Email marketing is a cost-effective, low-tech option for communicating with current and potential clients.
However, to be successful, email marketers need to track certain metrics to know if their email marketing campaigns are successful or not. Gone are the days where one would send an email and expect the see opens, clicks and people flying over to a website to buy a product or service. This means that tracking the most important information is crucial to a successful email marketing campaign.
In this post, we'll look at what these (KPIs) might be and how they can help you optimize your campaign so that it meets your business objectives.
Keep reading to learn more.
What KPIs For Email Marketing Means
KPI stands for Key Performance Indicator. It is a quantifiable measurement of performance that can help you measure the success of your campaign.
Each industry will have different KPIs that are important, but it's good to be aware of what these usually are so that you can base your campaigns around them.
Image Credit: http://exponea.com
Let's now combine this KPI knowledge with email marketing. The main purpose of email marketing is to get a higher number of clicks and conversions.
For each click-through or conversion that your campaign generates you'll want to know the source (e.g., what promotion or campaign drove the traffic) and then measure whether it reached its intended target (e.g., emails were opened, links were clicked).
These are core metrics for tracking campaign performance, but there are several KPIs that you should also monitor to understand how your campaigns are performing against your business objectives.
Top 10 Email Marketing KPIs
Open rate
The percentage of recipients who open an email after receiving it. This KPI is crucial because it allows you to measure which emails get opened and helps inform future campaign decisions.
A great open rate will depend on your industry, but a good benchmark for B2C companies is around 20% and a good benchmark for B2B companies is around 10%.
Click-Through Rate (CTR)
The percentage of emails that have been opened is divided by the total number of emails sent. This KPI will help you understand which links are being clicked on the most.
Like open rates, CTRs vary from industry to industry, but as a general rule aims for 5-10% CTR from a campaign perspective and 15-25% CTR from an individual email perspective.
Conversion Rate
The percentage of desired actions taken after viewing an email. Many actions can be considered conversions, including clicking through to a website, signing up to receive future emails, downloading an eBook or whitepaper, sharing content on social media, etc. A great CTA (call to action) also affects this metric.
Image Credit: http://instapage.com
Depending on your business the type of conversions will vary. However, you should always be tracking how many people are taking action after receiving an email. You may then use this information to improve future campaigns by increasing click-throughs or promoting other offers that drive more conversions.
Cost Per Conversion
The average cost of getting someone to take the desired action after viewing one email. This KPI gives you insight into what your campaign is costing and whether it's worth running in the long term. Alternatively, you may decide to scale it up or down depending on the cost.
ROI - Return On Investment
This KPI tells you whether a campaign is working by measuring how many conversions are taking place relative to the amount of money you're spending.
It will help give insight into which campaigns are more successful than others and whether it's better to invest more in some channels over others based on performance. Tracking ROI can also help inform your overall marketing strategy so that you allocate your resources accordingly, ensuring that your email marketing efforts are yielding the best possible return.
Cost Per Click (CPC)
The average cost of a click from an email. This KPI helps you understand how much it costs to get people to click on a link after opening an email and can help guide future decisions about which links, call to actions and even campaigns should be prioritized based on their CPC.
Image Credit: http://theonlineadvertisingguide.com
Unsubscribe Rate
The number of unsubscribed email addresses divided by the total number of emails sent. This KPI gives insight into how many people don't want to be emailed anymore and whether a segment is too broad or a marketing message isn't clear enough.
Repeat Opens
Also known as "recall" this measures the percentage of recipients who opened an email on two separate days within a campaign. Repeated opens are a good indicator of whether the content in your emails resonates with an audience and shows that it's worth spending more time creating better email materials. You can also consider the unique open rate of your emails as a KPI to track.
Number Of Forwards
The number of people who have chosen to forward an email containing your message into their network. Like unsubscribers, you treat this KPI as a feedback mechanism that tells you whether there is something about your marketing messages that isn’t clear enough or doesn’t resonate with customers (or vice versa).
Open Rate (Overall)
The percentage of email clients who opened at least one email from within a campaign. This is another crucial metric because it indicates how well-received a campaign was.
