service, as well as what they like and don't like, the easier it will be for you to ensure that the number of emails you send all have the desired effect - whether that’s to educate, inform or invite to make a purchasing decision.
Engaged email clients can be a goldmine for business. Never underestimate the importance of tracking email metrics when it comes to getting an ever-increasing ROI for your business.