Mar 22, 2022
Legendary business guru Peter Drucker, once said - "If you can't measure it - you can't improve it."
During the heydays of Drucker, measuring was a tough job indeed. Today, it is far more straightforward, thanks to the readily available digital data.
Yet, even in 2022, businesses struggle to set and measure the Key Performance Indicators (KPIs) for the various initiatives.
For example, many companies send emails to their customers or audience without any measurement process in place. This lack of measurement demotes the entire initiative from a strategic one to a vanity one!
We, therefore, thought of putting this article together to help you set up an analytics and measurement framework for your email campaigns. This article may be a bit more on the technical side - but trust us when we say this: Once the analytics are set up, you can’t imagine the number of insights you'll gather!
You might already be aware of the benefits of email marketing as a channel for lead acquisition. If you don’t, you might want to check out our article Benefits of Email Marketing.
Email marketing is cheaper than most other digital marketing channels. Email can provide you with a strategic cost advantage by bringing down your overall marketing spend if done correctly.
While other ad platforms will charge you either for impressions or for clicks, your additional cost per email is negligible in the case of email marketing.
But to get the most from your email marketing campaign, it is essential to measure your email marketing kpis (Key Performance Indicators). And here are a few reasons why:
It helps you understand the content your clients engage with the most. Numbers will help you choose the most relevant content for your clients. And the more people engage with your email, the better it is for your campaign results. For example, an educational mail may work better (more time spent reading, clicks to links, etc.) than a simple mail that’s communicating an offer. In such cases, you may want to bundle your offer with your educational mail.
You can personalize your campaigns to achieve better results in the future based on historical insights. People love receiving emails, but they hate being sold. By taking a personalized approach, you are more likely to resonate with the reader and thus get better results. It is valid for both the subject line of the email you are about to send out and the content of the email itself. Just imagine, Jake receives two emails... The subject lines are:
Best offers of Hoodies
Hey Jake, I found these great offers for you!
Which one is Jake more likely to open? We hope you got it right 😅
Understand your overall channel Return on Investment (ROI) by accurately measuring it. It may not cost you much to add another recipient to your email, but overall the investment is needed for your email marketing efforts. You will need to invest in content creation and visuals. You need to be able to measure and justify the investments; otherwise, what's the point, right?
Compare yourself with a market benchmark. This would help you understand whether you are doing better or worse than your peers. Most email marketing tools provide you with these numbers directly, so there is no need to worry.
If you want to make your email marketing effective, you need to have measurement checkpoints at all campaign stages. This measurement of email marketing KPIs will help you diagnose better if there is an issue in your process. It will also help you understand which stage should be changed or adjusted.
For an email marketing campaign, the typical data checkpoints or KPIs that you need are:
How many of your sent emails are getting delivered?
How many receivers are opening your emails?
How many receivers are reading through your emails?
How are they engaging with your content?
To answer each of these questions, we have specific, well-defined metrics.
The first set of metrics helps us understand whether our emails are getting delivered and opened:
Bounce Rate is the percentage of the total emails sent but not delivered to your recipient's inbox.
Although it is not directly linked to your email marketing goals, the bounce rate needs to be checked regularly. It helps you ensure there are no major issues in your emails.
If you get a lot of hard bounces, then ISP may consider your company as a spammer.
Wondering what a hard bounce is? It’s the geeky term for “email cannot be delivered permanently”. It could be for many reasons (e.g. email ID doesn’t exist, the mailbox is full, etc.).
However, if there are too many of those, the mailing servers (geek name: ISP) may infer that your list isn’t maintained properly and thus punish you accordingly!
As a result, none of your future emails will get delivered.
Open rate is the percentage of the email recipients who actually open your email. There are a few factors that determine the open rate:
Subject Line: Who wouldn’t want to open a mail with a juicy subject line?
Sender Details: Of course, some senders are more liked by others. For example, your recipient is more likely to open a mail from Peter (or John)l rather than a mail from Database1021. The human touch matters!
Email Preview: Email and the subject line play an important role in determining whether a mail will be opened.
There is another factor that we need to consider - visuals. If your email is heavy on images - it may not open or be shown properly in certain mailboxes. That would affect your open rate.
Once an email is opened, there are a few possible actions that a user can take, they may:
Read it through
Click on links within the email
If they like what they see - they may forward it to friends
And there is a chance that they may unsubscribe (Oh no!)
Clickthrough rate (CTR) is the percentage of people who clicked on at least one link in your email message.
It allows you to calculate the performance of every email that you send. CTR gives a direct insight into the number of people who engage with your content.
Conversion Rate is the percentage of the email recipients who click on the link(s) in an email and complete any desired action. This action could be something as simple as taking up a survey all the way to buying directly from your email offer!
It is an important metric to determine the extent to which your goals are achieved.
You should note that Conversion Rate (CVR) is a very critical email marketing metric for the following reasons:
It’s always cheaper to improve your CVR than increase your audience size
Understanding your CVR will help you predict key business metrics like Revenue & Profit
When more users convert from your email, your domain is likely to build a reputation. This will help you scale email marketing efforts easily without the fear of getting blacklisted.
The percentage of the email recipients who click on the ‘share this’ button for posting your email content to their social networks.
It also includes people who go for the ‘forward to a friend option'.Tracking this metric is important. It eventually helps you grow your audience.
You already have your potential clients in your database…
So, pay attention to the kind of offers and articles that get the most shares and plan your future email campaigns accordingly.
Your email list grows at a specific rate, which is called the list growth rate.
Apart from conversion rates, CTR, and other call-to-action metrics, your list growth rate is also essential for :
Extending your reach: The obvious advantage of a growing list is that you can let more people know about your brand.
Expanding your audience: Email lists become a business asset. You can always reach your audience with your latest offers. And there is no need to run expensive ads!
Building Reputation: Most importantly, you become known as someone who is knowledgeable, trustworthy & transparent. This helps you stay in consideration of the prospect.
You must pay attention to it if you want your subscriber list to grow and stay at a healthy number.
It is the percentage of the email recipients who unsubscribe from your mailing list once they open an email.
Many subscribers who get tired of getting emails from your company are likely to just ignore your emails. At the same time they may not go through the whole ‘unsubscribe’ procedure but simply stop interacting with your email.
Thus, a low unsubscribe rate on its own should not be read as a success factor. Just something to keep in mind.
Eventually, all the above metrics aim to help you determine the overall Email marketing ROI (Return on Investment).
ROI (Return of Investment) is the profit portion of the investment. Most people prefer expressing it as a percentage:
ROI = (Revenue earned - Investment)/Investment*100
One more thing to keep in mind, you don’t actually need to do the calculations manually.
Most software for email marketing, like SanityDesk, provides you with insights about your campaigns. You just need to understand the implication of the numbers and analyze the data you get. It will ensure your decision-making process leads to success.
A high ROI Email Marketing Campaign can eventually become the centerpiece of your marketing strategy. It can also become a complementary strategy to any other marketing strategy you are willing to choose.
Over the years, many technologies and consumer brands have successfully navigated through their early days using email marketing. You can too!
Book a call with our team and discover
how SanityDesk can scaleup and automate your business.
Join us on a weekly journey through the history of Technology, and the Future that we need to collectively create to realize the promise and avoid the perils of the Digital Age.