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By: Ben Bauks
If you’re not sure whether your email marketing campaigns are delivering results, you need to ask yourself two questions. First, do you have clearly articulated goals and, second, are you effectively measuring progress towards those goals?
A surprising number of small and medium size businesses invest a lot of time and energy creating email campaigns with vague objectives, or no objectives at all, other than increasing general awareness of their products and services. Your email marketing campaign should be directed to a specific, measurable outcome, like growing your subscriber list, generating new leads, or improving conversion rates.
Track Different Metrics for Different Goals
The metrics you need to track are a function of the goal of your email marketing campaign. For example, if your goal is to grow the top of your funnel by driving more traffic to your website, you should be measuring the growth rate of your subscriber list. If your goal is lead generation, you should be tracking the number of leads generated over time. If you want to convert more leads into customers, you need to monitor changes in your conversion rate.
Metrics Every Email Marketer Should Be Tracking
While some metrics are goal-specific, others are important to track in every campaign, including the following 4:
1. Click through Rate (CTR)
This is the percentage of your recipients who clicked on one or more links in your email. To calculate CTR, divide the number of clicks by the number of delivered emails—for example, if you delivered 5,000 emails and 250 recipients clicked on a link, your click through rate would be 250/5,000, or 5%.
Many email marketers obsess over their open rate, but this can be a misleading metric. A well-written subject line can boost open rates, but that doesn’t really help your business if recipients simply read your email without doing what it is you want them to do, like click through to a landing page on your website, watch a product video or download an eBook. Your click through rate is an important benchmark index because, unlike your open rate, it tells you how engaging your content is, and how many email recipients want to learn more about your products and services based on the quality of that content.
2. Conversion Rate
The conversion rate of your email campaign goes a step further, telling you how many recipients both clicked on an email link and completed a desired action, such as buying a product or completing a lead generation form. To calculate conversion rate, divide the number of recipients who completed the desired action by the number of delivered emails (if you delivered 5,000 emails and 100 recipients completed your desired action, your conversion rate would be 100/5,000, or 2%).
Conversion rate is among the most important metrics you can track because it’s directly related to the goal of your campaign. If, for example, you want email recipients to view a product video (as a precursor to purchasing that product), you need to know how effectively your email content and call-to-action are persuading recipients to watch that video.
3. Bounce Rate
This is the percentage of emails which weren’t successfully delivered to your recipients’ inboxes, calculated as the number of undelivered emails divided by the number of emails sent. You should be tracking both “soft” and “hard” bounces. Soft bounces are emails that can’t be delivered because a recipient’s inbox is full, or a result of some other temporary problem with a valid email address. Hard bounces are emails that aren’t delivered because the recipient’s email address doesn’t exist or has been closed.
An email recipient’s server will often hold soft bounces until the temporary problem is fixed. Hard bounces, on the other hand, signal a more serious issue. You should delete these email addresses immediately: internet service providers use your hard bounce rate to assess your reputation, and potentially to identify you as a spammer.
4. Return on Investment (ROI)
This one is self-evident: it represents how much revenue your campaign generates as a function of how much you spent. For example, if your total email marketing campaign costs are $100 and your campaign generates $2,000 in additional sales, you made $1,900, and your ROI is 1,900% (1,900/100).
In calculating ROI, it’s important to include every cost related to your email marketing campaign, such as how much you paid to an email service provider for the duration of your campaign, and how much you paid employees for their work. You also need to ensure that every sale you include is a direct result of your email campaign.
Tracking these are other metrics will let you know how much progress you’re making towards the goals of your email marketing campaigns, and where you need to make improvements to hasten that progress. Equally important, the emails you send are one component of the relationship you’re building with customers and prospective customers, a relationship based on the experience they have with your business at every touch point.