Written by Gavin Hewitson, founder of the email marketing agency in-box.co.nz.
The world of digital marketing moves fast. Meta ads, pinterest ads, influencer marketing, it changes day to day. But over the years, email marketing has largely remained the same. The tactics have evolved as have the platforms that allow you to send emails, but the true essence of email marketing has largely remained the same. A strong campaign strategy along with some solid automations still form the backbone of many ecommerce store’s strategies, and for many, this is a perfectly good starting point.
In this article, I am not going to be critiquing any strategies but instead highlighting the most important metrics you should be focusing on, when implementing a strategy of your choice. So let’s get into it.
9 Essential Metrics To Monitor
This metric is probably the most talked about metric when it comes to email marketing, but not necessarily the most important. This metric measures the percentage of recipients who opened your email. It indicates how engaging and relevant your subject lines are and your overall sender reputation. Now an important caveat to this number is the fact that for people reading your emails from Google and Apple devices, those emails will automatically be marked as read, regardless of whether or not someone opened the email. This can skew your reporting a bit so just keep that in mind.
Click-Through Rate (CTR
CTR measures the percentage of recipients who clicked on one or more links within your email. It reflects the effectiveness of your email content and call-to-action. The fluctuations can indicate good copy, email designs and offers or of course the lack thereof.
A high CTR indicates engaging and relevant content that resonates with your audience, while a lower CTR suggests areas for improvement such as the need to optimise for dark mode. Armed with this data, you can fine-tune your email campaigns, experiment with different CTAs, optimise content, and tailor messages to suit your audience's preferences. Of course, some emails may not be designed to garner clicks and instead, simply designed to inform. Make sure you factor this in when measuring your effectiveness.
The conversion rate tracks the percentage of email recipients who completed the desired action, such as making a purchase or signing up for a webinar, after clicking on a link in your email. This is more of an indication of your store or websites effectiveness rather than the email itself, however it is nonetheless important.
Bounces occur when your email is undeliverable due to invalid or inactive email addresses. Monitoring bounce rate helps maintain a clean and updated email list. I am going to spend a bit of time on this point, as I know a lot of email marketers tend to overlook it, but here are some ways that high bounce rates can affect your email marketing.
Reputation and Deliverability: ISPs (Internet Service Providers) monitor bounce rates to assess the sender's reputation. A high bounce rate can signal poor list hygiene and may lead to your emails being marked as spam or sent to the recipients' junk folders, reducing your deliverability.
Wasted Resources: Sending emails to invalid or non-existent addresses wastes valuable resources, including time, effort, and server capacity, without reaching your intended audience.
Data Accuracy: A high bounce rate can skew your email performance metrics, making it challenging to gauge the true effectiveness of your campaigns.
Impact on Engagement: When your emails don't reach the right audience, it hinders your chances of engaging potential customers and building meaningful relationships with them.
To mitigate the negative effects of bounce rates, you need to maintain an updated email list. Regularly remove invalid and inactive addresses, and consider using double opt-in processes to ensure the accuracy of subscriber data. Additionally, choose a reputable email service provider that actively monitors and manages bounce rates to help preserve your sender reputation and improve email deliverability. I always recommend klaviyo.com.
This metric shows the percentage of subscribers who opt-out or unsubscribe from your email list. Keeping an eye on this rate can help you understand if your content is meeting subscribers' expectations. High unsubscribe rates can mean a few things such as bad copy, poor branding or just a tired audience.
List Growth Rate
The list growth rate calculates the rate at which your email subscriber list is growing. It helps you assess the success of your lead generation efforts. Now if you are just starting out as a business, odds are your lead generation efforts comprise largely of either organic traffic or paid product ads. This means that the list growth rate will largely depend on the conversion rate of your sign up forms. Personally, I like to look at the conversion of the sign up as it tends to give a better indication of their effectiveness.
Conversion by Device
Analysing which devices (desktop, mobile, tablet) drive the most conversions can help you optimize your email design and content for better performance. I only recommend paying attention to these numbers if you have someone managing your email marketing full time. The reason being, to begin optimising for device type, you need to be willing to dedicate a lot of time towards creating different campaign types and segments based on how people engage with your content. It is worthwhile, but only when you are operating at a much larger scale with an audience of over 50,000
Revenue Per Recipient
This one is pretty self explanatory by probably one of the most important metrics to measure. The metric highlights the average revenue generated per email subscriber, giving you a clear picture of the total value of each subscriber. This number is calculated by total revenue divided by total active subscribers. Real simple, so simple in fact that platforms like Klaviyo will do it for you.
What you can do with this number is predict how much revenue you can make when you get new subscriber and from there you use this number to gauge how much money you should allocate to ads to grow the size of your database. If for example, for every subscriber you get, you make $10.00 and your profit margins are 20%, you know that at anything up to $2 when it comes to cost per lead to get someone into your list, you are making profit.
Those are the top 9 metrics that you want to pay attention to when it comes to email marketing. Now, that is by no means the be all and end all, and honestly as your business grows, there will be new metrics that you want to pay attention to. But if you are just starting out, those numbers are a great starting point.