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One of the biggest mistakes we see online businesses make is incorrectly measuring the success of their marketing campaigns. They’ll say things like, “our subscriber list has 100,000 people so we must be doing good” or “our open rates are above average so we’re doing everything right.”
Having a big subscriber list and high open rates can be good, but they certainly shouldn’t act as your north star.
In this article, we’re covering the 12 email marketing KPIs (key performance indicators) that you should be tracking.
First up, is your clickthrough rate. Clickthrough rate (or CTR for short) is the percentage of recipients that click a link in a message. Obviously, a high CTR is good because that means your email encouraged your email recipients to take the desired action.
If your clickthrough rates are low, the first thing you should do is make sure your email templates have clear calls to action (CTAs).
In general, it is usually a good thing to limit your number of CTAs to one or two. Also, one CTA should be “above the fold” so people don’t have to scroll too far.
Once you’ve ensured your templates have solid CTAs, it’s time to A/B test your email content to see what results in the best CTR.
A few things you can test to boost your CTR include:
- CTA color
- CTA text
- CTA placement
- List segmentation
Next up is conversion rate. Conversion rate is the percentage of recipients that click a link in a message and make a purchase.
In order to properly track conversion rate, make sure to integrate your email platform with your ecommerce store and analytics platform. One way to do this is to use unique tracking URLs—for more information check out this post on UTM parameters.
If your conversion rates are low, this is usually a website problem and not an email problem. Make sure you’re sending subscribers to the best possible landing page and that your checkout process is seamless.
Open rate is the percentage of recipients that open a message.
There was a time in email marketing when open rate was the most important KPI—but people have gotten smarter and open rate is no longer the north star it once was.
The first reason that open rate isn’t as important as it once was is that people realized that a good open rate does not mean a good conversion rate or clickthrough rate (which are much better metrics for success).
The second reason that the open rate has fallen out of favor is that it’s getting harder to track. When Apple rolled out IOS 15 last year, open rates were inflated or skewed across the board. Most people saw this change coming, and savvy marketers started to focus more on click-through and conversion rates before the change even took place.
The number one way to increase open rates is to write better subject lines. Also, don’t neglect your preview text.
Total Opens vs Unique Opens
There are two ways to view open rates: total and unique. Total opens are how many times an email is opened. Unique opens are how people opened an email. For example, if one person opens an email five times, that results in five total opens and one unique open.
It is important to pay attention to total and unique opens because you can gain insights into what emails people are very interested in. For instance, if your total open rate is very similar to your unique open rate, your email probably wasn’t very interesting. On the other end of the spectrum, if your total opens outweigh your unique opens by a wide margin, then your email kept bringing people back for more.
Your email bounce rate (not to be confused with a website bounce) is the percentage of emails that could not be delivered. Bounce rate is important to track because if your bounce rate is consistently high, you could hurt your sender’s reputation, which can negatively impact email deliverability.
Bounces are broken down into two types: hard and soft.
Hard bounces are permanent failures, typically the result of bad email address. This can be caused by typos in the recipient’s address, outdated domains, etc.
Soft bounces are temporary failures sometimes caused by full inboxes or other fixable issues.
If your bounce rate is unusually high, you should consider “cleaning” your email lists. Implementing a double opt-in can also help reduce the number of bad email addresses on your lists.
Unsubscribe rate is the percentage of recipients who opt out of future communications after receiving a message.
Unsubscribes are normal and should be expected. But if your unsubscribe rates are regularly high, then your messages are resonating with your audience. If a single campaign has a high unsubscribe rate, that particular message did not sit well with your audience.
Our best advice for reducing unsubscribe rates is to make the best and most valuable email campaigns possible. Once you‘re doing that, segment your audiences and send more targeted messages.
Spam complaints are the number of people who report an email as spam. A high spam complaint rate can create long-term deliverability issues that can take months or even years to correct.
The best way to reduce spam complaints? DON’T SPAM! That means only sending messages to people who have opted-in.
Your email return on investment is the amount of money brought in minus the cost to run the campaign. You can also calculate it as a percentage using this formula:
(revenue from campaign – cost of campaign) ÷ $ cost of campaign * 100
Email ROI usually can’t be measured by a single campaign and is usually looked at from a monthly, quarterly, or annual basis. We believe looking at a monthly basis (or longer) is a better indicator than a per-email basis because not every email is meant to make money.
New Subscribers/List Growth Rate
Your list growth rate is, unsurprisingly, how fast your list is growing. For example, you could average 15 new subscribers a day. This is an important email marketing metric to examine because it can tell you if your lead generation strategy is working.
If you notice a dip in list growth rate and your website traffic remains the same, there is probably a problem with your forms and popups.
Revenue Per Recipient
Revenue per recipient is how much revenue you generated per recipient for a single campaign. For example, if you sent a message to 100 people and generated $100 in revenue, your revenue per recipient would be $1.
Tracking revenue per recipient will inform you on how well campaigns are doing from a bottom-line perspective. You might even be surprised to find that revenue per recipient is higher for non-promotional emails, which we’ve seen many times before.
Revenue Per Subscriber
Revenue per subscriber sounds the same but is actually quite different. Revenue per subscriber is often measured on a monthly basis and is your total revenue for the month divided by your total number of active subscribers.
This is a helpful metric to track because it can indicate how valuable subscribers are. For example, let’s say that your revenue per subscriber is $5 and your marketing costs to acquire a new subscriber is $2. If that’s the case, it would make sense to increase your acquisition spending because you know it will eventually provide a positive ROI.
Customer Lifetime Value
Last, but not least, is customer lifetime value (LTV or CLTV). Customer lifetime value is the total revenue generated by a customer throughout their lifetime. Most businesses look at their average LTV to determine the health of their retention programs, but you can also look at LTV on a per-customer level.
We are big believers in the importance of customer lifetime value. So much so that we have an entire blog post dedicated to the subject: Customer Lifetime Value [What It Is, How to Measure It, and Why It’s Important]
Tips for Analyzing KPIs
Look at long-term and short-term trends. If you only look at the results of your most recent campaigns, you could fail to see the full picture. Looking at long-term trends can provide a better view of how your performance is trending.
Look at each metric by device. If there are large disparities in performance between mobile and desktop, it’s time to do some troubleshooting.
Look at each metric over time. For example, you might find that more people open your emails in the afternoon or that most people don’t convert until a day or two after receiving your email. Information like this can help dictate your sending schedule.
Create tests. Try to adopt the scientific method and apply it to your A/B tests. We feel that too many people create tests just for the heck of it. Instead, you should form a hypothesis and test that hypothesis by changing one thing at a time.