Your Complete Guide to Measuring Email Marketing Success

by Pamela Vaughan

Date

December 5, 2011 at 11:32 AM

email envelope The following post is an excerpt from our new ebook, An Introduction to Inbound Marketing Analytics . Learn how to measure your entire marketing program by downloading the complete, free guide here .

To assess your email marketing performance, you must conduct ongoing trend analysis of several key metrics. That way, you can compare each campaign’s performance against your own averages to know whether a specific campaign outperformed or underperformed your internal email benchmarks.

Your email service provider (ESP) should provide a wealth of reporting on each campaign and on your ongoing email performance. Here, we'll cover the most important email metrics to measure and how you can use them to improve the performance of your email marketing program overall.

Bounce Rate

Definition: The percentage of total emails sent that could not be delivered to the recipient’s
inbox, known as a “bounce”

How to Use: Use this metric to uncover potential problems with your email list. There are two kinds of bounces to track: “hard” bounces and “soft” bounces. Soft bounces are the result of a temporary problem with a valid email address, such as a full inbox or a problem with the recipient’s server. The recipient’s server may hold these emails for delivery once the problem clears up, or you may try re-sending your email message to soft bounces. Hard bounces are the result of an invalid, closed, or non-existent email address, and these emails will never be successfully delivered. Instead, you should immediately remove hard bounce addresses from your email list, because internet service providers (ISPs) use bounce rates as one of the key factors to determine an email sender’s reputation. Having too many hard bounces can make your organization look like a spammer in the eyes of an ISP.

Delivery Rate

Definition: The percentage of emails that were actually delivered to recipients’ inboxes, calculated by subtracting hard and soft bounces from the gross number of emails sent, then dividing that number by gross emails sent

How to Use: Your delivery rate sets the stage for email success or failure. To have any chance of engaging a customer or prospect with an email campaign, that message has to get
delivered to their inbox. Look for a delivery rate of 95% or higher. If your delivery rate is slipping over time, you may have problems with your list (e.g. too many invalid addresses). If one particular campaign has a lower than average delivery rate, examine the subject line and content of that message. Perhaps there was some element that may have been flagged as spam by corporate firewalls or major ISPs, causing many more message than usual to be blocked.

List Growth Rate

Definition: A measurement of how fast your email list is growing. Calculate your growth rate by subtracting opt-outs and hard bounces from the number of new email subscribers gained in a given month. Then, divide that number by the original list size.

How to Use: Email list growth rate is important because a healthy email marketing program needs to be continually refreshed with new names. Many of the addresses on your email list will naturally “go bad” over time, as people change jobs, switch ISPs or email programs, or just forget their passwords and create new accounts. According to the popular marketing resource MarketingSherpa, the natural churn rate of an email list can be 25% annually or higher, which is why you must continually work to add new contacts to your email database.

Click-Through Rate (CTR)

Definition: The proportion of the audience who clicked on one more links contained in an email message

How to Use: Organizations can calculate CTR either by dividing unique clicks by the number of emails delivered, or by dividing total clicks – including multiple clicks by the same recipient – by the number of emails delivered. Either method works, as long as you use the same approach consistently.

Monitoring email CTR is a cornerstone of email marketing analytics, because the CTR indicates whether the message was relevant and the offer compelling enough to encourage recipients to action. But CTR can vary widely by the type of message sent. For example, email newsletters often have higher CTRs than promotional messages, and transactional messages – such as emailed purchase receipts – often have the highest CTR of all the messages your business sends. For that reason, it’s best to benchmark your CTRs according to the different types of emails you send.

Email Sharing/Forwarding Rate

Definition: The percentage of recipients who clicked on a “share this” button to post email
content to a social network and/or who clicked on the “forward to a friend” button

How to Use: Sharing rates are another indicator of the value and relevance of your email messages. For example, if your subscribers find your email newsletter articles compelling enough to share with their peers, you’ve likely hit on a hot topic for your audience. Likewise, email offers that get shared or forwarded outside of your own house list can end up being your best performing campaigns, because you’ve drastically increased the reach of that
message by tapping into the viral nature of your subscribers’ social networks. Watch your sharing rates carefully to discover which types of articles and offers tend to get shared the most, and use that knowledge when planning future campaigns.

Conversion Rate

email click Definition: The percentage of recipients who clicked on a link within an email and completed a desired action, such as filling out a lead generation form or purchasing a product

How to Use: Conversion rate is the ultimate measure of an email campaign’s effectiveness. The higher your conversion rate, the more relevant and compelling the offer was for your audience. However, conversion rates are dependent on factors beyond the original email message, such as the quality of your landing page.

For example, if a campaign underperforms based on your targeted conversion rate, take a close look at the landing page you linked to for reasons why recipients who clicked on a link might not have completed the process. You may find the landing page’s headline or copy needs improvement, or that a registration form or checkout process was too confusing or clunky, causing many visitors to abandon the process.

Measuring conversion rate requires integration between your email platform and your web analytics. You can perform this integration by creating unique tracking URLs for your email links that identify the source of the click as coming from a specific email campaign.

Revenue Per Email Sent

Definition: A measure of the ROI of a particular email campaign, calculated by dividing the total revenue generated from the campaign by the number of emails sent

How to Use: This metric is ideal for ecommerce marketers who generate a lot of direct sales from email campaigns. Again, it requires integration between your ESP and your ecommerce or web analytics platform . If you are already tracking conversion rates, you also can collect the order value for each conversion to perform this calculation.

Unreliable Email Metrics

Open Rate: Open rate is a metric that many marketers use to measure the success of their campaigns, but it’s an unreliable gauge for several reasons. Most importantly, an email is only counted as ‘opened’ if the recipient also receives the images embedded in that message, and a large percentage of your email users likely have image-blocking enabled on their email client. This means that even if they open the email, they won’t be included in your open rate, making it an inaccurate and unreliable metric for marketers, as it underreports on your true numbers.

Unsubscribe Rate: As with open rates, the unsubscribe rate isn’t a reliable picture of the health of your email list. Many subscribers who are tired of receiving email messages from your brand won’t bother to go through the formal unsubscribe process. They’ll just stop opening, reading, and clicking on your email messages.

Again, tracking your click-through rates and conversion rates is a better way to monitor subscriber engagement and interest. But checking your monthly unsubscribe rate is helpful for calculating your overall list growth rate, and to watch for sudden spikes after a particular email campaign.

To l earn how to measure your entire marketing program , downloading the complete, free ebook, An Introduction to Marketing Analytics here .

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