4.26 billion people are currently email users worldwide, a figure that is expected to rise to 4.73 billion by 2026.
Given this expansive audience, it’s unsurprising that businesses worldwide are tapping into email’s capabilities to communicate with their customers and share content.
However, in an environment where consumer preferences and digital platforms constantly change, relying on a “set and forget” approach will not suffice.
To truly harness the power of email marketing and ensure that your campaigns are reaching and engaging your audience, tracking the right marketing Key Performance Indicators (KPIs) is crucial.
By focusing on the best marketing KPIs, businesses can fine-tune their email campaigns to align with their audience’s needs and preferences, driving higher engagement, conversion rates, and ultimately, stronger customer relationships.
This blog article aims to guide you through the most critical email marketing KPIs you should monitor to elevate your campaigns from good to great.
What Are Email Marketing Key Performance Indicators (KPIs)?
A key performance indicator (KPI) is a measurable value that tracks performance over time towards a specific goal. It offers targets for teams to aim at, benchmarks to measure progress and valuable insights that enable individuals throughout the organisation to make more informed decisions.
Why Track Email Marketing KPIs?
Optimise Campaign Performance
Tracking email marketing KPIs lets marketers understand how their campaigns perform in real time. Marketers can identify what works and what doesn’t by analysing open, click-through and conversion rates.
This insight enables them to tweak their strategies for better engagement and effectiveness, ensuring that future campaigns are more tailored to their audience’s preferences and behaviours.
Enhance Customer Engagement
Understanding which types of content and subject lines drive the most engagement helps businesses tailor their communications to meet the interests and needs of their audience.
Marketers can create more relevant and compelling content by monitoring KPIs such as engagement rates and time spent reading emails.
This boosts customer engagement and strengthens the relationship between the brand and its customers, increasing loyalty and customer lifetime value.
Increase Return on Investment (ROI)
Email marketing is known for its high ROI, but to maximise this potential, tracking KPIs is crucial. Businesses can more accurately allocate their marketing budget towards the most profitable strategies by analysing emails that lead to conversions and sales.
This strategic allocation reduces waste on ineffective tactics and maximises the financial return from email marketing efforts, ensuring that every dollar spent contributes to the bottom line.
10 Email Marketing KPIs You Should Track For An Effective Email Marketing Strategy
1. Delivery Rate
The delivery rate, essentially the percentage of emails that successfully reach the recipients’ inboxes, is a crucial starting point for evaluating the effectiveness of your email campaigns. This metric is foundational because it directly impacts whether your audience even has the opportunity to engage with your content.
How To Calculate Delivery Rate
It’s calculated by subtracting the number of bounced emails from the total emails sent and then dividing that by the total number of emails sent.
Tips To Improve Delivery Rate
A list size of 10 or 1,000 contacts does not guarantee that all emails are delivered. Achieving a 100% deliverability rate is practically unattainable due to various factors, such as incorrect email addresses and lack of engagement from your recipients.
These might cause emails to bounce or be directed to spam folders.
Monitor For Any Unexpected Drops In Deliverability
An abrupt inability to deliver emails to recipients with specific domain addresses, such as Gmail, necessitates immediate investigation and remediation to resolve any underlying issues.
This could indicate issues like being blacklisted by Internet Service Providers (ISPs). This scenario is particularly concerning if you’re using a shared IP address, which might be affected by the actions of others sharing that IP.
Measure Inbox Placement Rate (IPR)
It’s also important to differentiate between emails that are merely ‘delivered’ and those that arrive in the inbox. Emails can be marked as delivered even if in the junk folder, which is far from ideal.
Therefore, many marketers are now turning to the Inbox Placement Rate (IPR) as a more accurate measure of email deliverability.
The IPR provides insights into the percentage of emails delivered and successfully landed in the inbox, offering a clearer view of the campaign’s potential effectiveness.
IPR is determined by dividing the number of emails in the primary inbox by the total number of emails sent, then multiplying this figure by 100 to convert it into a percentage.
2. Clickthrough Rate (CTR)
This measures the percentage of email recipients who clicked on one or more links in an email. It’s an essential indicator of how engaging your email content is. To improve CTR, craft compelling content and clear calls-to-action (CTAs).
How To Measure Your Email Campaign’s Clickthrough Rate
The calculation for CTR involves dividing the total or unique number of clicks by the number of emails successfully delivered and then multiplying the quotient by 100 to convert it into a percentage.
For instance, if a campaign involving 10,000 delivered emails results in 500 clicks, dividing 500 by 10,000 and multiplying by 100 yields a CTR of 5%.
