When we talk about email marketing, we instantly think of “spams”, well this certainly is a bad thing but is not the only truth. Just like other digital marketing strategies, email marketing has also evolved with time. This is one of the most effective marketing tools available to the marketers, as it has all the power to turn users or subscribers into paying customers. The truth is well-executed email marketing is an integral part of overall digital campaign success.
Email marketing remains a potent tool for businesses to reach and engage their target audience. While its effectiveness hinges on strategic execution, measuring its performance is equally crucial. By closely monitoring key email marketing metrics, businesses can optimize campaigns, enhance ROI, and make data-driven decisions to drive growth.
To maximize the impact of your email campaigns, it's essential to establish clear goals and select metrics that align with your business objectives. This guide explores all essential email marketing metrics, providing definitions, formulas, and actionable insights to help you make data-driven decisions.
Why Email Marketing Metrics Matter?
According to a study from VentureBeat, marketers are really not doing a great job when it comes to capturing information and applying it in their decision-making process. 32% of the surveyed enterprises said they don’t know which devices their customers use to open emails and other 29% are just not tracking their revenues via emails.
Considering the fact that email delivers the highest ROI of any marketing channel, this is why monitoring email marketing metrics becomes crucial as every marketer would want to track and optimize their marketing efforts to ensure they get the best possible results. To know more about the trends and tactics for success in Email Marketing in 2024, you can refer to this handy guide where we have answered the most frequently asked questions about Email Marketing.
Which Email Marketing Metrics Do Matter?
Email marketing metrics are the compass guiding your campaigns towards success. By closely monitoring these indicators, you can measure campaign performance, understand audience behavior, and optimize your strategies for maximum impact. Some of the core email marketing metrics are listed below. We will split the metrics on the basis of their importance: basic metrics, advanced metrics and additional metrics so as to better understand their use case for your specific needs. We will also look at formulas on how to calculate the metrics along with insights that can be derived by analyzing the metrics themselves. Now that we are on the same page, let's move ahead, starting with the basic metrics first:
Basic Metrics:
- Open Rate: Help your clients to make informed decisions by closely monitoring this key metric. By looking at the total number of emails opened, you get a better understanding of how your campaigns are performing. You can also make any changes based on real-time data to further improve engagement. The number of opens means more chances of your message being resonated with your users. This metric tracks the percentage of recipients who open an email.
- Formula: (Total Opens / Total Delivered Emails) * 100
- Insight: Higher open rates indicate relevant and engaging subject lines.
- Click-Through Rate (CTR): This is another metric that largely catches the attention of your clients as they would want to know if their audiences are actually reading their marketing emails. Click-through rates are what makes it clear. This is the actual percentage of people who are opening emails and further taking actions. Do not confuse actions here with conversions, here it means they are clicking on the attached file/link embedded in the email. CTR is also frequently used for determining the results of A/B tests, as these tests are often designed with the intention of finding new ways to get more clicks in your emails. This metric tracks the percentage of recipients who click on a link within an email.
- Formula: (Total Clicks / Total Opens) * 100
- Insight: The higher the percentage of recipients who click on a link within an email, the better. This metric also helps in measuring the effectiveness of your email content and calls-to-action (CTAs).
- Bounce Rate: Bounce rate is the total percentage of emails sent but not successfully delivered to the recipients’ email. There are two kinds of bounces you need to track:
- Soft Bounce – These occur due to a temporary problem with a valid email address, like a full inbox or an issue with the recipient’s server. Usually, the recipient’s server holds the emails and delivers it when the issue is resolved.
- Hard bounces – These occur due to an invalid, closed, or non-existent email address. Such emails are never successfully delivered.
- These indicators are usually calculated with regard to the total number of emails.
- This metric tracks the percentage of emails undeliverable due to invalid or inactive addresses.
- Formula: (Total Bounces / Total Delivered Emails) * 100
- Insight: High bounce rates indicate poor email list hygiene or technical issues.
- Unsubscribe Rate: Another primary metric you would want to look for email success are the unsubscribe rates that your emails are generating. High unsubscribe rates mean that you are totally endangering the health of your email marketing list and your sender reputation. It can also mean that the content you are offering is not compelling enough. As a marketer your goal is always to grow your email list and not reduce its size. So if you are seeing high rates of unsubscribe requests, it’s time to closely review the quality of your email marketing. This metric tracks the percentage of recipients who opt out of your email list.
- Formula: (Total Unsubscribes / Total Subscribers) * 100
- Insight: A high unsubscribe rate suggests irrelevant content or excessive frequency.
- Email ROI: Email ROI [Return On Investment] is the most important metric you need to track and your clients would love to see this one. Positive email ROI means your efforts are working well which means – new leads, new customers, and increased revenues. To track this metric you need to look at how many conversions you have successfully generated through your email marketing campaigns. Conversions can happen on your website, in-store, or directly through emails. Monitoring this metric will help you determine the overall success and also help you improve your campaign performance. There are different formulas to calculate ROI — but there are several ways to approach calculating the ROI of your email campaigns. Depending on your type of business, you might prefer a different one.
