Email marketing can be powerful and far-reaching — more people use email than Facebook and Twitter combined — but you won’t get far if you’re going in blind.
Email marketing is like any other form of online marketing — you’ll only succeed if you optimize, and optimizing requires data. But which data should you track to learn the most about your campaigns?
The answer to that question depends on the goals of each of your email campaigns. If you’re optimizing an email meant to generate sales, you’ll look at different data than you would for an email meant to bring visitors to your blog. Keeping these goals in mind will eventually help you optimize more efficiently.
So where to begin?
In this post, I’ll review 6 key metrics to track in your email marketing campaigns. I’ll also explain how each metric can help to optimize emails with different goals.
Before Getting Started…
You can’t collect the data you’ll need until you create special tracking URLs through a Web analytics platform. I recommend Google Analytics, a powerful (and free) analytics tool.
In order to track traffic to your website from email campaigns, you’ll need to use the URL Builder to create special tracking URLs.
With these tracking URLs installed, you’ll see how email recipients react to your campaigns and interact with your website. Then you can really get your hands dirty.
Metric #1: Clickthrough Rate
Clickthrough rate, or CTR, is perhaps the most universally important metric worth tracking. Whether you’re promoting a sale or registering subscribers for a webinar, you’ll always want recipients to click on links or share buttons in your emails. Engaging email campaigns earn more clicks from recipients. If your CTR is unusually low, then you’ll know your messaging needs work.
To calculate CTR, divide your total clicks by the number of emails that reached their destination. Then multiply the answer by 100.
Don’t be surprised if your CTR seems low. A study by Hubspot.com found companies that send 16 to 30 emails per month see median clickthroughs of 6.5 percent (and that’s twice the CTR of companies that launch just one or two email campaigns per month).
Metric #2: Conversion Rate
If CTR measures engagement, then conversions measure effectiveness.
If the goal of your campaign is to entice people to complete an action — such as requesting a quote, downloading an e-book or making an online purchase — then anyone who follows through counts as a conversion. These actions can be tracked in Google Analytics by setting up Goals.
To calculate your conversion rate, divide the number of email recipients who completed their desired action by the total number of emails that reached their destination. Multiple the answer by 100.
Conversion rates will always be smaller than CTR. However, a strong CTR with a weak conversion rate usually means your offer or your landing page needs some TLC.
Metric 3: Email Sharing/Forwarding Rate
If the goal of your email campaign is to get people talking about your business, then you’ll want to pay close attention to your email sharing and forwarding rate. This is a measurement of how many people click on “forward” or “share” buttons embedded in your email. Shares and forwards can help raise awareness of blogs and social media profiles, and they’re great for organically advertising compelling services and sales.
To calculate this rate, divide the total number of clicks on share/forward buttons by the total number of emails you’ve delivered. Multiply the answer by 100.
Shares and forwards also usually bring new people to your email list. Also, this metric can help you understand which campaigns your customers find to be most compelling.
Metric #4: Bounce Rate
Are your emails reaching their intended targets? Although email marketing isn’t as engaging as social media marketing, it’s still powerful because emails reach their intended targets and have tremendous staying power.
Emails remain in inboxes until they’re deleted, creating opportunities for reengagement.
Unless, of course, those emails bounce, meaning they can’t be delivered to recipients’ inboxes. These can be “soft” bounces — temporary problems usually resulting from server problems — or they can be “hard” bounces from email addresses no longer being valid. Too many hard bounces can cause your ISP to flag you as a spammer, which can harm your marketing efforts. Delete invalid email addresses from your lists as soon as you’re made aware of them.
To calculate your bounce rate, divide the number of bounced emails by the total number of emails you’ve sent. Multiply the answer by 100.
Check your bounce rate if an email campaign surprisingly underperforms. You might find that a hardware issue, not a marketing issue, is impeding your efforts.
Metric #5: Growth Rate
Even with stellar CTRs and conversions, your efforts will eventually fizzle out if you’re not adding new emails to your list. That’s because your list will shrink over time as people get new email accounts, unsubscribe or flag your messages as spam. Your growth rate is the no-nonsense answer to whether you need to more urgently grow your list.
To calculate your growth rate, subtract the number of emails you’ve lost from your total new subscribers. Divide the answer by the total number of email addresses on your list, then multiply that answer by 100. Positive numbers are good; negative numbers, not so much.
Metric 6: ROI
Is your email marketing campaign profitable, or are you spinning your wheels? Calculating your ROI gives you the answer. You’ll definitely need to outfit your emails with analytics tracking URLs in order to learn your overall ROI.
To calculate this metric, divide the amount of money earned by your campaign by the money you’ve invested in your campaign. Multiply the answer by 100 to get your return on investment. Don’t expect all of your campaigns to be profitable right off the bat, especially if you don’t have a sizeable email list. But keeping track of your ROI will help you stay within your email marketing budget.
Email marketing is powerful and effective, but only if you know how to optimize. The six metrics reviewed in this article are a great start. Become proficient in monitoring these metrics, and you can rest easier knowing whether your campaigns are hitting their targets.
Want Help with Email Marketing?
Beginning next week, we’re hosting an in-depth email masterclass called Email Marketing Bootcamp.
When you attend, you’ll learn everything you need to know to generate more leads and sales with email marketing.
Plus you’ll get hands-on help with implementation, so you can increase your sales ASAP.