Image Credit: http://mailbakery.com
However, if this metric isn't high enough, it may mean that there is a need for improvement in your email marketing strategy.
How To Measure Your Email KPIs
While it is important to be able to calculate these email marketing metrics to measure performance, it is just as crucial that you are looking at the right statistics. Not all key performance indicators are created equal and their interpretation can sometimes lead to very different conclusions.
For example, the open rate by itself isn't all that useful if your email list is constantly growing.
If each of your mails has a 50% email open rate when sent out to 5,000 people, but after six months those numbers have significantly changed (5,000 -> 15,000) then it's much more difficult to draw meaningful conclusions about email campaigns success/failure because you're comparing apples and oranges.
Image Credit: http://blog.mailup.com
A better approach would be to look at your lists based on how long they've been subscribed to your list and to measure open rates as a percentage of those lists. By doing this you'll be able to more accurately compare performance from month to month, which is closer to a "like for like" analysis.
The key with any campaign is that it should start with a hypothesis or a question that needs answering. The best way to come up with good KPI email metrics is to try different things, experiment, and constantly improve based on what works.
That may mean going back through previous campaigns and checking if there were any KPIs that could have predicted positive or negative performance before the campaign went live. Like this, you can focus future efforts on improving those areas rather than wondering why something didn't work out as expected.
Why It Is Important To Track These Email Metrics
When you look at how much time it takes to put together a series of marketing emails, sending out something that doesn't resonate with your audience may seem like a wasted effort.
However, by monitoring KPIs and using the feedback they provide as a learning experience for future campaigns, you'll be able to see which campaigns are effective and which ones aren't worth pursuing in the future.
Moreover, it's important to be able to separate actual performance from outside factors such as changes in list size, so monitoring and normalizing KPIs over time is crucial.
Without the relevant metrics, you won't understand whether new campaigns are underperforming or overperforming, or if a change of strategy is required moving forward. Only with good insight into what has happened before can you determine the future direction and focus on those efforts.
For example, if your open rates (individual and overall) have been consistently low, it may be due to a recent change in list size rather than because of the quality of your mails themselves.
The Importance Of Segmentation In An Email Marketing Campaign
Email marketing provides a great opportunity to do market research and segment your audience in the best way possible.
From splitting out lists for different products or services you offer to putting together small groups of people that have shown an interest in certain topics, your business email server offers the ability to target specific individuals is one of the things that makes email such a powerful marketing tool.
Image Credit: http://searchcustomerexperience.techtarget.com
This means that it's important to use such segments when sending out newsletters; data from previous campaigns will allow you to see which groups met/exceeded expectations and which ones did not.
Then, rather than continuing with broad-brush strokes and sending all your emails to every single member of your list (and thereby wasting time and money on those users who will never interact with your emails), you can focus future efforts by developing more targeted email activities that should lead to improved results.
For example, let's say that one of your previous newsletters had a 10% open rate and was sent out to 100,000 people. Now imagine you've split up your list into two categories: those who clicked a link in your email and those who didn’t.
By sending out a follow-up mail specifically designed to increase engagement from those in the second group (e.g., ask them to unsubscribe if they no longer wish to receive mails) you'll see an increased overall open rate as well as more targeted activity for specific groups within your user base.
That's a solid, segmented approach that won't just improve your ROI but also help you to better understand the sectors of your audience who are interacting with your campaigns.
How To Get Started With Tracking KPIs
When you're first starting, it's a good idea to define your KPIs. Setting up these KPIs as part of a comprehensive tracking plan will allow you to monitor the overall health of your email marketing efforts and see where there might be room for improvement going forward.
For example, if your open rates are low then perhaps your subject lines need work. Maybe there is something about your content that turns readers off. There may also be an issue with geographic segmentation so people in different parts of the world are seeing different content.
Once you know your KPIs, it's also important to set goals for growth and improvement. For instance, if your open rates have been low for some time then by setting a goal such as 30%+ opens within three months, you're able to bridge that gap more effectively via specific plans on how to reach this objective without going over budget.
