While it may seem like there is a new marketing channel available almost every day (I’m devising my smart fridge strategy as we speak), email marketing, when done right, is still one of the most profitable acquisition and lead retention channels available. To clarify, by “done right” I mean permission-based email marketing with content that is personalized, relevant, timely, and highly optimized. And if you don’t have a great email program like this already, then you’re leaving tremendous value on the table.
So how can you craft a slammin’ email channel to drive value to your stakeholders? The answer is actually quite mundane: you need to have the right set of metrics to analyze your email marketing channel and optimize it to stardom. This set of metrics is called your key performance indicators (KPIs) and should be very closely tied to your organization’s primary business goals. In fact, they will be a direct measure of how well you are achieving those goals.
Traditionally, email analytics has been hard because all of your demographic data, open rates, etc. resided in your email service provider (ESP) database, while all of your web traffic and conversion data was being tracked by your content management system (CMS) and/or Google Analytics. This was a problem because unifying your end-to-end data is really hard, not to mention time consuming. Nowadays, this problem is being solved by the adoption of marketing automation platforms that unify email and conversion data in an end-to-end fashion.
Now let’s talk data. When choosing KPIs that help measure your business goals, it is important that you follow these three rules: keep them very simple, produce them in a timely manner, and make sure they are useful. In other words, make it so that people can view your KPIs, quickly understand what they mean, and then take action on them immediately. This is critical because in today’s world we all need to act fast!
There are three categories of data you will analyze when it comes to optimizing your email marketing channel. When creating your KPIs, you need to always be thinking about these things:
Engagement is a category that encompasses email campaign metrics and reveals how your emails are resonating with your target list. It measures things such as: how many emails were sent, who you sent them to, and what the result was. Here are some great KPIs that help measure the business goal of driving deeper engagement within my list:
- Delivery rate: (# of emails – bounce backs)/ (# of emails) – measures the quality of your lead list.
- Open rate: (# opened/# emails delivered) – represents the success of your “from” field and subject line.
- Subscriber retention rate: (# subscribers – # bounces – # unsubscribes)/# subscribers) – measures how well you are targeting your database and if you are delighting them.
- Click to delivery rate: # of clicks/# of emails delivered – helps you understand the mailing list quality and email content relevance.
Behavior is a measure of what happens after the viewer clicks a link on the email. It answers: what do they do on my site, how well they engage, and do they buy? Here are some great KPIs to measure the business goals of deeper engagement on my website, elevated content consumption, and an increase in Sales Qualified Leads :
- Bounce rate: (# of clicks to the website with a single page view / # visits) – a great measure of the alignment between email and landing page.
- Depth of visit: (% of email campaign visits that last longer than xx pages) – especially important for non-ecommerce.
- Actions completed: (% of visits that took the call-to-action on the landing page)
Outcome is a measure of the goals, conversions, and revenue you drove through your email channel. Tracking all of these conversions and attributing it back to your email programs is critically important. Here is my list of outcome KPIs that measure the business goal of increasing total revenue:
- Macro conversion rate: (revenue producing conversions / visits) – How successful are you at targeting your audience with the right message at the right time.
- Avg. revenue per email sent: (total revenue / # of emails sent) – Use this to measure how clean your list is.
- Profitability: (rev generated – cost – cost of goods sold) / # emails sent) – the “Holy Grail” of KPIs
One last thing to note is that there is no one size fits all when it comes to email KPIs, you must be willing to experiment with your campaigns and how you analyze them and change your approach accordingly. Nor is it always possible to track all of these metrics all the time. I find that choosing one from each group may be sufficient. For example, if I wanted to keep it simple I would choose “click to delivery rate” for engagement, “bounce rate” for behavior, and “profitability” for outcome as my top three and go from there.
Metrics are critical for building success and identifying what works and what doesn’t. With the right ones in place, you can realize the full potential of your email channel.
What KPIs are you currently tracking for your email programs? Share them in the comments below!