- Formula of ROI : ((Total Revenue from Email - Total Email Costs) / Total Email Costs) * 100
- Insight: By meticulously analyzing email ROI, businesses can identify top-performing campaigns, optimize spending, understand customer lifetime value, benchmark against industry standards, and make data-driven decisions for future marketing efforts.
Advanced Metrics:
- Conversion Rate: The conversion rate is one of the most important KPIs to monitor for your clients. Well, the whole point of marketing email is to get the readers to take some action. This metric essentially displays how many of the individuals that you emailed took a revenue-generating action or signed-up at your website. One important thing to note here is that your marketing email should always contain an interesting Call-To-Action (CTA). So whether your CTA is to subscribe to your website or download a brochure, the conversion rate will help you determine to what extent you are attaining your goals! This metric tracks the percentage of recipients who complete a desired action (purchase, sign-up, etc.).
- Formula: (Total Conversions / Total Clicks) * 100
- Insight: Measures the effectiveness of your email content in driving desired actions.
- Revenue Per Email (RPE): RPE measures the average revenue generated from each email sent in a campaign. It's calculated by dividing the total revenue from the campaign by the total number of emails sent.
- Formula: Total Revenue Generated / Total Emails Sent
- Insight: Evaluates the overall profitability of your email campaigns. A higher RPE indicates greater efficiency in converting email recipients into paying customers.
- Customer Lifetime Value (CLTV): CLTV is the total revenue a business can expect to generate from a single customer account throughout the business relationship. It encompasses the customer's initial purchase, repeat purchases, and the overall duration of their engagement with the company.
- Formula: Average Order Value * Purchase Frequency * Customer Lifespan
- Insight: Helps assess the long-term value of email marketing efforts in customer acquisition and retention. The higher the revenue a customer generates over their lifetime, the better. Remember, it is always ideal to increase an existing customer’s lifetime value rather than constantly acquiring new customers in the long run to keep the business healthy.
- Email Share and Forward Rate: Forward rate or Email share rate tells you the number of times your content is shared. This metric is important because clients are always looking for potential leads, and finding them is not easy. So, when an email is shared or forwarded by your audience, it instantly gives you access to new contacts. This metric essentially measures how often people open, read, and like your email message so much that they share it with someone else. It also displays the most popular emails. This metric tracks the percentage of recipients who share or forward your email.
- Formula: (Total Shares / Total Recipients) * 100
- Insight: Indicates content virality and potential for increased reach.
Additional Metrics for Deeper Insights:
- Click-to-Open Rate (CTOR): The click-to-open rate (CTOR) compares the number of unique clicks to unique opens. This number indicates how effective the email message, design, and content performed, and whether it created enough interest in the recipient to take action. This metric tracks the percentage of email opens that result in a click.
- Formula: (Total Clicks / Total Opens) * 100
- Insight: Measures engagement beyond simple opens.
- Mobile Open Rate: The percentage of emails opened and clicked on mobile devices. In today’s increasingly mobile and digital world, a lot of people prefer to catch up on their mailbox during commuting or while doing mundane tasks. And with the constant availability of a smartphone during most of these chores, there is a pretty good chance that the users choose to open, read and reply to mails right from their mobile devices. So it becomes a pretty valuable metric to track to understand how you can improve the mobile friendliness of your mails.
- Formula: (Total Clicks on Mobile devices / Total Opens on Mobile devices) * 100
- Insight: Measures the effectiveness of your mobile-optimized emails.
- List Growth Rate: List growth rate pertains to the rate at which a marketing list, such as an email subscriber list or a customer database, increases over a specific period. It serves as a key metric for businesses to evaluate the effectiveness of their marketing initiatives and the overall health of their customer base. This metric tracks the rate at which your email list is expanding.
- Formula: ((New Subscribers - Unsubscribers) / Total Subscribers at the Beginning of the Period) * 100
- Insight: Indicates the effectiveness of your subscriber acquisition efforts.
- Deliverability Rate: Deliverability rate is a measurement of whether your email campaigns actually get into your subscribers' inboxes. And because gateway servers don't let senders know if their emails are blocked by spam filters or sent to spam folders, it's more difficult to get an accurate measurement of your email deliverability. This metric tracks the percentage of emails that reach recipients' inboxes.
- Formula: (Total Delivered Emails / Total Emails Sent) * 100
- Insight: High deliverability rates are essential for email marketing success.
- Spam/Complaint Rate: Also may be defined as Abuse Rate
This metric displays the total number of subscribers who marked your email message as spam. Abuse complaints are very serious, but it doesn’t essentially mean you are in trouble as even the well-managed lists get a few here and there. This is one rate which you need to keep as low as possible. This metric surely never betrays you if your complaint rate goes over 0.1%, be sure of one thing i.e. there is some issue with your mailing.
- This metric tracks the percentage of recipients who mark your email as spam from the total number of mails that were delivered .
- Formula: (Total Emails in Spam marked as Spam / Total Delivered Emails) * 100
- Insight: A high spam complaint rate can damage your sender reputation.
- Time Spent on Email: The average time recipients spend reading your emails.
