The essential guide to email marketing metrics in 2020 Email marketing is probably the most effective channel in terms of ROI. With a 35:1 return on investment, who could argue? But guess what? If done better, the ROI could be even higher. However, to do better, you need to understand what needs to be optimised. To do this you need to drive insight from a huge array of data points. The challenge for time-poor email marketers, is that we are often stuck in a rut of metric paralysis: opens, clicks, unsubscribes, and so on because we just don’t have the time or even the internal skill set to think beyond these basic metrics. This guide helps you to identify the other key email marketing KPIs every email marketer should be analysing to become the best. Imagine a world where your ROI is even bigger. Realising the true potential of email marketing is crucial to your success, the starting point is hidden in your data. Email marketing metrics to measure The following list of email marketing metrics are the key things you need to measure in order to boost your ROI. Before going forward, make sure to see what email marketing software solutions are available to help boost your overall ROI as you keep track of the steps in this list. 1. Email list growth rate Without healthy, growing email lists, the benefits you reap today may not be sustainable, which is why keeping a focus on your list growth is essential. To calculate the rate at which your list is growing: (Number of new sign-ups – unsubscribes) divided by the total number on your list x 100. 2. Unique open and click rates Many people open or click your email several times, meaning the total rates will give you an unrealistic view on how relevant your email is. Which is why the unique rates on these numbers are more relevant to understanding how many people opened or clicked on your emails. The unique open/click rate shows the number of subscribers that have opened or clicked your email. The unique open/click rate is the deduced number of people who have opened/clicked your email. This number is then usually shown as a percentage of the total number of people you have sent your email to. Tip: A great subject line will help improve open rates. Find out how you can improve your email subject lines. 3. Click-through rate Understanding the click-through rate (CTR), sometimes referred to as click-to-open-rate in email marketing, will help you identify the relevance of the email content to the people who have opened your email. This also helps you identify whether the creative needs optimising. A decreasing click-to-open rate may mean that your content and email design needs work. Example: You sent 970 total emails and 140 subscribers opened them. 140/970 = .14433 multiply by 100 and you get a 14.4% email click-through rate. How to improve your click-through rate There are a few key strategies you can employ to maximise click-through rate. To drive higher engagement in your emails and incentivise more clicks, try to keep the following tips in mind: Keep emails concise Avoid being long-winded or over complicating your writing in your emails. If you’re looking to gain as many clicks as possible, keep the focus of your emails on what is essential and the links that you want your readers to click. Over-saturation can distract your readers and take their focus away from your end goal. Be upfront with your goal Make sure that the action or click that you want your readers to make is clear to them. In order to get what you want out of your emails, you cannot rely on your readers to read between any lines or make assumptions as to what you want from them. Clearly outline the benefits that clicking on your links will provide and how important they are for both you and your readers. Include the same link multiple times Referencing the same link at multiple points in your email increases the chances that your readers who did not click on it at first can reconsider its appeal. This can be done by linking to your landing page at first in your email and then including a call-to-action button linking to the same page, or just referencing the page again in your email by emphasizing the value it could bring your reader. Focus on your call-to-action A strong call-to-action button that attracts the attention of your readers is key to a high click-through rate. The call-to-action is the crucial element of your email where you can convert readers into customers. Making it impossible to miss, or better yet, click on, via appealing language and an exciting design can only help your click-through rate. 4. Unsubscribe rate As mentioned earlier, list growth is essential. Many unengaged subscribers will fail to respond to your emails, others that don’t want to hear from you will hit the unsubscribe button. By measuring the unsubscribe rate, you will understand whether your emails are delivering the expectations to your audience. To calculate the unsubscribe rate: (Total number of unsubscribes divided by total number of emails sent) x 100 5. List churn The unsubscribe rate will give you churn on a campaign by campaign basis, however understanding your list churn over time will give you a better indication of whether your email strategy needs some work. To calculate list churn rate in the last 12 months: (Total number of email unsubscribes in 12 months divide by total number of subscribers) x 100 6. Open reach An open rate tells you how many opens you are getting on a campaign basis. But what you really want to know is how much of your database is engaged. Is it the same 20% that open on a regular basis or maybe there are different people opening across different campaigns. A reach allows you to understand how many people are you engaging over a period of time. To calculate your open reach: (Total number of unique subscribers that have opened over a period of time divided by total number of subscribers) x100 7. Heat map tracking Do you wonder which links in your emails are most popular? Do emails with lots of links work? Does the audience just click on the top links? Are your calls to action performing as well as they could? Understanding the answers to these will allow you to identify where you can optimise and test. Most email platforms will give you this report out of the box. If not then you will need to look at the number of clicks per link and overlay this onto your creative. 8. Delivered rate Email deliverability success is one of the most crucial aspects of your email strategy. If your emails are not being delivered all the rest of your hard work on content, creative etc will have gone to waste. This will be a metric from your email marketing platform. It will tell you the number of emails actually delivered vs. the number sent. 9. Hard bounce rate Your hard bounce rate is indicative of a healthy list. The higher the bounce rate, the more the ISP will identify you as a poor sender, resulting in more of your emails hitting the junk folder. This is also a metric given by your email marketing platform. It will tell you how many emails were bad or invalid. 