Professionals might use either total or unique clicks for this calculation, choosing between the two depending on whether the aim is to gauge overall engagement or individual recipient response. Consistency in this selection is crucial for accurate tracking over time.
Tips To Improve Low Email Clickthrough Rates
The benchmark for a low or high clickthrough rate (CTR) can vary significantly depending on the industry, the nature of the email campaign and the target audience. Generally, an average CTR across industries might hover around 2-3%.
A CTR below this range might be considered low, indicating that the email content or call-to-action (CTA) might resonate poorly with the audience.
Conversely, a CTR above this average can be viewed as high, suggesting that the email effectively engages recipients and prompts them to take action.
If your CTR is on the lower end, here are two tips to help improve it:
Optimise Your Subject Lines
The subject line is often the first thing recipients see, significantly influencing whether they open the email. Crafting compelling, clear and intriguing subject lines can increase open rates and, by extension, CTR.
Testing various subject lines through A/B testing can help you identify which resonates best with your audience.
Personalise Your Emails
Personalisation can significantly boost engagement rates. Using the recipient’s name, segmenting your email list based on user behaviour or preferences, and tailoring the content to meet their interests make your emails feel more relevant to each recipient.
More relevant content increases the likelihood of recipients clicking through as the email speaks directly to their needs or interests.
3. Open Rate
The open rate is a critical Key Performance Indicator (KPI) in email marketing, signifying the percentage of recipients who open a given email. It serves as a primary measure of your audience’s initial engagement and interest in your message.
To calculate the open rate, divide the number of emails opened by the total number of emails delivered, then multiply by 100 to express the result as a percentage.
What To Do If You Have Low Open Rates
A low open rate can indicate challenges, such as unappealing subject lines, poor sender reputation, or inappropriate send times, suggesting your emails are not resonating with or reaching your intended audience effectively.
If your open rates are lower than expected, here are three strategies to enhance them:
Optimise Your Subject Lines
Your subject line is the first impression recipients have of your email. Make it compelling and relevant. For example, personalisation by including the recipient’s name or a specific reference to their interests can significantly increase open rates.
Segment Your Lists
Tailor your email content to different audience segments based on their preferences, behaviours, or demographic information.
For instance, send product recommendations based on past purchases or content relevant to their location. This personal touch can make emails more relevant and increase the likelihood of them being opened.
Test Send Times
Not all times are equal for sending emails. Use A/B testing to find the optimal time for your audience to open emails. For some, it might be early morning, while for others, it could be evening. Adjusting your send times based on these insights can lead to higher open rates.
NOTE: While tracking open rate provides insight into the initial engagement with your content, it can be a highly deceptive metric.
High open rates do not guarantee that the recipient read or acted upon the email’s content. It is imperative to consider other KPIs alongside the open rate for a more comprehensive assessment of your campaign’s effectiveness.
4. Conversion Rate
The conversion rate is a key performance indicator (KPI) at the heart of email marketing success. It measures the percentage of recipients who take a desired action after opening an email, such as purchasing, signing up for a service, or downloading a resource.
This KPI is vital because it directly reflects the effectiveness of your email marketing campaigns in driving tangible outcomes, making it an indispensable metric for assessing the ROI of your email marketing efforts.
Calculating Conversion Rate
To calculate the conversion rate, divide the number of recipients who completed the desired action by the total number of emails delivered and multiply the result by 100. This calculation gives you a percentage that represents how effectively your email has converted recipients into taking action.
Understanding Low Conversion Rates
A low conversion rate may indicate that your email content is not resonating with your audience or that the call-to-action (CTA) is not compelling enough. It could also suggest that the offer is not sufficiently appealing or that the audience targeting needs refinement. Identifying the root cause is essential for making adjustments to improve performance.
Strategies To Enhance Conversion Rates
Improving conversion rates requires creativity, personalisation and testing. Here are three strategies to consider:
Personalise Your Email Content
Tailoring your email content to meet the interests and needs of your audience can significantly boost engagement and conversions. Utilising data like past purchase history or browsing behaviour to customise the message can make your emails more relevant and appealing.
Optimise Your Call-to-Action
Ensuring your CTA is clear, visible and compelling can significantly affect conversion rates. Test different CTA designs, placements and messages to find the most effective combination that encourages recipients to take action.
A/B Test Your Emails
Regularly conducting A/B tests on various elements of your emails, from subject lines to email layouts and CTA buttons, allows you to refine your approach based on what resonates most with your audience.
Continuous testing and optimisation are crucial to discovering the most impactful email marketing ideas that drive conversions.
5. Hard And Soft Bounce Rate
Bounce rate is a critical metric in email marketing, indicating the percentage of emails that have not been successfully delivered to the recipient’s inbox.
