Email Marketing KPIs: What to Track?
|Why Does Your Business Need Email Marketing?|
|Most Important Metrics to Track|
|Why is email marketing important?|
|What is a hard bounce in email marketing?|
|What is a good open rate for email marketing?|
In its simplest form, email marketing is using email to advertise your business. It is used to harness relationships with potential clients, give them information and updates about your brand, offer promotions to inspire customer loyalty, and many more. Just like marketing through snail mail, email marketing is a direct type of marketing. However, email marketing is more efficient and cost-effective since it is digital.
Most business owners believe that email marketing is outdated, but that is the exact opposite. Email marketing has been in existence since the inception of the Internet. Over the years, it has gone through a series of evolution but has retained its high level of efficacy as a marketing tool. The truth is, email marketing is presently more important than it used to be. This is the reason why 85% of retailers in the United States consider as one of the most efficient customer acquisition tools.
Whether you are using email marketing to persuade leads or promote a new product, it is important to track its performance. But you need to know why you measure before you venture into tracking. After that, you can learn the next steps involved in tracking your marketing campaign effectively. This is where the email marketing KPIs come in; they are useful tools for optimizing your campaigns.
Why Does Your Business Need Email Marketing?
Statistics indicate that 94% of Internet users have access to email. So, using email as a marketing channel allows you to widen your reach to a significant number of users, including those that may not be on social media. Also, another survey discovered that 75% of adult Internet users indicate that email marketing is their favorite marketing method. If you have not started exploring this option, then you should put that into consideration if you want to reach a wider audience and bolster your brand's relationship with existing clients.
Another benefit enjoyed by using this tool is that it makes the tracking of ROI hassle-free. You can track everything with the use of email marketing software. With this, you can find out who is opening and reading your mails, who is visiting your website through your emails, etc.
Furthermore, you gain a higher ROI because it attracts no cost to get emails to the right audience; this is different from other forms of marketing. The emails are already channeled towards the right consumers because they are only being sent to individuals who have permitted you by giving you their email address. This qualifies email marketing as one of the most affordable marketing methods.
One more known fact is that 66% of all mails in the United States are accessed with mobile devices such as tablets or smartphones. If you are looking for something more affordable that SMS campaign or bulk text messaging, email marketing might be what you are looking for. This marketing tool is almost as similar to SMS marketing, but you can reach smartphone users as well as desktop users. Also, most individuals consider less bothersome to receive emails from companies rather than text messages.
Most Important Metrics to Track
There are tons of reasons why email marketing is an effective marketing tool, and we have mentioned them in the section above. The big question is, how do you measure the efficiency of your marketing campaign? It is an important question to ask; however, it has no single answer. This is because the measure you use to track your email campaigns depends on what it was created for. So, for you to find out its effectiveness, you will have to monitor them closely with metrics or KPIs. Mentioned below are some important email marketing metrics to track
This is the simplest email marketing KPI and is important because it helps you understand how much your subscribers are opening your emails. It simply keeps track of the number of subscribers opening an email you sent. This metric also tells you how catchy your subject line is. Therefore, it should always be under close monitoring to be improved.
For instance, research shows that subject lines with the subscriber's first name attached are 26% more likely to the view. According to a report released by Mailchimp, both small and big businesses have an average open rate of between 15% and 30%; these figures are spread across all industries. Marketing subject lines trend lower, whereas personal interest topics trend higher. Also, daily deals receive the lowest open rate.
How to Calculate Open Rate?
To calculate your open rate, subtract the bounced emails from the sent emails. Then, use that figure obtain to divide the number of unique opens.
Ways to Improve Open Rate
Acquiring a high open-rate involves getting things right from the outset. Certain mistakes could lead to a decline in open rates, so you need to check the following factors in your current campaign:
- Remove hard bounces
- Use focus lists
- Format for mobile users
Click-Through Rate (CTR)
The click-through rate points out the number of people who clicked on a link in your email. Unlike deliverability and open rate, you will need to dig deeper to find out this figure. While running campaigns, you need to know the specific links that interested your subscribers as well as where the links were located. The Click-through rate evaluates the success of an ad in terms of capturing users' attention.
For instance, if you embed the same link in two different words and one outperformed the other, you can use it as a way of optimizing your text call-to-action accordingly. You could compare text links to buttons. Never forget to keep track of what recipients clicked on.
How to Calculate the Click-Through Rate
In calculating this metric, find out the number of times your ad is clicked on and do a division with the total number of impressions. Then, take that figure and multiply it by 100; this gives you the percentage value, which is the click-through rate as well.
