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As a small business owner, you want to leverage every email marketing opportunity for the maximum return. At the same time, you have to make sure you're tracking the performances of every email marketing e-commerce campaign you run so you can learn from them and allow them to inform your future efforts.
If you're already using email marketing -- or want to know if it would be worth your time and effort -- the nine key performance indicators (KPIs) below will provide you with actionable data you can use to increase your sales and brand awareness.
To the uninitiated, mass email marketing may seem like the digital equivalent of those direct mail pieces you regularly find -- and likely ignore -- in your snail mail box. The fundamental difference, though, is the granular-level data these email KPIs provide that can fine-tune your marketing efforts.
Email marketing KPIs range from open, bounce, and click-through rates all the way to revenue generated per email. These metrics will determine the relative success of individual emails sent to your subscriber list as well as the comparative success of all your campaigns.
It's critical to track these marketing metrics for your email campaigns because of the outsized impact emails can have on your business.
According to the 2019 Email Marketing Industry Census, email accounted for only 13% of companies' marketing spend, but it generated 19% of revenue. Related research also shows that each dollar spent on email marketing results in over $51 of revenue.
To effectively track and utilize email marketing KPIs, the first thing to identify is the primary purpose of each email you send. Is it lead acquisition? Brand awareness? Customer engagement? Direct revenue generation? Growing your subscriber list? Collecting additional customer data?
These things aren’t mutually exclusive, but knowing exactly what you want to accomplish will make the data you collect more directly applicable to your business strategy.
To facilitate your bulk email production and distribution, you should choose one of the best email marketing services, such as MailChimp or Campaign Monitor.
Using a third-party provider will allow you to easily track relevant KPIs, and you'll be able to access email marketing examples to give you different ideas as well as email marketing tips. Plus, their email automation features will let you send messages based on predefined triggers.
There are two types of metrics you should be tracking -- activity and objective -- and while both are important, you'll need to keep the distinction between the two in mind. Activity metrics measure actions taken by email recipients such as opens, click-throughs, complaints, and unsubscribes.
Objective metrics calculate the success of a campaign based on your identified goals, such as total revenue generated, revenue generated per email, revenue per order, and revenue per subscriber.
Ultimately, the most important KPI is your return on investment (ROI) based on the time, personnel, and cost required to maintain your email marketing efforts. Don’t lose sight of the forest because of the trees, though.
The data metrics are not an end unto themselves; they’re meant to provide actionable insights so you can generate more revenue. Keep that in mind, and your email marketing and list management will produce the best results possible.
No matter what types of communications you send out -- newsletter, abandoned shopping cart alert, one-off coupon, networking email, autoresponder welcome message, or something else -- using these email analytics will help you make the most of your small business email marketing.
The first most important metric is the open rate: the percentage of emails delivered that were subsequently read. If you had 900 emails successfully delivered, and 90 of them were opened, that would be an open rate of 10%.
While you'll want to track your own open rates, you should also compare your percentages to industry averages, which can range from 15% to around 29%.
Your click-through rate (CTR) is the number of times subscribers clicked on a link in an email as a percentage of total emails opened. After all, beyond just eyeballs on text, you want recipients to actively interact with your email.
As with other metrics, once you've established a baseline CTR from your initial email campaigns, you'll want to dig down to see what your customers are responding to most often.
Your unsubscribe rate will be the percentage of people who opt out of receiving future messages each time you send out an email campaign. Sometimes this is simply because your emails aren’t what recipients wanted or expected, but you can try to minimize this.
Much of the time, unsubscribes are related to your email format. Is it too long? Too text- or image-heavy? Is the call to action (CTA) unclear or poorly placed? To reduce your unsubscribe rates, list segmentation for A/B testing will be key.
Even more problematic than the unsubscribe rate is the complaint rate per campaign. In this context, complaints are recorded by a user marking an email as spam in their inbox. This generates a message sent to both the user's ISP and your email marketing provider that you spammed them.
It's critical to keep this metric as low as possible to prevent being blocked by your email marketing provider or having your IP address blacklisted.
Once an IP address is blacklisted, email providers will not deliver any emails from it. The industry standard for spam complaints is less than 0.02%, or roughly one complaint per 5,000 recipients.
Unlike the email metrics above -- which consist of relatively uniform data from campaign to campaign: open rates, unsubscribes, complaints -- each email you send has its own unique action you want recipients to take, and this is called the conversion.
This could be registering for an event, signing up for a demo, buying a product, or filling out a form.
You must have a clearly defined action you want your recipients to take. Ideally, you'll have one primary action for customers to perform; multiple ones will muddy your results.
The percentage of emails that were undeliverable is your bounce rate. For example, if you sent out 10,000 emails and 1,000 of them bounced, that would be a bounce rate of 10%.
A bounce rate above 10% is problematic because it can result in your email marketing service blocking your account so its IP address is not blacklisted.
Beyond calculating your bounce rate, you also need to identify the reasons emails were undeliverable. Then, you can make any necessary adjustments to keep your bounce rate as low as possible.
While forwards and shares aren't the same as conversions, they're important because they indicate that readers find value in your content. Plus, they extend the reach of your message via the implicit recommendation from the people distributing it through their social networks.
The email marketing reports from your email provider should include this data. If they don’t, you definitely need to switch to one that does provide this information.
As we noted above, ultimately, the success of every campaign is in the ROI: how much you spent versus how much you earned. Even if you know how to make a newsletter with the highest open rate and CTR, that doesn't matter if it's not directly generating revenue in the final analysis.
The ROI percentage is calculated by taking the money earned, dividing it by money spent, and multiplying that number by 100. There are, however, a couple of other related email KPIs to keep an eye on.
Finally, just as you'll have inevitable unsubscribes, you also want to track how your distribution list is growing over time. List growth rate is calculated by subtracting hard bounces and unsubscribes from the number of new email subscribers gained in a given month.
Your annual list churn rate -- the number of people who leave for one reason or another -- can be as high as 25%, which means healthy list growth is essential.
Using email marketing best practices will allow you to maximize your email campaign KPIs. And there's no better time than now to collect and analyze the pertinent data to best formulate and execute your email marketing strategy.
Our Small Business Expert
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