A high rate of hard bounces can damage your reputation with Internet Service Providers (ISPs), potentially labelling your business as spam.
Therefore, closely monitoring your bounce rate and taking corrective actions for both hard and soft bounces is vital for maintaining effective communication with your audience and ensuring the success of your email marketing campaigns.
It’s calculated by dividing the number of bounced emails by the total emails sent and multiplying by 100.
This metric includes two categories: hard and soft bounces, each signifying different issues with email delivery.
Hard Bounces: Permanent Delivery Failures
Hard bounces occur due to permanent issues, such as invalid email addresses or accounts that no longer exist. For instance, these bounces might happen when an individual leaves a company, leading to deleting their email address or when an email address is mistyped upon entry.
Hard bounces are a critical reminder of the importance of maintaining a clean email list. Implementing verification processes, like double opt-in procedures, can significantly reduce hard bounces by ensuring the accuracy of email addresses upon signup.
It’s crucial to promptly remove hard-bounced addresses from your email list to preserve your sender reputation, as these addresses are essentially non-functional and negatively impact deliverability metrics.
Soft Bounces: Temporary Delivery Issues
In contrast, soft bounces are temporary and often arise from issues on the recipient’s end, such as a full inbox or a down server. Email marketing platforms typically attempt to resend the emails a finite number of times before marking them as soft bounces.
This type of bounce suggests that the email address is valid but encounters a temporary delivery obstacle. Monitoring soft bounces allows marketers to identify and possibly rectify issues related to email deliverability on the recipient’s end.
Tips to Improve Bounce Rate
Improving your email bounce rate enhances your email deliverability and improves your email marketing effectiveness.
Here are actionable tips for businesses looking to maintain a healthy bounce rate:
- Regularly Clean Your Email List: Periodic cleaning of your email list can significantly reduce bounce rates.
Remove inactive subscribers and addresses that have hard-bounced. For small business owners, this might mean reviewing your list every quarter to ensure emails are sent to engaged and valid users.
- Implement Double Opt-In: This process requires new subscribers to confirm their email address before being added to your email list.
It’s an effective way to ensure that the email addresses collected are accurate and that the subscribers are genuinely interested in your content.
For example, a small cafe could use double opt-in for their newsletter sign-ups, ensuring their weekly specials reach interested local patrons.
- Use a Reliable Email Verification Service: Before adding new addresses to your email list, use an email verification service to check their validity.
This step can prevent hard bounces by catching typos and fake email addresses at the point of entry.
- Personalise and Segment Your Emails: Sending relevant content to a segmented list increases engagement, which in turn can reduce bounce rates.
For instance, a small retail business might segment its email list based on purchase history and send targeted promotions that are more likely to be welcomed and less likely to bounce.
- Monitor Your Sender Reputation: Your sender reputation impacts email deliverability. Regularly check your domain and IP reputation using tools provided by email service providers.
If you notice a decline, investigate and address the potential causes of increased bounces.
6. Unsubscribe Rate
The unsubscribe rate is a crucial metric that measures the percentage of recipients who opt out of an email list after receiving an email. This KPI offers valuable insights into subscriber preferences and the overall health of an email marketing campaign.
The Significance of Unsubscribe Rate
While the unsubscribe rate may not directly reflect the effectiveness of an email marketing strategy, it is essential for assessing the list’s health and growth.
A high unsubscribe rate could indicate issues with the content’s relevance or the frequency of emails, signalling the need for a strategy reassessment.
Learning from Unsubscribe Rates
Although experiencing unsubscribes can be disappointing, they provide opportunities for learning and improvement.
For instance, analysing unsubscribe trends can help identify whether content adjustments or list segmentation strategies are needed.
A business targeting parents of young children might need to regularly update its list to maintain relevance as children grow older.
Monitoring Unsubscribe Rates for Red Flags
A sudden increase in unsubscribe rates, especially following specific emails or changes in campaign strategy, serves as a critical alert.
This could suggest issues with targeting, message frequency, or content relevance. By examining the details of campaigns that led to higher unsubscribes, marketers can identify and correct the underlying problems.
Calculating and Improving the Unsubscribe Rate
The unsubscribe rate is determined by dividing the number of unsubscribes by the number of delivered emails. To mitigate high unsubscribe rates, consider implementing strategies such as:
- List Segmentation: Tailoring emails to specific subscriber interests can significantly reduce unsubscribe rates.
By using CRM tools for email segmentation, marketers can ensure messages resonate more with their audience, fostering higher engagement and lower opt-out rates.
