If Socrates were an email marketer, he would have obsessed over email metrics and KPIs.
Why? Because he was the one who said the unexamined life is not worth living. Stretch his original statement a little bit and you could say that the unexamined email campaign is not worth sending.
Email metrics are not merely numbers. They’re philosophy. Which makes you, an email marketer, a philosopher?
Indeed. Think about it, though. The most important step a marketer takes before digging into email metrics is asking herself existential questions about email, such as:
- What is the ultimate purpose of my emails?
- How do I accomplish this purpose?
In other words, you have to define your goals, whether they be lead creation, subscriber engagement, or revenue generation. When, and only when, you have a clear picture of what you’re trying to accomplish, you’ll know which email metrics are most relevant to you and in which direction they should be going.
Now that you understand the philosophy of email KPIs and metrics, let’s talk about the 10 most essential ones for your business to watch closely. We’ve ordered them into four basic components of email campaign development: audience, deliverability, engagement, and conversions.
First, you need to have an audience to send to. Then, you want to make sure your audience receives your mail in their inbox and actually engages with your mail. And finally, you want your customers to complete the ultimate desired action (i.e. conversion), whether that’s ordering a new pair of shoes or reading your newest article.
Email Metrics for Audience
1. List Growth
List growth = (present list size – past list size) / past list size
List growth measures the growth of your list. Lists naturally decay. In fact, on average you’ll lose 25 percent of your subscribers per year. Ensure that the rate you’re losing subscribers does not exceed the rate you’re gaining subscribers.
To do so, add and incentivize subscription opportunities on your website. For instance, add a lightbox that appears when a customer scrolls to close your window along with a reason to subscribe (e.g., “sign up to receive a special offer”). You can also test more creative strategies with quizzes, giveaways, or even referral programs. While you’re growing your list, also be sure to practice list hygiene through removing bad or misspelled email addresses.
Pro Tip On How To Improve: There are many creative ways to sustainably acquire new subscribers. We talk about 8 strategies for e-commerce and retailers here → How To Build Your Email List
2. Unsubscribe Rate
Unsubscribe rate = unsubscribes / emails delivered
Unsubscribe rate demonstrates the number of customers who have hit the “unsubscribe” link on your email.
Unsubscribe rate does not accurately depict subscriber engagement because many uninterested subscribers will simply stop opening and clicking through your emails rather than complete through the process of unsubscribing. However, a spike in unsubscribe rate may indicate you had sent an email some readers especially disliked, so unsubscribe rate can still be a helpful metric to monitor.
Pro Tip On How To Improve: Make sure you’re offering your readers value, not just sending them notes on how cool you think your brand is. Also, establish an effective cadence with which you reach your subscribers. Your subscribers are more likely to hit the unsubscribe button if they’ve forgotten about you because your email seemingly came out of the blue.
Email Metrics for Deliverability
3. Bounce Rate
Bounce rate = (soft + hard bounces) / emails sent
Bounce rate is the percentage of emails that were undeliverable. Hard bounces occur when an email address does not exist, while soft bounces occur when email delivery is temporarily affected (e.g., the recipient’s inbox is full or the recipient’s client server was down).
Soft bounces often indicate that the recipient’s inbox is full. Although soft bounces are not something to worry too much about, generally you’ll want to keep your soft bounce rate under 1 percent. You should practice some list hygiene if your soft bounce rate starts to exceed 2 percent.
A hard bounce indicates that an email address no longer exists. The major ISPs like Gmail, Yahoo, and Hotmail pay close attention to and eventually reduce delivery for senders with hard bounces. Remove email addresses with even one hard bounce.
Pro Tip On How To Improve: While there is not much that can be done to decrease soft bounces, you can reduce hard bounces by removing emails that have resulted in hard bounces. To improve your bounce rate, you’ll have to practice proactive strategies rather than reactive strategies. Review your list regularly for misspelled domains and remove those addresses as well.
