Despite newer platforms, such as social media, email continues to be a particularly effective medium for connecting with audiences. The potential return on investment for email marketing is significant. But to maximize this potential, businesses need to track the right metrics.
Understanding Email Marketing
Email marketing is a form of direct marketing that uses electronic mail as a means of communicating commercial messages to an audience. It helps businesses promote products or services, maintain customer relationships, increase brand awareness and more. With its capabilities for targeting and personalizing messages, email marketing can be a powerful tool in your marketing strategy.
Key Metrics for Email Marketing Campaigns
1. Open Rate
This metric shows the percentage of recipients who open an email. It’s a straightforward way to measure whether the subject line is enticing enough to prompt opens. For example, if you send an email to 100 subscribers and 20 of them open it, your open rate is 20%.
2. Click-Through Rate (CTR)
CTR measures the percentage of recipients who click on one or more links within the email. A high CTR indicates that the email’s content resonates with the audience. For instance, if 20 people open your email and five of them click on a link, your CTR is 25%.
3. Conversion Rate
Conversion rate is the percentage of email recipients who click on a link within an email and complete a desired action, such as making a purchase or filling out a form. Suppose you send out an email promoting a sale on your website. If 100 people click the link to your sale webpage, and 10 of them make a purchase, your conversion rate is 10%.
4. Bounce Rate
This metric shows the percentage of the total emails sent that could not be delivered to a recipient’s inbox. “Hard” bounces are the result of invalid emails, while “soft” bounces are temporary issues, such as a full inbox. Keeping your bounce rate low is essential for maintaining a healthy sender reputation.
5. Unsubscribe Rate
This is the percentage of your subscribers who opt-out of your email list after receiving an email. It can provide insights into whether your content is meeting your audience’s expectations. A sudden increase in the unsubscribe rate could indicate a disconnect with audiences, and should prompt a review of your email marketing strategy.
6. Email Sharing/Forwarding Rate
This measures the percentage of recipients who clicked on a “share this” button to post your email content to a social network or who forwarded the email. High sharing rates indicate that your content is not just compelling, but compelling enough to share with others—a good sign for your brand.
7. List Growth Rate
The rate at which a new subscriber is added to your email list signals the health of your email marketing strategy. If more people are subscribing than unsubscribing, you’re on the right track.
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8. Spam Complaint Rate
This measures the percentage of recipients who marked your email as spam. A high spam complaint rate is concerning and could lead to your emails being blocked by email service providers. Ensuring your emails provide value and are sent to individuals who have opted-in to your list can help reduce spam complaints.
9. Email ROI (Return on Investment)
Email ROI is the overall return you’re getting from your email campaigns, calculated as revenue minus expenditure, divided by expenditure. Email ROI gives you a clear picture of the profitability of your email marketing campaigns.
Suppose you spent $1,000 on an email marketing campaign. The cost includes the email marketing software, design, content creation and other associated costs. Then, as a result of this campaign, you make $5,000 in sales that you can directly trace back to the emails.
Your email ROI would be calculated as follows:
ROI = [(Revenue – Cost) / Cost] x 100% [($5,000 – $1,000) / $1,000] x 100% = 400%
This means that for every dollar you spent on the email marketing campaign, you made back $4–a substantial return on your investment. Monitoring this metric helps you understand the profitability of your email marketing efforts and can inform future budget allocation.
10. Delivery Rate
This is the percentage of emails that actually end up in your subscribers’ inboxes. A low delivery rate indicates problems with your email sending practices or suggests that a lot of your emails are being marked as spam.
11. Click-to-Open Rate (CTOR)
This metric provides insight into the relevancy and quality of your email content. It’s calculated by dividing the number of unique clicks by the number of unique opens, then multiplying that number by 100 to get a percentage. A high CTOR means your message is compelling and encourages recipients to act.
For example: you send an email to your customer base, and 200 recipients open the email. Out of these 200 recipients, 40 people click on a link within the email.
The CTOR is calculated as follows:
CTOR = (Number of Clicks / Number of Opens) x 100% (40 / 200) x 100% = 20%
A 20% CTOR means that out of all the people who opened your email, 20% of them engaged further by clicking on a link within the email. This metric is valuable because it measures the relevancy and interest of your email content for those recipients who have opened it.
12. Engagement Over Time
This is more of a broad metric that analyzes when and how your subscribers are interacting with your emails over a given time period. This can provide insights into the best times to send emails and how your audience’s engagement changes over time.
Best Practices for Email Marketing
To get the most out of your email marketing campaigns and to optimize the metrics mentioned above, it’s crucial to follow some tried-and-true best practices.
1. Segment Your Email List
Segmenting your email list helps you send more personalized, targeted emails to your subscribers. You could segment your list based on customer behavior, demographic information, purchase history and more. Personalized emails often have higher open rates and conversion rates because they’re more relevant to the recipient.
2. Use Engaging Subject Lines
The subject line is often the first thing your recipient sees, so make sure it’s enticing and gives a clear idea of what’s inside the email. Avoid using all caps or exclamation points, as these can appear spammy and might decrease your open rates.
3. Test Different Elements
Regularly A/B test different elements of your emails such as subject lines, call-to-actions, images and content placement. By doing this, you can gain insights into what resonates most with your audience and optimize your emails for better results.
4. Automate When Possible
Email automation can save you time and allow for more personalized communication with your subscribers. For example, setting up a welcome email sequence for new subscribers can help engage them right from the start.
5. Regularly Clean Your Email List
Regularly remove inactive subscribers from your email list. This can help improve your deliverability rate and ensure that your emails are being sent to people who are interested in your content.
6. Track Your Metrics
As discussed above, tracking the right metrics is essential to understand how your email marketing is performing and where there are areas for improvement.
By adhering to these best practices, you can ensure your email marketing efforts are effective and continue to drive results for your company or brand.
Final Words
Keeping tabs on the right metrics can transform your email marketing campaigns from good to great, guaranteeing that your message is not just reaching the masses, but sparking engagement, driving conversions and building lasting customer relationships.
Ready to take your email marketing to the next level? At Gravital, we create customized, data-driven email marketing strategies that resonate with your target audience. Talk to us to discover how we can help you leverage key email marketing metrics for optimal business success.