- Personalising Content: Customising emails based on subscriber behaviour or demographics can make the content more appealing, reducing the likelihood of unsubscribes.
- Adjusting Email Frequency: Finding the optimal balance in email frequency is key. Overwhelming subscribers with too many emails can lead to higher opt-out rates, while infrequent communication might lead to disengagement.
7. List Growth Rate
Focusing on click-through rates (CTR) and conversion rates is crucial. However, monitoring and aiming to increase your list growth rate is equally important.
This rate measures the speed at which your email list expands, highlighting the success of your strategies in attracting new subscribers while retaining existing ones.
Growing your list is essential for extending your reach, expanding your audience and establishing your brand as a thought leader in your industry.
Calculating List Growth Rate
The formula for calculating your list growth rate involves subtracting the number of unsubscribes and email or spam complaints from the number of new subscribers, then dividing this number by the total number of email addresses on your list, and multiplying by 100 to get a percentage.
For example, if you gain 500 new subscribers but lose 100 due to unsubscribes and complaints, with a total list size of 10,000, your growth rate would be 4%.
This simple calculation can provide significant insights into the health and effectiveness of your email marketing efforts.
Strategies For List Growth
Expanding your email list is essential for enhancing the reach and effectiveness of your email marketing campaigns.
To achieve substantial list growth, consider employing various strategies to attract new subscribers:
- Offer Incentives for Signing Up: Encourage new subscribers by offering them something of value in exchange for their email address. This could be a free ebook, a discount on their first purchase, or exclusive access to content.
Such incentives increase the perceived value of subscribing and kickstart the subscriber’s engagement with your brand.
- Use Multiple Channels to Promote Your Email List: Don’t limit your promotion to just one platform. Utilise your website, blog, social media profiles and even offline events to promote your email list.
Each channel offers a unique opportunity to connect with different audience segments and convey the benefits of subscribing to your list.
- Make the Sign-Up Process Straightforward: The easier it is to sign up for your email list, the more likely people will do it. Ensure the sign-up form is simple, requiring only essential information like an email address.
Consider placing the sign-up form prominently on your website and social media pages to maximise visibility.
8. Email Sharing/Forwarding Rate
This metric, often overlooked in the past, is now recognised as pivotal for generating new contacts and expanding reach beyond the existing email list.
It measures the percentage of recipients who take the initiative to share your email content with others, either by utilising a “share this” button for social networks or a “forward to a friend” function.
Paying close attention to your email sharing and forwarding rates can reveal what content resonates most with your audience, guiding future email marketing strategies.
Tracking which types of content or offers are shared the most provides valuable feedback for planning more effective email campaigns.
Integrating these insights into different types of email marketing strategies can enrich your approach, ensuring your content is relevant and engaging to your existing subscribers and appealing enough to be shared with a wider audience.
Calculating the Email Sharing/Forwarding Rate
The formula to determine this rate involves dividing the number of shares or forwards by the total number of delivered emails and multiplying by 100 to achieve a percentage.
For instance, if an email campaign results in 100 shares or forwards out of 10,000 delivered emails, the email sharing/forwarding rate would be 1%. This calculation offers insights into how engaging and shareable your email content is among your audience.
How to Encourage Email Sharing
To enhance the shareability of your emails, consider the following strategies:
- Encourage Sharing: Directly ask your readers to share or forward your emails if they find the content valuable. This simple call to action can significantly increase your email’s reach.
- Include Simple Share Buttons: Integrating clear and accessible share buttons within your emails makes it easy for recipients to share your content on social networks or forward it to friends.
- Produce Quality Material Suitable For Sharing: Create valuable content, such as insightful articles, exclusive offers, or engaging stories. High-quality content is more likely to be shared.
- Consider Providing Rewards: Offering incentives for sharing, like discounts or access to exclusive content, can motivate recipients to spread the word about your brand.
9. Spam Complaints
Spam complaints are a critical metric in email marketing, representing the percentage of recipients who mark an email as spam. This KPI is calculated by dividing the total number of spam complaints by the total number of delivered emails.
Monitoring spam complaints is essential as they have immediate and long-term impacts on an email marketing campaign’s effectiveness and, more crucially, the sender’s reputation.
The Impact of High Spam Complaint Rates
A high spam complaint rate can significantly impair email deliverability, with industry benchmarks generally staying below 0.01%. Exceeding this threshold indicates it’s time to reassess email content and build trust with your audience.
Maintaining a low rate is vital for preserving a strong sender reputation and ensuring the success of email campaigns.
Strategies to Mitigate Spam Complaints
To reduce the likelihood of your emails being marked as spam, consider the following strategies:
- Avoid Spam-Trigger Terms: Certain words or phrases in subject lines can trigger spam filters. Avoiding these terms to ensure your emails reach the inbox is crucial.