10. Inbox placement rate Understanding your inbox placement rate will help you identify whether you are getting the optimum results from your email campaigns. There are many factors that impact your inbox placement, and analysing this number first will help you identify whether you have a deeper problem. Not all email marketing platforms will tell you your inbox placement. However, if your emails are not performing well, or there is a need to deliver more value from your campaigns, it’s important to find a way of calculating this. 11. Complaint rate This is the number of people that have hit the SPAM button or junked your email. Even a tiny number of recipients doing this can have an impact on your sender reputation. This is the number of people that have complained vs. the number of emails delivered. 12. Landing page bounce rate Post-click metric tracking is essential to measuring the true success of your campaign. To be honest, your boss will rarely care about the open rate or click rate – it is what they do after they click. The bounce rate shows you the percentage of people who leave your site after visiting only one page. If the bounce rate is high, then you know your audience are not interested in taking action. Most ESPs won’t give you landing page metrics, so a good place to start is GA. Setting up landing page tracking in GA is simple, once signed in you will need to find your tracking ID and insert these into your landing page. Once complete the landing page reporting within GA will enable you to monitor a whole range of metrics. 13. Conversion rate Email is highly responsive. However, few marketers show these metrics in their reporting dashboards. High clicks, low conversions – you have a potential issue with your landing page. Low clicks, high conversion rate – you may have a potential issue with your data, your message, your offer and so on! To calculate your email conversion rate, divide the number of subscribers that completed the email’s desired action by the number of successful email deliveries, and then multiply that quotient by 100 to find your conversion rate. Example: You sent 970 total emails and 250 subscribers completed the desired action. 250/970 = .25773 multiply by 100 and you get a 25.8% email conversion rate. How to improve your conversion rate If your email conversion rate is falling short of its desired performance, you may need to make some adjustments. Here are a few ways to improve your email conversion rate. Be upfront with the value To keep your reader interested in your brand and convert them to your end goal, you’ll need to hold their attention and communicate the value of your email. An attention-catching subject line can help win a click from your subscribers over other emails in their inbox. Segment your list Grouping recipients by demographics such as location, purchase history, or browsing activity can make your emails more effective and appealing to your readers. By tailoring your emails to specific readers, you can increase the relevance of your brand and offers to your readers, and in term boost both your newsletter’s open and conversion rates. Ensure a responsive design More than half of all emails are opened on a mobile device, and you’ll want to make sure that the way you design your emails is easy to read and warrants a click from your subscribers, be it via computer, tablet, or phone. To optimise your emails for mobile readers, try using a single column layout, keeping your writing concise, using larger fonts to improve readability, and creating CTA buttons that can fit in and appear perfectly across multiple types of inboxes. 14. Average Order Value (AOV) Keeping track of average order value helps your e-commerce business in a number of ways, including understanding your customers’ spending habits, informing your pricing strategy, and measuring the success of your marketing efforts. To use AOV to measure marketing success, take a benchmark and see how this figure improves as a result of your efforts. It may cost you money to earn new customers but increasing average order value is normally inexpensive. It can often be achieved by tweaking tactics and won’t require a whole new campaign. What’s more, increasing average order value directly impacts your bottom line. Average order value is an important e-commerce metric. It refers to the average amount that is spent in each transaction on your e-commerce website. To work out your average order value, simply divide your revenue by the number of orders you’ve received. For example: If your site made £70,000 last month from 1400 orders, your average order value would be £70,000/1400 = £50. 15. Return on Investment (ROI) Email marketing produces some of the highest ROI. It has a low cost to market and is easy to set up. Measuring the ROI allows you to prove the value of your email activity, whether the amount you spend on technology and time returns on this investment. It is one of the most important metrics board level to deliver a business case on further investment. If you are looking to show ROI as a percentage: Total revenue – Total investment cost (Technology & Time spent) / by total investment cost x 100. 16. Customer Lifetime Value (CLV) The old adage that it costs less to retain and grow a current customer than it does to acquire new rings true still today. In fact, it costs over five times more to acquire a new customer. The CLV gives you the why behind so many engagement initiatives. Engage and grow you will soon find your profit margins grow! Once you have understood your CLV, an objective would be to improve this year over year. There are several ways to calculate your customer lifetime value, and this can often become really complex. Testing and understanding methodologies allows you to land on one that works for your business. Speak to your ESP about how they can help you discover the best way to get to this metric. 17. RFM value Recency, Frequency, and Monetary (or RFM) value allows you to understand your most valuable customers. This then gives you the insight to go and find more of them! It also allows you to identify those that are lapsing. Defining these segments is crucial to your business success. The nudge effect Many a marketing professional will talk about the nudge effect of email marketing; however, how do you prove this to your business? Are your “unengaged” subscribers really unengaged? Should you remove them from your database? Measuring your other marketing channels post-campaign will allow you to understand the correlations. A direct response channel email is almost an enemy to itself; if you can’t measure it, then did it not happen? If you applied this thinking, then you certainly wouldn’t spend on out of home, advertising, and so on. Email marketing, as with any other channel, delivers much more than just the sale. It allows you to deliver on your brand story, keep customers engaged, and nudge recipients to take the next best action.