Plans to measure, evaluate, and analyze should be woven into a campaign from the very beginning. And at every stage, marketers need to think about measurability. The first step? Learn which metrics which will be most useful as key performance indicators (KPIs), how to draw the best insights from measurements, and how to evaluate ongoing performance.
Create a measurement plan in 3 steps
1. Choose your timing. You should track email performance on an ongoing basis. But before setting KPIs, it’s a good idea to establish a tracking schedule—whether that’s weekly, monthly, or campaign by campaign. At any rate, you can check progress against benchmarks and previous performance, which makes it easy to spot patterns of improvement or decline. These can then be marked against a specific type of email campaign, a particular customer segment, product type, or external factors which could be impacting upon the campaign’s performance.
2. Outline your goals and objectives. Performance tracking has to be relevant to the campaign goals and objectives. At a very early stage of strategizing, it’s important to establish clear goals and objectives. When defining these, think hard about how measurable they are and how that measuring can be done.
3. See what’s working (and what’s not). Analysis can also shed light on the type of content that is engaging your subscribers by analyzing the links or imagery that have driven the most clicks. By analyzing your audience’s behavior, you’re able to learn more about them, like what interests them or which content isn’t effective in driving any action or engagement.
Find the right email marketing KPIs for your business
Email KPIs are metrics that help you understand how your campaigns perform. When you use a marketing platform to send emails, it tracks the rate at which your emails are received, opened, clicked, and more. This data is summarized in reports that show how your emails perform over time, in comparison to each other, and against industry standards.
To get the most out of your reports and create a measurement plan, it’s important to know what each KPI means, and which KPIs are most meaningful for your business.
- Open rate compares the number of emails opened by recipients against the total number of emails delivered. (Take note if your platform counts re-opens as initial opens. If so, the true open rate is likely to be slightly lower than the data indicates.) A/B testing different subject lines can provide you with more insight into what compels your subscribers to open your emails and what doesn’t. Similar data—like how many times the campaign was opened by recipients who were forwarded the campaign, when the email was last opened, and which subscribed contacts opened the campaign the most—can also help you assess engagement.
- Click rate provides the percentage of total recipients who clicked any tracked link in the campaign. When a contact clicks on a link, it indicates that they are interested in the content, so it’s a useful metric for measuring engagement, as well as to optimize with A/B testing. It’s also helpful to track which contacts click on a link, the number of clicks per link, the number of clicks for each unique open, the most time someone clicked a link, and the most clicked link in your campaign.
- Bounces occur when an email is rejected by an email server. This data is useful for keeping your audience organized and for tracking deliverability. A low bounce rate contributes to a good sender reputation. A high bounce rate means that content is going undelivered (and unseen), which lowers your sender reputation. There are 2 types of bounces—a hard bounce or a soft bounce. A hard bounce means the email couldn’t be delivered for a permanent reason, like the email address doesn’t exist. A soft bounce indicates a temporary reason, like an inbox that’s full.
- Unsubscribes indicate the people who have opted out of your audience. Although there will always be people who choose to unsubscribe, assessing data gives you a sense of whether or not you’re sending content that’s valuable to your audience. People unsubscribe from marketing emails for lots of different reasons, but peaks in unsubscribe rates could indicate issues which need to be addressed. This is also an important metric to measure when monitoring your deliverability.
- Device statistics tell you which devices your audience uses to read your emails, and that data is very useful. Different devices display content in different ways, so it’s important to optimize for the most likely device when designing content. If certain devices can be broadly matched to certain segments, this could potentially make a huge difference to the way in which these segments experience the content they’re sent. For example, if younger demographics are more likely to open emails on a smartphone, content for this segment should be designed with smartphones in mind.
- Spam score measures the rate at which contacts mark your emails as spam. A high spam score shows that your audience doesn’t find value in what you send them. This sends a signal to the internet service providers (ISPs) that they are not interested in hearing from your brand anymore. This can start to impact your sender reputation, which impacts deliverability.
See how your emails impact your business overall
Understanding the impact of email campaigns on your marketing KPIs involves more data, but it’s important to measure. There are a few go-to marketing KPIs that can show how your emails contribute to your overall objectives.
- Conversion rate measures the percentage of your audience that takes the action you want them to. For example, if the goal of your email is to get people to sign up for an event online, the conversion rate measures the number of people who do so as a percentage of those who received your email. Establishing a clear conversion rate is an important metric for evaluating the overall success of your email marketing activities.
- Return on investment (ROI) measures how cost-effective an email campaign is. The mathematical formula is: (profit minus cost) / cost. If you made $10,000 from a $1,000 effort, your return on investment (ROI) would be 0.9, or 90%. On average, email is the digital marketing channel with the highest ROI at £42 for every £1 spent in 2019. If profit is part of a campaign’s aim, calculating ROI is highly relevant.
- Customer lifetime value (CLV) indicates how much money a customer is predicted to spend with your business for the duration of your relationship with that individual. The calculation is based on their average purchase value, the average frequency that they purchase from you, their average customer value, and your business’s customer lifespan. This is a very important metric that acknowledges the worth of retaining contacts in your audience.
- Cost per acquisition (CPA) is how much you spend to gain a new customer. For email marketing campaigns, you can find this number with this formula: total campaign cost / conversions (paying customers) = CPA. This also indicates how successful your campaign was.
Turning measurements into action
Of course, the most accurate measurements in the world are useless if they’re not used to guide change. The real skill with evaluation is drawing insights from the metrics and applying them in valuable ways. For example, a high click rate on smartphones but not on desktops may demonstrate that emails aren’t as well optimized as they could be for desktop users. That’s easy to rectify, but it requires some human understanding to make the initial intuitive leap.
A good email marketing platform will gather and report important metrics. But the real trick is to apply the human touch to those graphs and figures. When the measurements show a dip in engagement, look at the relevant data, compare them with any relevant context, and figure out what’s causing the problem. Then use creative tactics to steer the campaign back on track.
The more you can measure your success, the better their campaigns will be both on a short and long-term basis.