There are plenty of theories about how to improve email marketing.
A well-optimized email structure, a strong strategy, and a large database can all contribute to success. But those efforts mean little if you cannot see their results.
Whatever your objective, the next step is to choose the metrics that will show whether you are making progress toward it.
Before preparing your next email, pause and ask: "What is the purpose of my email marketing?" or "What does the company expect from these emails?"
Which Email Metrics Should I Track?
Your email marketing goals may differ from those of another company, and they may change over time within your own business. Before you start or continue sending and measuring emails, define exactly what you want them to achieve.
Do you want to grow your database, find more leads, or convert leads into active customers?
One point is worth remembering before we examine the metrics: results vary by industry, so take that variation into account when setting percentage targets.
Click Rate
What it is: Percentage of email recipients who clicked one or more links in a given email.
How to Calculate: (Total clicks OR unique clicks ÷ Number of emails delivered) * 100
Example: 500 total clicks ÷ 10,000 delivered emails * 100 = 5% click rate
Click rate is one of the most commonly used email marketing metrics. It is also often used to evaluate A/B tests, since these tests frequently explore ways to earn more clicks from an email.
Click rate matters because it gives you a direct indication of how many people in your database are interested in your company and engaging with your content.
Conversion Rate
What it is: The percentage of email recipients who clicked a link in an email and completed a targeted action, such as filling out a lead generation form or purchasing a product.
How to Calculate: (Number of people who completed the requested action ÷ Total number of emails delivered) * 100
Example: 400 people completing the requested action ÷ total email delivered 10,000 * 100 = 4% conversion rate
Once someone clicks the email, the usual goal is for them to complete the intended action. If you send an email promoting an e-book download, for example, anyone who downloads the e-book counts as a conversion, while someone who only opens the email does not.
To measure conversion rate, integrate your email automation system with your website. You can do this by creating unique URLs for email links, although some systems generate them automatically.
Bounce Rate
What it is: It is the percentage of the total sent e-mails not being delivered to your target data.
How to Calculate: (Total number of bounced emails ÷ Total emails sent) * 100
Example: 75 bounced emails ÷ 10,000 total emails sent * 100 = 0.75% bounce rate
There are two types of bounces to monitor: Hard Bounce and Soft Bounce.
What are Hard Bounce and Soft Bounce?
A Soft Bounce is a temporary delivery failure involving a valid email address. It may occur because of a full inbox or a problem with the recipient's server. The server may hold the email and deliver it after the problem is resolved, or you can try sending the message again.
A Hard Bounce occurs when an email cannot be delivered to an invalid, closed, or nonexistent address. These emails will not be delivered successfully. Because Internet Service Providers use bounce rates when assessing your company's reputation, regularly remove addresses classified as Hard Bounce from your list.
Return on Investment (ROI)
What it is: The total return on investment of your email campaigns. In other words, it is total revenue divided by total expenditure.
How to Calculate: [Revenue from additional sales - investment invested in the campaign) ÷ investment in the campaign] * 100
Example: ($1,000 additional sales - $100 invested in campaign / $100 invested in campaign) * 100 = 900% ROI for campaign
This is the most basic formula for calculating ROI, though a different formula may suit your type of business better.
Open Rate
What it is: It is the percentage of the e-goods you have sent that are opened by the buyers.
Email marketing teams often optimize their content for higher open rates. Although that approach can help, optimizing click-through rates may be more useful when your objective is return.
Open rate can still be useful as a comparative metric in A/B testing. For example, comparing open rates for the same mailing list across different days or times of the week may reveal a useful pattern.
Unsubscribe Rate
What it is: The percentage of e-mail recipients that leave your send list after the e-mail you sent is opened.
There are different views on what unsubscribe rate tells you. One is that it does not provide a reliable picture of your email list's health. Many subscribers who are tired of a company's emails do not complete the unsubscribe process. Instead, they simply stop opening, reading, and clicking. Another view is that reviewing your unsubscribe rate each month can help you calculate your list growth rate.
Note
Choose your metrics carefully and make sure they let you measure email performance, list efficiency, and progress toward your goals. If you can assess each of these areas, you have a solid basis for improving your email marketing.
