If your business engages in email-based marketing (and it certainly is a good idea), you must continually analyze the trends of several important metrics. By measuring the performance of each campaign and comparing it to your own averages, you can assess the strength of your campaigns. A wealth of statistics is available from your email service provider (ESP).

Growing Your Email List

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Useful Analytics

Let’s examine seven important email metrics and describe how to use them to improve your marketing results:

Bounce Rate — this is the percentage of mail that is not successfully delivered to recipients’ inboxes. This metric will quickly indicate problems with your email list. “Soft” bounces are caused by temporary difficulties with an otherwise valid email address. Soft bounces arise from server problems or full inboxes. Some servers redeliver missed email due to soft bounces, or you can simply resend these as needed. “Hard” bounces arise from permanent problems with an email address, such as invalid, closed, or non-existent addresses. Addresses that are hard bounced need to be removed from your list, so as not to tarnish your reputation among Internet service providers (ISPs). A high bounce rate may lead ISPs to view you as a spammer – not a good thing.

Delivery Rate – the percentage of emails successfully delivered (not bounced). A poor delivery rate means that your message is not getting through, and the dollars you’re spending on your email campaigns are largely going to waste. Aim for a delivery rate of at least 95 percent, and make sure your rate isn’t slipping over time. If you have problems with the delivery rate of just a single campaign, it could be that your content is being misinterpreted as spam and thus being blocked by ISPs or corporate firewalls. Your subject line may also cause a potential blockage – if so, learn from your mistake so that it doesn’t happen again.

List Growth Rate – get this number by subtracting hard bounces and opt-outs from the monthly number for new subscribers, divided by the original size of the list. A poor growth rate means you are not replenishing your email list with new names. Without replenishment, email lists eventually go sour as recipients change email addresses or drop out of your marketing program. An email list may see an annual churn rate approaching 25 percent, which means your list will be empty after four years unless you take countermeasures. You will constantly need to add new contacts to your email database, either through your own research or via purchased lists.

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Click-Through-Rate (CTR) – this is the percentage of email recipients who click on at least one of the links in your email message. (You do include links, don’t you?). Divide the number of clicks by the number of delivered emails to calculate the CTR. A high CTR indicates your message is on target and getting through. But you must interpret CTRs within the context of the type of email messages sent. Newsletters typically have higher CTRs than do promotional messages. Items like receipts often have the highest CTR. So keep your statistics organized by email type to avoid misleading comparisons.

Sharing/Forwarding Rate – this is the percentage of email recipients who click on the share/forward button within your email. These buttons give readers the opportunity to disseminate your email message to others. Only email with compelling content will motivate recipients to forward your email to others. Hot-topic emails that are shared with persons not in your recipient database extend the reach of your message and can lead to very successful campaigns. Monitor closely the sharing rate on each email to discover the types of content that produce the best results – this can help you plan your future email campaigns.

Conversion Rate – the proportion of recipients who click on an email link and then complete the desired action. Such actions include a product purchase or filling out a form. Conversion rates are a measure of effectiveness – the higher the rate, the greater the audience that is receptive to your offer. Of course, you need a good landing page and website design to facilitate the conversion process, so care must be taken when deciphering less-than-stellar results. If the problem lies with the landing page, improve its content and headline. Also, make sure your lead generation forms are easy to understand and use. Here’s a neat trick: integrate your email and website analytics by using unique URLs for each email link so that you can deduce where each click came from. This will help you figure out which campaigns produce the best conversion rates.

Revenue Per Sent Email – computed by dividing total revenue associated with an email campaign by the number of sent emails. This metric is ideal for businesses that generate direct sales from email campaigns. To calculate this number, you need to integrate data from your ESP and your web analytics platform. You already have this information if you have integrated your information collection for conversion rate tracking. Simply calculate the order value associated with each email click. Identify email campaigns that do not pay for themselves and analyze their weaknesses. Your future campaigns will benefit from this type of analysis.

Misleading Email Analytics

Let’s look at a couple of metrics that are, at best, unreliable indicators of the success of your email marketing campaigns:

Open Rate – the percentage of emails opened by recipients. The problem with this metric is that an email is only counted as “opened” if the recipient also receives embedded images. Unfortunately, many email users have automatic image blocking activated on their email client. So the open rate will often be under-reported. Another unreliable facet of this metric is that crafty marketers can fashion emails with catchy subject lines but disappointing substance. In this case, your open rate over-reports the success of your campaign. Because of these problems, it’s better to stick to click-through rate as a reliable measurement of campaign effectiveness.

Unsubscribe Rate – for every email recipient who chooses to opt out of your email list, any number simply stop looking at your emails without formally unsubscribing. Instead, use click-through rates and conversion rates to better gauge recipient engagement with your offering. You might find the unsubscribe rate useful when measuring overall growth rate of your email list, and as an indicator of a particularly successful campaign.