Out of boredom, I was teasing Alexa, “What is success?”
“Success is an abstract noun, courtesy OED,” she replied in her candid tone.
Yeah… she is not an email marketer. Else she would have replied that success is when your KPIs are above the benchmark.
So let's breakdown these KPIs (Key Performance Indicators) and see how they are calculated, connected to each other and how each one influences your email marketing.
What are Email Marketing KPIs?
KPIs are simply numbers to indicate how your email marketing is performing with regard to your goals for each campaign. When you choose any goal for your campaign, you will have to define the KPI to judge if the goal was achieved or not.
Each email marketing campaign is unique. Few are sent to generate leads while a few to grow a subscriber base and a few more to re-engage with your subscribers.
But no campaign is run in isolation so despite each one being different, there are key email performance metrics that will determine your overall email marketing strategy. These will also help you set your own email KPI benchmarks.
Just record each metric for all campaigns. Then take an average for the last 6 months and compare your numbers each time with this average which is now your benchmark.
You can divide the KPIs into three categories: List Health, Email Performance, Email ROI.
- List growth rate
- Unsubscribe Rate
- Bounced Email
- Email Open Rate
- Click to Open Rate
- Click-Through Rate
- Email ROI
- Revenue per email
- Revenue per subscriber
Let's look at each of these in detail.
1) List Growth Rate
The rate at which the total number of subscribers in your broadcast list increases. It is calculated after taking into account new subscribers and subtracting the unsubscribers.
It indicates the performance of your lead-generation activities and the overall engagement of the audience, and is one of the most important email engagement metrics. If fewer people are getting added to the list compared to the number of people unsubscribing, then list growth will be negative. If you add more people compared to the number of unsubscribers, then your list growth will be positive.
How is list growth rate calculated?
List Growth Rate = ([(Number of new subscribers) - (Number of unsubscribes + email/spam complaints)] ÷ Total number of emails on your list]) x 100
2) Unsubscribe Rate
Percentage of people who opted out of your email list after receiving an email.
A high unsubscribe rate will negatively impact your email deliverability. This will signal the spam filters that your emails are not relevant to people as they are unsubscribing and hence your future emails will go to the spam folder for the rest of the recipients.
How is unsubscribe rate calculated?
Unsubscribe Rate = (Unsubscribers ÷ Successful email deliveries) x 100
3) Bounced Emails
Percentage of emails that didn't get delivered at all to the recipient because the email was returned by the recipient's email server.
There can be either temporary or permanent reasons for this. It's called a hard bounce when the reason for return is permanent and a soft bounce if the reason for non-delivery is temporary. You can read more about email bounce here.
The only way to reduce it is to clean your email list of all invalid, incorrect email addresses.
How is email bounce rate calculated?
Email Bounce Rate = (number of emails bounced ÷ number of emails sent) x 100
4) Email Open Rate
Out of all the emails that got delivered to the recipient, it is the percentage of people who opened the emails.
How is email open rate calculated?
Email Open Rate = (total unique opens ÷ total recipients) x 100
A low email open rate shows that either your emails are not getting delivered to the inbox and are going to the spam box instead. Or it can also mean that your subject lines are not exciting enough for people to open. This is a key metric to show engagement as well.
5) Click to Open Rate
Out of all the people who opened your email, it's the percentage of people who clicked on the CTA given in the email.
How is click to open rate calculated?
Click to Open Rate = (unique clicks ÷ unique opens) x 100
This number indicates how well the email was received and whether it made the reader take an action or not. Usually, it's a good practice to make your CTA clear and repeat it more than once to increase the click to open rate.
6) Click-Through Rate
Out of all the people who received your email, it's the percentage of people who clicked on the CTA given in the email. It's quite important to monitor the click-through rate.
How to calculate email click-through rate?
Email Click-through rate = ( Emails clicked ÷ Emails sent) X 100
It gives an idea about what percentage of your audience is interested in your content over time.
7) Email ROI
Email ROI is used to calculate the profitability and effectiveness of email as a marketing channel .
How is email ROI calculated?
Email ROI = (Revenue from email marketing - Investment made) ÷ Investment made.
When calculating the investment made, include the cost of infrastructure, paying for designing, writing, and scheduling emails. The revenue from email marketing can be attributed by tracking the sales from each campaign. And sometimes, it might not be so direct when the emails are more focused on engagement.
But it's important to know the ROI to judge whether it is helping your business or draining money from it.
8) Revenue Per Email
It is the total revenue generated from a campaign divided by the number of emails sent.
How is revenue per email calculated?
Revenue Per Email = Total revenue from email campaigns ÷ number of emails in the campaign
Your revenue per email might vary with different segments in your broadcast list. This can help you figure out which segment best resonates with a particular message.
9) Revenue Per Subscriber
It's the amount of revenue generated in a campaign divided by the number of subscribers to whom it was sent.
How is revenue per subscriber calculated?
Revenue Per Subscriber = Total revenue from email campaigns ÷ number of emails in the campaign
Revenue per subscriber will tell you the worth of your list. If it's too low that means you have a huge list but most of the subscribers are just interested in free value and don't want to make a transaction yet. So your role is to figure out what they want and charge correctly for it.
How are you Tracking Your Email Marketing KPIs?
Now that you know the most significant email engagement metrics one should be tracking to determine the overall success of email marketing, it's time to have the right tools to collect and track these.
Tracking these email metrics might look challenging, but if you have the right email marketing tool like SendX built with a powerful analytics engine, then it's a breeze.
1) What KPIs for email marketing can I track to measure the success of my email campaign in SendX?
There are few basic metrics that every email marketer should track to monitor their campaign:
- Email Open Rate
- Click to Open Rate (CTOR)
- Click through Rate (CTR)
- Open Rate (OR) / Unique Open Rate (UOR)
- Unsubscribe Rates
2) What is Click to Open Rate (CTOR) in email marketing?
Click to open rates is the measure of who opened your email, and actually clicked on a link inside your email copy. It is generally calculated as follows: for example, if your email receives 200 clicks and 250 opens, then your CTOR is 80%.
3) What is Click-through Rate (CTR) in email marketing?
Click-Through Rate helps you determine how many people clicked on the links in your email. It gives you an overview of how well your email marketing campaigns are performing.
4) What is Open Rate (OR) / Unique Open Rate (UOR) in email marketing?
Email open rates denote the number of recipients who opened your email. It gives you the actual idea of what happened once your email reaches a mailbox, whether it performed what you intended for.
5) What is Unsubscribe Rate in email marketing?
Unsubscribe rate is the percentage of users who unsubscribed from your mailing list. These are the people who had clicked on the unsubscribe button that you had included at the bottom of your emails.
6) What is Conversion Rate (CR) in email marketing?
Conversion rate helps you understand whether you have met the objective of your email campaigns. It would depend on your business goals - from registering for an event or webinar to buying your products, subscribing to your email list, etc.