Email marketing refers to the act of sending out emails that contain commercial messages, typically to a large group of people at once. Most of these emails are sent to either a potential customer (to convert them) or a current customer (to retain them).
As a concept, email marketing basically covers anything from sending out advertisements to asking for donations and such. It comes in numerous types and has a lot of objectives behind it, some of which we’re going to discuss in a while.
Still, our primary focus today is on results. After all, you can’t tell if your efforts are paying off if you don’t know how to tell a good result from a bad one.
Fortunately for you, there are a lot of metrics and KPIs (Key Performance Indicators) to look for when assessing your email marketing efforts. So many, in fact, that we’re choosing to just focus on eight of them in the article.
Types of email marketing
Before we delve into email marketing KPIs, let’s take a quick look at the four main types of email campaigns.
Perhaps the most common and popular type of email marketing, email newsletters act as a way of providing new subscribers with the necessary knowledge about your business. What we mean by necessary knowledge is anything from thought-engaging content to updates about new services and products.
You’re basically building a relationship that is based on loyalty with your subscribers. That, in turn, improves engagement on your website and social media as well as increase retention. Speaking of which, let us now move to the second type of email marketing campaign.
Retention emails come in different shapes and forms, all with the aim of keeping your customers around. An example of a retention email is a message requesting feedback from a customer about a product or service that they recently bought. Another can come in the form of a special offer geared towards subscribers who haven’t interacted with your website and messages much lately.
As the name already suggests, acquisition emails refer to emails that aim to convert subscribers who aren’t yet customers into ones. So, it should come as no surprise that most acquisition emails come in the form of either informative content about your business or attractive offers, or both.
If we want to get technical, the sole purpose of acquisition emails is to turn leads into conversions. By turning these people who have expressed interest in your business into customers, you’re basically turning more revenue in.
The last type of email marketing is promotional emails. They include exclusive offers aimed at engaged subscribers as some sort of reward, a heads-up about a new product or service, and more. So basically, a promotional email is basically a combination of the previous three types, a very good and effective one.
8 email marketing KPIs to use right now
Email marketing KPIs: Inbox placement rate
Inbox Placement Rate, or IPR for short, refers to the benchmark used to determine the percentage of emails that reached the targeted inboxes rather than the junk or spam folders. You basically calculate it by dividing the number of emails delivered by the number of emails sent by your organisation. In case your IPR is low and you wish to increase it, we recommend you do the following:
- Remove any subscriber who hasn’t engaged with your messages in the last three months.
- Authenticate your email account.
- Make sure your content is relevant and doesn’t appear spammy.
- Double-check your emails and make sure that they are not considered spam by email service providers.
We all have email addresses of our own and have undoubtedly been subjected to marketing emails throughout the years. None of us can deny that we have some of those emails sitting in our inboxes, unopened and lonely.
So, it’s quite essential as an email marketer to take note of how many of your emails are opened. We also recommend that you compare your open rates with industry averages. But, and this is a huge but, open rate is considered by many to be an exceptionally misleading metric. This is mainly because most people who rely on email marketing also include images in their email. And nowadays, a decent number of people have image-blocking automatically enabled on their mail client. These people won’t count even if they open and read your email from start to finish.
For most email marketers, CTR is basically an open rate but on steroids. This is because it acts as an indicator of how many people actually clicked on a link within your email. Still, you need to determine which link in your email users actually clicked. This is because clicking on the unsubscribe link, for example, also counts as a click.
Calculating your CTR goes as follows: (Total clicks ÷ Number of delivered emails) * 100. For example, you get a total of 100 clicks from 5000 delivered emails. That’s a 2% click-through rate.
CTR is one of the most common email marketing KPIs due to how simple and straightforward it is as a benchmark. It’s also a great way of performing A/B tests, the act of using two different versions of an email copy to determine which one is perceived as superior by your customer base.
This refers to the percentage of email recipients who not only clicked on a CTA link but also completed the desired action behind it. The action can be anything from a sign up to a purchase. You calculate the conversion rate by dividing the number of people who completed the desired action by the number of emails delivered and multiplying it by 100.
Take, for example, 10 people completed the desired action from a total of 4000 delivered emails. That’s a 0.25% conversion rate.
As mentioned, one of the main objectives of email marketing is to get people to convert to your offer. So, it should come as no surprise that the conversion rate is one of the most important email marketing KPIs. It’s one of the few ones that are directly tied to your goals as a business.
But, measuring the conversions rate on your emails isn’t as easy nor as straightforward as it sounds. You basically need to integrate your email platform and your web analytics by creating tracking URLs for your email links. The people over at HubSpot have made a good tutorial about this.
There’s a lot of information that one can learn from their unsubscribe rate. For instance, it shows that people actually bothered to open your emails and read them at some point in the past, but they’re just not interested in your messages anymore.
Unsubscribe rate as an email marketing KPI shines when you implement a major change within your marketing emails, such as a redesign, segmentation, and more. The relation here is straightforward and logical. If there is a sudden surge of unsubscribes after a change, then you might want to put it on reverse.
Email marketing KPIs: Bounce rate
Before we get into bounce rates, let’s first distinguish between the two types of bounce rates. First, there is what we call a hard bounce, which refers to a permanent one. Then there is a soft bounce which refers to a temporary bounce.
Hard bounces are usually the result of invalid email addresses. This can happen due to a typo or an email getting deleted. Too many hard bounces are generally a sign that you should do some list cleansing.
Soft bounces, on the other hand, are usually explained by issues at the end of the recipients. It can be anything from something as silly as the recipient having a full inbox to something as big as the servers being down.
Monitoring your bounce rate is important because it helps you identify how effective your copy and design are when it comes to attracting new visitors to your website.
The forwarding rate refers to the percentage of recipients who bothered to click on the “Forward to a friend” button. This metric might seem insignificant, but it’s actually quite an important email marketing KPI.
Simply because it acts as a generator for new contacts.
As an email marketer, it is only natural for you to mainly focus on increasing your conversion rate, so attracting new leads sort of becomes a secondary task even though it shouldn’t. And this is where people who forward your email come into play. They simply act as living bridges for you to make new leads.
You basically divide the number of clicks between the forward or share button by the number of total delivered emails, then multiply it by 100 as usual.
ROI, short for return on investment, is the result of dividing your total revenue from a marketing campaign by the total spending. For example, you made £2000 in additional sales from an email marketing campaign that you invested £500 in.
ROI = [(2000 – 500) ÷ 500] * 100 = 300% returns on investment. This formula is the most basic version of calculating your ROI. You might want to use a different one depending on which industry you function within.
This email marketing KPI is crucial for many out there because it simply answers the question of “what is worth it?”.
Confused? Let our experts help.
All those new terms may make email marketing seem like an impossible task, but it doesn’t have to be that way if you get the right kind of help from the right type of agency. If you need help with email marketing or any other aspect of internet marketing, get in touch, and our experts will come to the rescue.