Email Marketing is a process that consists of a lot of phases that need to be implemented in a detailed and pre-planned manner. It consists of email list building, segmentation, content creation, implementation, tracking, and monitoring. We have already discussed each and every aspect of email marketing in our earlier published articles. If you want to have not read those articles yet, then please do because every article is interlinked and would not make any sense if you miss any one of those. All your efforts of building an email list, increasing subscribers, segmenting the audience, and everything which is required to run a successful email marketing campaign will not make any sense if you are not able to track the performance. You can not conclude how successful or how effective your email marketing campaign is unless and until you see the relevant performance indicators.
Thus in this article, we are going to discuss the performance indicators of email marketing and how to measure your progress so that you can see whether you are on track or you need to make some changes in the ongoing campaign to optimize the performance and get better results. To track the ongoing email campaign, you need to determine the metrics. Let's have a look at each of them and understand how it works and how it is going to determine the success of your email marketing campaign.
- Click-through rate (CTR): It is the percentage of the email recipients who clicked on more than one link provided by you in your email.
- How to calculate it: (Total Number of Clicks on the links/ Total number of Emails delivered) x 100
- Illustration: 90 Email recipients clicked on the link provided in the Email/ 100 Total email delivered)x 100 = 90% CTR
It is the primary indicator among all others, which you will probably check. When you open the analytics section of your email campaign, CTR will be the first indicator of the success of your campaign. CTR is also used to determine the result of the A/B test, as CTR is the primary indicator; email marketers rely upon and trust the CTR and often determine the success of email campaigns through CTR.
Prominence: CTR is one of the most important performance metrics of the email marketing campaign. It gives a direct pointer towards how engaging the ongoing email campaign is and how people respond to different kinds of content.
- Conversion rate: it is the percentage of the total email recipients that clicked on the link provided in the email and completed the desired action, like feeling the registration form or buying a recommended product.
- How to Calculate It: (Total Number of people who completed the desired action/ Total number of emails delivered) x 100
- Illustration: 25 recipient completed desired action/100 emails delivered x 100 = 25% Conversion rate
When your customer receives the email and clicks it, your main objective is to make him do what you want him to do. You have a specific purpose for sending that email. Thus, if you send your customer an email asking them to download your smartphone app, then any customer who is downloading your app through the link you provided in the email will be considered a conversion. You must be wondering then what is the difference between conversion and call to action. Remember, your call to action is the ultimate goal; conversions are just stepping stones towards the ultimate goal.
You can measure the conversion rate of your email campaign by integrating the email platform and the web analytics tool.
Prominence: Conversion rate is an amazing indicator if you want to generate leads; your newsletters conversion can determine how well your content is and how many leads and prospects it is generating.
- Bounce rate: Bounce rate is the total number of emails sent that could not be delivered to the recipient's inbox. In other words, it the percentage of undelivered emails.
- How to calculate it: (Total number of undelivered emails/ Total number of emails sent) x 100
- Illustration: 4 undelivered email/ 100 Total emails sent x 100 = 4 % Bounce rate
Bounced emails can be distributed among two types.
- Soft Bounce: Soft bounce emails are those that are not delivered in spite of having a valid email id. The reason behind soft bounce could be a full inbox or network problem, or server issue. Sometimes recipients servers holds these emails and sends once the issue is solved. You also may chose to send email again.
- Hard Bounce: Hard Bounce emails are not delivered due to the wrong email address and closed email address. You should update your email list and remove all the hard-bounced email ids. It is essential to do so because your internet service provider uses hard bounced email as a key factor to determine the senders reputation.
Prominence: Although bounce rate doesn't directly indicate the success of your email campaign, rather it makes the process fine as it tracks the invalid email ids.
4. List Growth rate: It is the rate at which your email list is increasing
- How to calculate it: (Total number of new subscribers - ( Total number of unsubscribers + Email/Spam complaints))/ Total number of email addresses in your list x 100
- Illustration: (100 New subscribers - (50 Unsubscribers and email/Spam complaints) / 500 Email addresses in the list x 100 = 10% Growth Rate
Apart from the key indicators like CTA and conversion rate, the List growth rate is also a good indicator for the overall email marketing strategy. As a business, you always want to grow and grow faster. Thus, you always need to be prepared with your strategies to attract new customers into your business and list growth rate gives your performance summary of how well you are able to attract new customers.
Prominence: There are some customers who unsubscribe to your emails, and there are some customers who sign in for your emails. List growth rate, track them all, and give you exact number so that you could analyze your performance.
5. Email Share/ Forward Rate: The total number of email recipients who shared and forwarded your email to their friends or shared the email content on social media through the social media share button.
- How to calculate it: (Total number of clicks on share/forward button) / Total number of delivered Emails) x 100
- Illustration: 15 clicks on the share/forward button / 100 Total Emails delivered = 15% Email sharing/forwarding rate
At first, the email sharing rate might sound like a very minor indicator, but it is one of the most important indicators. As people share your emails, it reaches out to the new people who also might be interested in buying your products and being your customers.
Prominence: Don't keep track of the email sharing rate to determine which kind of content is working and which offers are liked by your customers and use that information to plan future email campaigns.
6. Overall ROI: It is the total revenue generated from the total spending on the ongoing email marketing campaign.
- How to calculate it: (Revenue added in sales - Total money invested)/ Total money invested x 100
- Illustration: (500 Rs added in the revenue - 100 Rs invested) / 100 x 100 = 400 % Return on Investement
The above is the most generic formula to calculate the ROI. But it may differ from business to business depending upon what exact methodology suits your nature of business.
Prominence: It is very essential to determine ROI, at the end of the end you are running the business to earn profit. ROI gives the exact value you are extracting from each dollar/rupees investment and you should always thrive to maximize the ROI.
7. Open Rate: It is the percentage of the email recipients who opens the email.
Even though marketers believe CTR and conversion rate are the most prominent key performance indicator of the success of email marketing campaigns, there is still a school of though that believes Open rate is also among most important KPIs and shouldn't be ignored.
- How to calculate: (Total number of emails open/ total number of emails sent) x 100
- Illustration: 85 Email recipient opened the email/ 100 email sent x 100 = 85 % Opening rate
- Prominence: The reason why give we are giving so much stress to the opening rate that it is an amazing tool to find out the difference between opening rate and click-through rate. As a growing business, you should always focus on how you can decrease this gap. There will always be some people who are regularly opening your emails but not clicking on the link due to certain reasons. Opening rate will help you to identify such group.
8. Unsubscribe rate: It is the percentage of the email recipient unsubscribing to your email service after opening the email. It shows what percentage of customers have opted not to receive further emails from your side. It is not a very effective tool to track the health of your email marketing campaign, but it is still worth paying attention to it.
- How to calculate it: (Total number of email recipient clicked unsubscribe button after opening the email/ Total number of emails sent) x 100
- Illustration: 8 email recipient clicked unsubscribe button after opening the email/ 100 emails sent) x 100 = 8 % Unsubscribe rate
- Prominence: It is always advised to keep an eye on unsubscribe rate. Always try to minimize it, if you succeed in it, then you can conclude that your content and emails are working and liked by your email recipient. If the unsubscribe is increasing then it's an alarming situation for you. You need to identify what is wrong and why your customers are unsubscribing.