Email CTR is typically the total amount of clicks an email generates for its sender. Marketers pair click-through rates with bounce rates, open rates, and other metrics to measure the efficacy of their campaigns.
Email conversions essentially refer to when a recipient takes an action you required of them in the email. For instance, if you wish to have a subscriber sign up on your website, a click-through to the sign-up page is progress. However, when the registration becomes complete, it is a conversion.
What does the email conversion rate mean?
Email conversion rate refers to the percentage of recipients who carry out a goal action. Of course, this depends on the particular conversion goal. In many cases, the conversion goal will lead the subscriber to buy a product.
How to calculate your email conversion rate
To calculate the conversion rate of your campaign, get the number of people who completed the goal action, and divide it by the total number of successful email deliveries. Multiply the figure obtained by 100 to get the percentage value.
Bounce rates calculate the percentage of how frequently your emails are returned to you without delivery. This is because, for some reason, the email cannot get to the intended recipient. In this scenario, it has to be returned to the sender with a bounced status notification.
As it relates to acceptable bounce rates, email marketing KPIs work in a slightly different manner. Unlike open rates, click-through rates, and conversion rates, most marketers avoid a high bounce rate because it is bad for business—the lower the bounce rate, the better.
What's the Difference Between A Hard and Soft Bounce?
Hard bounces refer to permanent delivery failures. This can be caused by an outdated domain, erroneous or invalid address, or an address that is no longer in use. With most mailing providers, if an email experiences a hard bounce, it is suppressed automatically and will not be sent out again.
Soft bounces are temporal delivery failures and could happen due to a variety of reasons. The recipient's server may have some temporary issues, his mailbox may be full, or the email may be too large for the server to handle.
This refers to the number of individuals who demand to be removed as recipients from your mailing list. If you are running a small company, your email unsubscribes rate will be relatively low because you most likely have personal relationships with each recipient. However, the case is different from big companies with large lists. Most times, they don't know the recipients on a personal basis, and this increases the potential unsubscribe rate.
Why Do People Unsubscribe from Emails?
People unsubscribe from mailing lists for various reasons, but most times, it is as a result of issues with the sender.
Uninteresting content, poor formatting, and congested inboxes are also good reasons why people click the "unsubscribe" button.
When next you are working on an email campaign, it is important to analyze the previous unsubscribes to work the problem and help you avoid them in the future. You cannot always avoid this, but you can limit the frequency.
How Can You Avoid Email Unsubscribes?
If you are dishing out valuable content always, there is a high tendency that your recipients will be happy, and the unsubscribe rates will remain low. You should strive to keep your unsubscribe rate at below 2%.
Average Order Value (AOV)
This metric calculates the average cost spent on your site with each order a customer places. It is the average amount spent by clients on each transaction. Average Order Value is measured over a specific time frame and is derived by doing a division between the total revenue and number of orders within that time interval.
How to improve the Average Order Value
In many companies, customer acquisition cost gets the most attention, while customer retention or AOV is mostly ignored. A simple calculation indicates that increasing traffic positively impacts on the total revenue generated by a business. This is why money, time, and resources are invested in ensuring that email and website steal the heart of anyone who views them.
With time, you will notice that order volume on your mails remains constant. Even if existing and new customers order repeatedly, the value still remains the same. This might move you to try and grow your mailing list, but this might require more time and resources. Below are the affordable ways of increasing your AOV:
- Offer free shipping if the goods in the cart exceed a particular threshold
- Upselling and Cross-selling
- Announce a limited time offer
- Create a loyalty program
Customer Lifetime Value (CLV)
Customer Lifetime Value is the amount of money a client is expected to spend with a company for the period of the company's relationship with the individual. It is important to measure, and your manner of approach can define your profitability.
Email marketing lifetime value is similar to the typical customer lifetime value. However, we will measure the lifetime of subscription and its impact within that period instead of assessing the lifetime of the client relationship. Your email marketing lifetime value calculation, combined with the ROI of your email campaigns, will aid you in making better decisions to improve your marketing strategy.
Return on investment (ROI)
ROI measures the profitability and efficiency of an investment. Here, it measures how profitable an email marketing campaign is. No matter the level of innovation that new digital marketing tactics have, email marketing will always be amongst the ideal ways of reaching and engaging with your audience. The power of email marketing is in its ability to offer an attractive return on investment to businesses of all sizes. A study carried out by eMarketer indicates that email marketing has recorded a median ROI of 122%. This is four times greater than any other form of digital marketing.