- Formula: Calculating the exact time spent on email is challenging due to its multifaceted nature. It involves various activities like checking, reading, responding, composing, and managing email accounts.
- Insight: Indicates engagement levels and content effectiveness. In the most recent (2022) edition, Litmus found people spent just nine seconds, on average, looking at an email. The researchers found that 30% of emails, on average, are looked at for less than two seconds, 41% are looked at for between two and eight seconds, and only 29% are looked at for more than eight seconds.
- Web Traffic from Emails: Email marketing is just not about opens, clicks, and unsubscribes, understanding how your email campaigns affect web traffic is equally important. It is important to track the success of your campaigns by creating monthly targets and comparing it with the actual performance to understand if your content is pulling users to the website.
- Formula: ((Current Period Traffic - Previous Period Traffic) / Previous Period Traffic) * 100
- Insights: Helps to understand visitor behavior, identify popular content, measure marketing campaign effectiveness, uncover audience demographics, and optimize website performance.
- Churn Rate: This metric automatically determines if your email list is growing or shrinking. It basically gauges the total number of subscribers by subtracting unsubscribes and adding new subscriptions. However, this metric doesn’t tell you which campaign actually lost you subscribers.
- Formula: ((New Subscribers - Unsubscribers) / Total Subscribers at the Beginning of the Period) * 100
- Insights: Assessing Churn Rate over time offers valuable insights into whether customer satisfaction is increasing, decreasing, or remaining stable over time. The goal is to see Churn Rate decrease over time, and if it's not, detect problems early and prevent them from becoming bigger issues.
Insight-Action Framework
To maximize the value of these metrics, use the following framework:
- Set Clear Goals: Define what you want to achieve with your email marketing campaigns.
- Choose Relevant Metrics: Select metrics that align with your goals.
- Establish Benchmarks: Compare your performance to industry standards or previous campaigns.
- Analyze and Identify Trends: Look for patterns and trends in your data.
- Take Action: Implement changes based on your findings to improve performance.
Choosing the Right Metrics
Selecting the appropriate email marketing metrics is essential for gauging campaign effectiveness and making data-driven decisions. The optimal set of metrics depends on your business objectives. There never is a one-size fits all approach to this. Here's a detailed breakdown of key metrics, their significance, and how to leverage them:
Align Metrics with Business Goals
- Sales and Revenue: Focus on metrics like conversion rate, revenue per email (RPE), and customer lifetime value (CLTV) to measure the direct impact of email campaigns on bottom-line revenue.
- Lead Generation: Prioritize open rate, click-through rate (CTR), and lead conversion rate to assess how well your emails generate interest and capture leads.
- Brand Awareness: Track open rate, share rate, social media engagement, and website traffic to gauge brand visibility and reach.
- Customer Engagement: Monitor metrics like click-to-open rate (CTOR), email share rate, and time spent on email content to understand audience interaction.
Consider Your Audience and Industry
- B2B vs. B2C: B2B businesses often prioritize lead generation and nurturing metrics, while B2C companies may focus more on sales and customer retention.
- Customer Lifecycle Stage: Tailor metrics to different customer segments. For example, focus on acquisition metrics for new subscribers and retention metrics for existing customers.
- Campaign Type: Different email types (promotional, transactional, nurturing) require different metrics. For instance, transactional emails might prioritize delivery rate and bounce rate.
Balance Basic and Advanced Metrics
- Core Metrics: Start with fundamental metrics like open rate, click-through rate, bounce rate, and unsubscribe rate to establish a baseline.
- Advanced Metrics: As your email marketing matures, incorporate metrics like conversion rate, revenue per email, and customer lifetime value for deeper insights into campaign performance and ROI.
Data Visualization and Benchmarking
- Visualize Metrics: Use charts, graphs, and dashboards to identify trends, patterns, and outliers in your data.
- Benchmarking: Compare your performance to industry averages or competitors to assess your position.
- Set Realistic Goals: Establish clear benchmarks and targets for your email marketing campaigns.
Continuous Optimization
- Regular Review: Analyze metrics on a regular basis to identify areas for improvement.
- A/B Testing: Experiment with different subject lines, content, and design elements to optimize performance.
- Data-Driven Decisions: Use insights from metrics to make informed adjustments to your email campaigns.
By carefully selecting and analyzing the right metrics, you can gain valuable insights into your email marketing performance, make data-driven decisions, and ultimately achieve your business goals.
The Takeaway
Monitoring email marketing metrics is crucial for optimizing campaigns, demonstrating ROI to stakeholders, and ensuring continuous improvement. By tracking the right metrics, businesses can gain valuable insights into audience behavior, content effectiveness, and campaign performance. Tools like ReportGarden can streamline this process, providing comprehensive reporting and actionable insights to drive email marketing success.
ReportGarden offers a robust platform for tracking and analyzing email marketing metrics. Its customizable dashboards and integrations with popular email marketing tools make it an ideal choice for businesses of all sizes.
Want to try out the new ReportGarden? You can sign up today for our free 14 day trial. And the best part? No credit card details required. So what are you waiting for? Sign up right now at ReportGarden.
