Digital businesses are using email marketing to strengthen their relationships with customers. This digital marketing tactic enables you to engage with new and existing clients by sending them promotional content directly to their inbox.
But, are your email campaigns effective enough to help you turn prospects into customers?
If you are unsure how to respond to this question, you likely need a better, more objective approach to measure the success of your digital marketing tools. No matter how optimized your emails are, you need to see the results of your efforts and determine if your marketing strategy is helping you achieve your goals.
You could be seeking to generate more leads, increase your subscriber database, or even convert your leads into customers. By tracking and evaluating the performance of your email marketing campaigns, you get to know your audience, build on what works, discard what doesn’t, and develop a better and effective strategy.
To achieve your marketing goals, you should consider using more than one metric to understand better how your email marketing strategy is performing.
In this article, we will show you the benefits of email marketing, how to design a measurement plan, and the top 8 tested ways to measure the success of your email campaigns.
What are the advantages of email marketing?
Statistics by Data and Marketing Association show that 73% of customers prefer to receive marketing materials via email over other online channels. Other reports indicate this figure is as high as 77%. Indeed, up to 80% of marketers and business professionals consider email a crucial element of marketing success and customer retention.
When used well, email marketing campaigns can deliver the highest return on investment (ROI) for your business. As of 2019, this channel achieved $52 for every dollar spent.
Additionally, a well executed email marketing campaign will achieve the following benefits:
- Improved sales
- Increased customer loyalty
- Lead generation
- A consistent flow of customers
- Operational efficiency, reducing the costs of acquiring new customers.
Once you schedule and dispatch email marketing pieces, you need to have a strategy for measuring the impact and results to inform your decision-making.
You can start by developing a plan for measuring the performance of your email marketing.
How to design a measurement plan
You can design an effective and easy-to-use measurement plan in 3 steps:
1. Select a suitable timing
While it is essential to continuously monitor the performance of your email campaigns, you should still create a tracking schedule.
For instance, you can monitor the progress weekly, monthly, or per campaign. The objective is to spot how your email campaigns are performing against benchmarks and prior period’s performance. This tactic will enable you to identify patterns of progress or decline per campaign, customer segment, or product type.
2. Set goals and objectives
Ensure your performance tracking aligns with your sales and marketing targets. You can start by setting clear, measurable goals and objectives.
For instance, your goal may be to convert 30% of the leads generated in the past 30 days.
You should also assess how measurable your objectives are and what tools you will need to measure them.
3. Analyze your email campaign results
Once you set your goals and objectives and have already determined the timing and measurement tools, you should now assess the success of your email campaigns.
This step entails measuring and interpreting data to understand what drives most of your subscribers to click your links. You will see the number of clicks per campaign, including those with links and imagery, and determine which strategy is deriving the best results.
By analyzing the traits and behavior of your audience, you will be in a better position to understand their needs and interests and implement more engaging and relatable content for improved conversions.
Once you understand how to measure and analyze results from your email marketing campaigns, you should now establish the right key performance indicators (KPIs) for your business.
How to measure the success of your email campaigns
KPIs are metrics showing how your email marketing pieces are performing.
For instance, you can measure the rate at which your emails are received, clicked, opened, etc. You can then obtain a report summarizing the performance of your emails over time, compared with other email campaigns, and against industry email marketing figures.
Let’s have a look at the best measures to consider:
1. Delivery rate
This metric is one of the leading email marketing KPIs, enabling marketers to keep track of the strength of their email list.
Email delivery rate is obtained as:
(No. of emails sent – bounces) / No. of emails sent * 100
A high delivery rate, about 95%, is a sign that you have a healthy subscription list. In comparison, a low delivery rate (bounce rate of 3% and above) indicates the inability to reach your target audience.
One of the best approaches to expand your email list is by placing the email sign up button on the front page of your site. You should also add a double opt-in functionality to your subscriber list to increase the chances of getting valid leads.
To reduce the possibility of your email campaigns being filtered as spam and improve deliverability rate, consider implementing tactics like displaying the unsubscribe link, avoiding email spoofing, and asking your clients to white-list you, among others.
Deliverability is one of the leading metrics for measuring the success of your email campaigns because it confirms you are indeed reaching your audience.
2. Open rate
Variables for A/B testing the factors affecting your campaigns’ open rate
The open rate is measured by the level of your email recipients who receive your email campaigns and open them.
It is measured as:
No. of emails opened / No. of emails delivered * 100
You should check that your platform does not count re-opens as initial opens because you would be recording a lower open rate than your data indicates.
To understand what compels your subscribers to open your emails, consider A/B testing various subject lines. In Encharge you can achieve this by enabling the A/B testing feature when sending a new broadcast. Simply add a new variation and change the subject line.
For instance, you can A/B test your campaign ideas to determine the day of the week with the best open rates, if a subject line with a teaser or incentive works better, or the impact of the company name on engagement.
You can also measure the success of your email campaigns by analyzing how open rates for one period, like the current week, compared to those sent the previous week to the same subscriber lists.
Further reading: Resending Emails for Better Results: How to Do It Righ
3. Clickthrough rate
The clickthrough rate (CTR) is the level of email recipients who click on your email campaign link or links.
It is calculated as follows:
No. of clicks/unique clicks/ No. of emails delivered * 100
Therefore, if you had 1,000 emails delivered and 500 of them were clicked, your email campaign’s clickthrough rate would be 50%.
This tactic enables marketers to measure the performance of every marketing email sent and changes over time.
It tells you how many prospects on your email list are responding to your continent and who would be interested in learning more about your offers or brand.
On average, businesses that send 5-10 monthly campaigns record 2X as high CTR as those sending 2 or fewer campaigns per month. These figures indicate that you should send a moderate number of email campaigns to derive the highest success. You should minimize the risk of being spammed for overwhelming your recipients with 30+ email campaigns or missing out on sales for sending too few emails.