The ideal way to evaluate this exceedingly high return on investment is to have a look at the real value of email marketing ROI across various sectors of your business. According to statistics, the percentage of online marketers who really understand their email marketing ROI and the various factors that impact on them is less than 30%.
Getting an email marketing tool that satisfies your requirements and needs is not that difficult. Most email marketing services are similar in both features and pricing. They also feature free trials, social media integration, a vast array of email templates, and email scheduling. While making use of email marketing software, you can track your stats and progress, automate your marketing campaigns, send better emails, and create a deeper relationship with your recipients.
However, when it comes to picking an email marketing service, ensure you go for the best. It shouldn't always be about the cheap cost; quality should come in first. We have done a bit of research and found the best two email marketing tools for you to use. Read below:
This tool is a part SMS service, part email marketing, and part email utility service. Its pricing begins at 25$. Sendinblue is considered to be unique because of the digital marketing benefits it delivers. You can try out the free version and see if it fits into your marketing pattern. The free version has a longer duration of use compared to other email marketing tools. Its only competitor in relation to this is Mailchimp. Even the premium version of this tool is not expensive compared to other tools within its class. The 2019 partnership with Vonage has brought some amazing additions to this tool.
Among email marketing tools, Campaign Monitor is one of the most affordable. Its pricing begins at $9 per month, which makes it a decent choice that is instinctive and provides basically all the features you will need from any email marketing tool. It features an efficient email builder and provides a collection of analytics called Campaign Monitor Insights. This provides a rudimentary outlook of your overall email campaign performance.
You get a collective insight across campaigns and brands; this means you can gain access to metrics the pinpoint audience health. They include engagement and subscriber activity.
Now that you have found out the essential email marketing KPIs and metrics endeavor to test them so as to maximize your marketing campaigns. With this, you can set goals such as increasing conversion, reducing the unsubscribe rate as well as reducing the rate of spam complaints.
Should I buy an email list?
It is not advisable to do so because you might purchase one which contains the wrong audience.
What type of content is more efficient?
There is no particular pick for this. The content you choose to create should depend largely on your target audience and the message you are trying to convey. You can use texts, audios, videos, etc.
What is the best time to send emails?
Again, this depends on your audience and their general behavior; you will need to do some research to find out how they behave.
Why is email marketing important?
More Effective Than Social Media
We are not trying to say that social media marketing isn't worth it. Social media platforms are great channels to interact with your audience and bolster personal relationships with them. As a result, it is an important step to take towards achieving your marketing goals. However, when it comes to conversion, email marketing is the best tool to use.
Economical and Cost-Effective
It is user-friendly, inexpensive, and effective. Email marketing allows businessmen to get in touch with a large number of audiences at an affordable rate. If you are a small business owner on a budget, this tool is better than traditional tools like television, radio, or paper mail. A study indicates that 85% of U.S. retailers believe that email marketing is among the most cost-effective marketing tool.
Personal and Customizable
As an email marketer, you can easily segment your audience in various categories and send a well-crafted email to each category. This will help to resonate with your audience and provide them with valuable information. When you make a post on social, you address your readers generally, but email marketing allows you to address people by name as well as split different topics for a particular set of members.
By nature, email is transactional, and this means that it could be used to drive traffic to your site and eventually bring sales. As your business grows, utilizing email marketing will help you see your immediate results. It is not just about sending out newsletters; you can use email automation centered on triggers of your audience. Transactional emails are opened 8-times more and 6-times more revenue than any other form of an email.
You do not guess in email marketing. While making use of email marketing software, you can keep track of opened mail, clicked links, and the number of unsubscribes. This helps you to get a clear picture of your marketing campaign's performance, so you can make changes to improve your effectiveness. Remember your email marketing metrics as they help for easy monitoring.
What is a hard bounce in email marketing?
A hard bounce is a mail that is returned to the sender as a result of a permanent error; this is most often caused by an invalid address. Hard bounces are important metrics in email marketing, and every email marketer works towards reducing it.
A lot of hard bounces can get a domain blacklisted; therefore, it is important to monitor your mailing list regularly, target the right audience, and encourage users to always update their information.
What is a good open rate for email marketing?
According to Mailchimp, most businesses record an average email open rate of between 15% to 30%. Generally, companies see no need to try to increase their open rates beyond the industry average. It may sound like a good idea to do that, but it appears difficult for most companies. Conversely, if a company's open rate is below average, they will want to improve it, and they strive hard to achieve that.