- Adjust Email Frequency: Sending too many emails can overwhelm recipients, increasing the chance of them marking emails as spam. Finding the right balance in email frequency can help mitigate this issue.
- Maintain A Clean Email List: Regularly cleansing your email list of unengaged subscribers and ensuring that your list-building practices are proactive and respectful can significantly reduce spam complaints.
- Monitor Trends: Observing trends in spam complaints and unsubscribe rates is crucial. An increase in both metrics could indicate underlying issues with your email strategy that need immediate attention.
Reducing Spam Complaint Rates
Ensuring emails are only sent to recipients who have explicitly opted in is the first step in reducing spam complaints. Communicating what type of content subscribers will receive and how often they will receive it can also help set the right expectations.
Moreover, delivering valuable and relevant content to your audience is essential for keeping engagement high and spam complaints low.
10. Overall ROI
The overall Return on Investment (ROI) for email campaigns is a critical metric that measures the profitability of your email marketing efforts. It compares the total revenue generated by your email campaigns against the actual spending on those campaigns.
It gives insight into the average revenue per user (ARPU) versus the customer acquisition cost (CAC), two crucial figures for any business. Understanding your email marketing ROI is vital because it directly impacts your company’s bottom line.
If your ROI is negative, it may indicate that your strategy needs revisiting. Conversely, a high ROI suggests your email marketing is effective, possibly warranting an increase in budget to capitalise on successful tactics.
The Basic Formula For Calculating ROI
To calculate the ROI of your email marketing, you can use the following formula: [(Revenue from additional sales minus the amount invested in the campaign) divided by the amount invested in the campaign] multiplied by 100.
For instance, if you make $1,000 in additional sales from an email campaign you invested $100 in, your ROI would be 900%. This calculation offers a clear picture of the financial success of your campaigns and assists in making informed decisions about future marketing strategies.
Strategies to Improve Email Marketing ROI
Improving your email marketing ROI involves optimising campaign strategies, understanding your audience deeply and efficiently managing your marketing budget. Here are some approaches:
- Segment Your List: Tailor your messages to different audience segments to increase relevance and engagement.
- Personalise Your Emails: Use data insights to personalise emails, making them more relevant to the recipient.
- Optimise for Conversion: Ensure your emails have clear calls-to-action and are optimised for conversions, leading to higher revenue generation.
Conclusion About KPIs For Email Marketing
Now that you know the 10 essential email marketing KPIs to track, it’s crucial to align these metrics with your specific email marketing campaign objective.
For example, suppose your objective is to increase customer loyalty and repeat purchases through your email marketing campaign. In this scenario, your primary focus might be KPIs like click-through rates (CTR) and conversion rates from emails promoting loyalty programs or exclusive offers for returning customers.
Tracking these KPIs will provide insights into how effectively your emails engage existing customers and encourage them to make additional purchases.
By aligning your KPI tracking with this objective, you can tailor your content to better meet the needs and preferences of your customer base, ultimately driving higher loyalty and repeat business.
The success of your email marketing hinges not just on sending emails but on a strategic approach to measurement and improvement.
Each KPI, from delivery and open rates to conversion rates and overall ROI, serves as a lens through which the effectiveness of your campaigns can be evaluated.
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Frequently Asked Questions About KPIs For Email Marketing
How Often Should I Review And Analyse My Email Marketing KPIs?
Reviewing and analysing your email marketing KPIs should be a regular marketing routine. The frequency can depend on the volume of your email campaigns and the specific objectives you’re tracking.
Monthly reviews are common for a broad overview, but weekly checks might be necessary for active campaigns to make timely adjustments.
How Do I Measure The Success Of An Email Re-Engagement Campaign Through KPIs?
Measuring the success of an email re-engagement campaign involves looking at specific KPIs such as the open rate, click-through rate and conversion rate. An increase in these metrics, especially compared to past performance, can signal a successful re-engagement effort.
What Are The Benefits Of Hiring A Digital Marketing Agency In Singapore To Grow My Business?
The benefits of hiring a digital marketing agency include strategic planning tailored to your business goals, access to a suite of digital marketing tools and analytics for optimised performance, and the ability to tap into diverse channels—from social media to SEO and PPC campaigns—for holistic business growth.
What Are The Best Email Marketing Tools For Tracking KPIs?
For effective KPI tracking in email marketing, several tools stand out for their robust analytics, user-friendly interfaces, and comprehensive features. The best email marketing tools for tracking popular KPIs include Mailchimp and HubSpot.