4. Complaint Rate
Complaint rate = complaints / emails delivered
Complaint rate shows the proportion of email recipients who reported your email as spam.
A couple ways to minimize complaint rates are using compelling subject lines and not bombarding your audience. A/B test your subject lines and the frequency of email sends to find what works best for your brand.
Another way of cutting back on complaint rate is to place your unsubscribe link in more plain sight. Many users will simply mark a message as spam if the unsub option is hard to find. Moreover, consider using a confirmed opt-in method (i.e., subscription confirmation through email) in place of using pre-checked subscription boxes.
If you notice a spike in complaints, trace it back to a specific email or set of emails. Most recipients report an email for SPAM because it seems irrelevant or untimely, when it may not be. Make sure to clearly communicate why someone is receiving an email and consistently provide reminders for why someone is receiving that email.
Pro Tip On How To Improve: Make sure your email content matches expectations set by your subject line. For example, if you mention a special discount in your subject line, follow through with that promise in your email. Utilize personalization to make emails more compelling and engaging. Consider setting up more behaviorally based triggered emails or automated series of emails instead of scheduled promotional emails.
5. Inbox Placement Test Results
Inbox Placement Tests are used to gain insight into where email are being delivered: inbox vs. spam folder.
Everyone wants to get in the inbox; no one wants to land in spam. Inbox placement tests are used to gain insight into where emails are being delivered: inbox vs. spam folder. Monitoring the results of inbox placement tests will allow you to keep a pulse on where your mail is being delivered once it is accepted by the receiver. As we say, deliverability is not a set it and forget it model.
An inbox placement test utilizes a “seed list.” Seeds are email addresses designed solely for the purpose of monitoring inbox placement. Reporting vendors such as 250ok own and monitor these addresses, but they are not actual human contacts and will not engage with your emails. These email addresses (seeds) are included within a live promotional mailing and will report on where the mail goes once it is received: inbox vs. spam folder. If these addresses (seeds) do not make it to the inbox or spam folder they would be considered missing. Missing seeds are indicative of potential issues, whether they be technical issues or a temporary block on the receivers end.
“Emails sent” can be an elusive figure because it includes not only emails that went to the inbox but also those that were sent to the spam folder or blocked altogether. Hence, inbox placement tests allow you to distinguish between emails sent and the number of messages that were delivered as intended, to the inbox.
Pro Tip On How To Improve: Remove unengaged users (e.g., those who have not opened or clicked any of your messages for the last six months) from your database. Setting up reminders to perform regular housekeeping and remove unengaged users from your list may result in higher engagement numbers, which will contribute to future positive inbox placement. This, in turn, will highlight with the ISPs that your recipients are engaged and want to receive emails in their inbox.
Email Metrics for Engagement
6. Open Rate
Open rate = unique opens / emails delivered
Quick pause for a definition: When we say “unique opens,” we only mean that the first open is counted for each email.
Open rate is the percentage of recipients who have opened your email. This metric measures the effectiveness of your subject line, preheader text, and “from” name.
However, open rate is not a very reliable metric because some email providers like Hotmail and Yahoo automatically open emails as the user scrolls through their inbox. On top of that, other email clients do not load images. This fact can skew your open rate because opens are tracked via loading of a 1×1 pixel image. Moreover, emails that are opened and immediately deleted are still counted as “opened.”
Although an open rate may not be a very reliable metric in isolation, open rates can be useful for comparison purposes. Identifying which emails resulted in more or fewer opens helps you judge which emails are more effective. For example, if your open rate has increased from what it used to be, perhaps your subject line, preheader text, etc. have improved.
Although open rates vary by industry, generally achieving an open rate between 20 and 30 percent is good, and above 40 percent is worthy of a pat on the back
Open rate is also an indicator of your brand equity, meaning the reputation you’ve built with your subscribers. Consistent positive experiences and compelling marketing is like a rising tide that lifts all boats. A rising open rate and an open rate higher than the industry average are two indicators of increasing brand equity.