The CTR is also helpful when you are conducting an A/B testing campaign because it helps you track the products and offers your clients engage with most, leading to a better understanding of their preferences.
4. Conversion rate
This metric shows the level of email recipients who opened your email campaign and clicked on a link within it to complete the desired action, which could be buying your product or subscribing to a service.
You can calculate the conversion rate as follows:
No. of people who took the desired action / No. of total emails delivered * 100
If, for instance, 200 out of 1,000 email recipients bought your product or filled out a lead generation form, your conversion rate would be 20%.
The conversion rate is an essential measure of the success of your email campaigns because it shows the level to which you’re achieving your goals. If your goal was to market and get people to sign up for an online event, and your recipients took action by registering, you would consider this action a conversion.
If your target is lead generation, the conversion rate shows you how effectively your call-to-action buttons and newsletters generate valid leads and prospects.
Remember, the financial success of your email marketing can be measured from both direct and delayed purchases. Therefore, a customer who learns about your offer via email marketing but fails to take action immediately is still considered a conversion if they eventually visit your site from a direct link or organic search.
Still, the type of email (newsletter, order follow-up, inactive customers, or abandoned cart) will determine the results of your campaign. The performance of the different types of email campaigns will inform your decision-making on the volume or frequency of marketing emails to send per month.
The best way to measure the conversion rate is by integrating your emailing tool with your web analytics. You can develop unique tracking URLs connected to your email links to identify the email campaign generating a given stream of clicks.
Thanks to the Encharge integration with Google Analytics, you can track the conversion rate of your email campaigns using UTM tags in your links.
5. Bounce rate
Bounce rate shows the level of total emails dispatched but not delivered to the recipient inbox.
You can calculate it as follows:
No. of bounces / no. of sent emails * 100
If, for instance, you sent 1,000 emails in 1 month, but 50 bounced, your bounce rate would be 5%, which is still above the desirable 3%.
When considering what action to take about the bounced emails, take note of the “hard” and “soft” bounces.
Soft bounces arise when the recipient’s email address is valid but has a temporary problem, such as a full inbox or an issue with the server. In such instances, the recipient’s server may hold and deliver the emails later, or you may resend your email campaigns later.
On the other hand, hard bounces arise when the recipient’s email address is non-existent, invalid, or closed, indicating that your marketing emails will never be delivered. You should delete such contacts from your email list to reduce the negative impact on your delivery rate.
While the bounce rate is not linked to your marketing goals directly, it still affects the success of your email campaigns as it implies there are problems with your emails.
You should minimize the hard bounces and keep your delivery rate at about 98% to avoid being flagged as a spammer by internet service providers (ISPs). A low bounce rate earns the sender a good reputation.
6. Forward/share rate
This metric shows the level of email recipients who clicked on your email campaigns’ “share” button to post your content on social media platforms. It also shows the number of recipients who clicked on a “forward to a friend” icon.
You can calculate the forward/share rate as follows:
No. of clicks on a forward/share button / no. of emails delivered * 100
How does the forward/share rate help in measuring the success of your email campaigns?
This measure may not be as crucial as the others mentioned earlier, but it helps you grow your contact and subscriber list over time. You can assess the performance of different types of email campaigns to determine which ones get shared or forwarded the most.
If your existing leads share and forward your emails, it indicates that your content has a positive impact. You should encourage the recipients of your email campaigns to share your content as this action earns your business brand visibility. It is also a cost-effective way of generating more leads.
7. Return on investment (ROI)
The ROI for your email campaigns is measured by the level of revenue earned versus the total spend.
You can calculate the ROI as follows:
Total sales from the campaign – Total campaign spend / Total campaign spend * 100
OR
Profit – Cost / Cost * 100
For instance, if you made $10,000 from an email campaign after investing $4,000, your ROI would be 150%. The costs incurred in your campaign should include both monetary and labor (marketers’ time spent on email marketing). You can convert the non-monetary measures like time using hourly rates.
On average, you can earn up to $38 from every $1 spent on email marketing campaigns.
The return on investment shows how cost-effective your email campaigns are. You can set up different ROI targets for different leads depending on your goals.
8. Unsubscribe rate
This metric implies the number of people who have opted out of your subscriber list. It is not practical to have a zero percent unsubscribe rate, but you should analyze your data to determine if you are sending valuable content.
The unsubscribe rate is a measure of the health of your email list. According to Campaign Monitor, you should keep this rate at 0.5%, maximum. You should also implement strategies to grow your subscriber list at a higher rate.
This measure shows how relevant or necessary your content is to your email campaign recipients. You can achieve better results if you segment your audience and create personalized campaigns that appeal to their needs rather than sending random emails to all subscribers.
Encharge has the most powerful segmentation on the market allowing you to segment your audience based on website activity, page visits, email engagement, fields, tags, and more.
To combat subscriber fatigue and gain success from your email campaigns, create personalized marketing emails. You should also keep revamping your content to make it valuable to your audience.
Conclusion
Email marketing is an essential way of engaging with new and existing clients. It entails sending your prospects’ promotional content directly to their inbox. Being the most preferred online marketing channel by customers, businesses are continuously leveraging email campaigns for improved sales, increased customer loyalty, lead generation, and operational efficiency.
When executing email campaigns, you should select a suitable timing, set marketing goals and objectives, and analyze your results to inform your next course of action.
You can measure the success of your email campaigns using multiple metrics, including the delivery rate, open rate, clickthrough rate, bounce rate, and return on investment (ROI), among others. Keep in mind that the unsubscribe rate is equally essential in determining the relevance and value of your content to your subscribers.