Tying in with that is a regular review process that will allow you to see your progress and adjust accordingly when necessary. It might sound obvious but the key is not just about checking on these metrics from time to time. Rather, it is to ensure they are part of an ongoing process where changes can be made along the way depending on results.
Email Marketing KPIs - FAQ
What Is KPI In Email Marketing?
This is probably the first question that comes to mind when someone asks you about measuring your email marketing performance. "KPI" stands for Key Performance Indicator - which is, in simple words, metrics that can be used to determine how effective your email marketing campaign has been.
The reason you'd want to measure campaign effectiveness would be because of two factors:
Making use of some of the best KPI software dashboards is a great way to ensure that all the relevant metrics are being tracked.
What Are Some Common KPIs For An Email Marketing Campaign?
Several metrics could be used when trying to measure the effectiveness of an email marketing campaign; however, there are three major categories which these metrics fall into:
There are other metrics, but these are the most common ones.
How Do You Measure The Success Of Email Marketing?
The most important part of measuring email marketing success is to establish specific goals that are tied to your business objectives.
If you are not certain which KPIs you should be measuring, it's best if you start with the ones that show conversions. Conversion rates and revenue per email sent will tell you how many recipients opened an email message and took the desired action (e.g making a purchase), but they won't reveal anything about the impact of your campaign on sales.
For this reason, it might be helpful to use specific email marketing metrics like conversion rate or revenue per email sent in combination with other KPI values such as average order value or an average number of items purchased per order made by email recipients.
At the end, it all depends on your goals, current situation and what impact the email marketing campaign has had so far.
Keep in mind that email deliverability affects all your metrics so it's important to keep that in mind when considering email frequency and email performance.
How Do You Know If Your Email Marketing Is Successful?
The size of your subscriber list isn't the only factor that's going to determine how many conversions you will get from sending emails, there are also quite a few other factors involved such as:
Subject Line
This is sometimes thought of as one of the most important elements in any type of advertising message. It can be so influential that good or bad performance on this part alone might sway the overall success rate of your entire email marketing campaign.
To ensure that you have crafted a perfect subject line that will make recipients want to open and read your message, study your audience and try to anticipate questions they might have regarding your subject. These are ideal to be tested as subject lines for your emails. You can also test different types of content to see which subject gets the best response (i.e. open rate) from recipients.
Message Value
This is a very important part of any email marketing campaign, as it's what will make your audience want to buy from you now or at some point in the future.
To come up with valuable content that has a high chance of being opened and acted upon by recipients, try to give them the information they might not be able to find anywhere else on the web. The more exclusive and useful your message is, the better chance you have for achieving success with your email marketing efforts.
Personalization
This tactic increases trust levels among prospects and customers by demonstrating that real people are behind your messages, and it does so by inserting certain elements (e.g recipient's first name) into the message. This makes it seem like it was written especially for them.
Email Design
This is another very important element of email marketing since how your message looks will be an influencing factor on whether or not recipients decide to click on specific links you might have included, and whether they take desired actions based on what you are offering them.
Make sure that your messages' design is sharp, attractive, and easy to read to increase chances for success.
Frequency Of Emails Sent
Too many messages can annoy recipients and turn them off while sending too few could cause you to lose their attention eventually resulting in lost sales opportunities.
For this reason, it's always a good idea to test different frequencies of messages sent by your email marketing campaign and use the data obtained from this activity to determine the optimal number of emails per day, week or month that needs to be sent.
Conclusion
In conclusion, it's important to realize that even though your email marketing campaign is designed to help you increase conversions, this activity also has the potential of negatively impacting your web metrics if you fail to understand how it works and what indicators are used to measure its success or failure.
By understanding how these email marketing analytics work, however, you'll be able to use them in ways that make sense for your business situation and avoid wasting time with ones that don't offer any benefits at all.
Finally, consider that none of the above matters if you do not have leads to send emails to. This means that learning how to create an irresistible lead magnet is key to getting the process rolling.
Last Updated on August 15, 2023 by Hanson Cheng