Pro Tip On How To Improve: Write fun, catchy subject lines matched with a killer pre-header, always match the email body content with the subject line, and avoid using overused or spammy words to boost your open rate. Also, test your subject lines and frequency of sends. You can also experiment with your preference center to give subscribers the option to choose the types of emails they want to receive in your welcome email.
7. Click-Through Rate (CTR)
CTR = unique clicks / emails delivered
Another quick definition: Unique clicks simply means only the first click is counted for each email.
Click-through rate (CTR) is the proportion of link clicks out of total emails delivered. A high click-through rate is an indicator that you’ve got strong calls-to-action. This metric indicates how interested your readers are in your brand and offer.
Although it depends on your industry, a click-through rate above 10 percent is decent. When looking at click-through rate, pay attention to the time of day that sees that highest clicks. This information will help you identify the best time to send.
Pro Tip On How To Improve: Make sure your emails are mobile-friendly and try increasing the size of the buttons and links. Focus your recipients on just a few (even a single) CTA so the intent is clear. Make sure that the CTAs are clearly seen and understood, as well as ensuring that the recipient can understand the intended result of clicking.
8. Click-To-Open-Rate (CTOR)
CTOR = unique clicks / unique opens
Click-to-open-rate (CTOR) is the percentage of opens that were also clicks. CTOR demonstrates your readers’ level of engagement with your creative and copy. A good CTOR is generally 10-15%.
CTOR is a great indicator of your alignment between the subject line and the content of the email. A low CTOR is an indicator that your subject lines may be clickbait, misleading, or not clear enough. And a high CTOR is an indicator that your subject lines are appropriately talking up your emails.
One of the downsides to CTOR is that it relies on opens, which, as mentioned previously, are often not accurately recorded. However, through finding clicks as a percentage of opens, you are isolating the effect of your subject lines and better analyzing the effectiveness of your copy and CTAs.
Pro Tip On How To Improve: Make sure that your CTAs are clear, compelling, and conspicuous. Sometimes, copy can clutter your email and hide your CTAs. Test different subject lines, copy, CTAs, and time of day.
Email Metrics for Conversions
9. Conversion Rate
Conversion rate = desired actions taken / emails delivered
Conversion rate is the percentage of recipients who complete a desired action such as purchasing, clicking on an ad, or submitting an email address on a specific landing page.
Your conversion rate reflects the effectiveness of the various components of your email, especially your CTA. If your conversion rates are not where you’d like them to be, invest more time in your copy, imagery, and CTAs.
Pro Tip On How To Improve: Identify any blockers between clicking on the desired link and completing the desired action. For example, if the desired action is completing a purchase but people are getting caught in checkout, maybe invest some time into making your checkout process simpler and easier.
10. Revenue per Subscriber
Monthly revenue per subscriber = monthly revenue from email list / subscribers on email list
To track the revenue value of your subscribers, measure your monthly revenue per subscriber. Revenue per subscriber allows you to track which lists have the highest revenue potential. This knowledge allows you to make educated decisions on which audiences to reach.
Pareto’s law might show that 80% of your revenue will come from 20% of your customers. You want to identify which the common attributes of those 20% of highly valuable subscribers through segmenting and calculating this metric.
Pro Tip On How To Improve: Think strategically when segmenting your audiences in order to more quickly identify which types of subscribers you should be investing in. Do cohort analysis, look at trends in data points, and identify key segment attributes that make a subscriber more valuable.
The types of metrics you want to look at depending on your overall goals. After your email strategy has found its deep purpose — remember to ask those existential email questions mentioned earlier — you then have a handful of very telling metrics through which to measure progress, starting with audience creation and ending in revenue.
If you want to learn more about Cordial, I invite you to join us for a no-strings-attached live demo this Thursday.