Email marketing – AKA EDMs – can be one of the most effective tools in your marketing toolkit when it comes to growing your customer base and boosting sales. But like any marketing strategy, tracking your performance over time and refining your approach accordingly are key to driving the best results from your efforts.
In other words, it doesn’t matter how beautifully designed or well-written your customer emails are – if you can’t measure their success, there’s no way to know whether they’re helping you reach your goals.
But how do you measure the success of an email marketing strategy? In this article, we’ll cover five of the most common metrics you can use to review your email marketing efforts.
1. Open rate.
This is the most basic way to gauge success: how many people are opening your emails? Although this won’t tell you whether an email recipient has taken a specific action – such as clicking on a link in your email – it will give you an idea of how engaging your emails are. This is especially useful for optimising your email subject lines.
How to calculate open rate: (Number of opened emails ÷ number of people the email was sent to) x 100
Example: (100 emails opened ÷ 1000 email recipients) x 100 = 10% open rate
Average open rates in Australia by industry and day.
2. Click-through rate.
The click-through rate is the percentage of people who clicked on one or more links in an email. This metric can help you gauge the effectiveness of the content and design of your emails. Comparing click-through rates on different emails can also help you better understand what your email recipients’ interests and motivations.
How to calculate it: (Total number of clicks ÷ number of emails sent) x 100
Example: (50 total clicks ÷ 1000 emails sent) x 100 = 5% open rate
Average click-through rates in Australia by industry and day.
3. Unsubscribe rate.
This is the rate at which your email recipients are unsubscribing on any given email, expressed as a percentage. A high unsubscribe rate is obviously not ideal and might suggest that your emails lack relevance to your audience, or that you’re sending emails too frequently.
How to calculate it: (Number of unsubscribes ÷ number of emails sent) x 100
Example: (5 unsubscribes ÷ 1000 emails sent) x 100 = 0.5% unsubscribe rate
Average unsubscribe rate in Australia by industry and day.
4. Conversion rate.
A conversion is the ultimate action you want email recipients to take after opening an email. For example, you might want recipients to click on a link within your email and fill in a form on your website, or buy a product.
The conversion rate is the percentage of email recipients who took that desired action, expressed as a percentage.
How to calculate it: (Number of people who completed the desired action ÷ number of emails delivered) x 100
Example: 50 people who completed the desired action ÷ 1000 emails sent x 100 = 5% conversion rate
Note: There are no hard-and-fast industry benchmarks for conversion rates, because a ‘conversion’ can be defined in many ways. It’s a good idea to set your own benchmarks once you begin to understand the norm for your business.
5. Overall ROI (return on investment).
This is a measure of the overall return on investment for your email marketing campaigns In other words, it’s the total revenue made divided by the total amount spent on an email campaign.
How to calculate it: There are several methods for calculating ROI, but one of the most basic formulas is as follows:
[(Amount of additional sales made – amount invested in the campaign) ÷ amount invested in the campaign] x 100
Example: $1,000 in additional sales – $200 invested in the campaign ÷ $200 invested in the campaign) x 100 = a 400% return on investment
Note: Like conversion rate, it’s a good to set your own benchmarks for ROI depending on how much you’re willing to spend on email marketing versus how much you expect to get in return.
The aim is to increase your overall ROI by optimising your email campaigns using insights gleaned from the metrics above.
Nailing your email marketing strategy.
Making email marketing work for your business has never been easier thanks to the range of sophisticated and user-friendly email marketing platforms out there.
Many services offer in-built reporting functionality, so you can track those all-important email marketing metrics quickly and easily. This is hugely beneficial for fine-tuning your email marketing strategy and driving better results over time.
Statistics source: Campaign Monitor
Build and track your email marketing campaigns with Yellow’s Pocket Office. Find out more here.