Email Analytics: 6 Metrics That Impact Your Revenue

By now you’re probably already sending a lot of emails.

You might be getting some results, or you may not.

Consider the following: 

Have you ever stood on top of a hill and released a paper plane?

officer worker holding a paper plane in hand

It’s fun, right? If a little unpredictable.

Other than the wind, rain, and potential obstacles – all external factors – there are multiple reasons the plane flies the way it does; aerodynamics, structural integrity, the weight of the paper, angle and speed of release; the list goes on.

Fortunately, these are all things that you can control,  just like your hit-and-miss email marketing program.  

Think about it like this;

Visualize a less successful paper plane than the one you first imagined. See it released in front of you.

Notice the wind drag that slows this other, less optimized version down? It’s sinking, just like your rate of conversion; killing revenue.

Now, look at the turbulence the less successful model endures mid-flight. It might not make it. Would you open an email from these guys?

And finally, when it crashes out completely, that’s your entire email list, unsubscribed. Done, over. They won’t be coming back.  

You can’t afford it.

To avoid tragedy, you need to get ‘under the hood’ and fix a few things.

But where do you look?

email analytics under the hood

If email marketing is something you’ve relinquished control over, or simply ‘don’t know anything about’, you need to read on, because there are several key metrics (your new KPIs) that tell you whether it’s working or not.

Remember, email marketing is still one of the most effective and yet simplest forms of marketing.

email analytics graph showing all marketing channels with ROI

                                                                                            (Source: MarketingCharts.com)

According to Campaign Monitor’s 2016 Year in Review report,  return on investment (ROI) for email marketing was approximately $44 for every $1 spent. This is an incredible stat.

The same report puts conversion at 174% more frequent than those achieved through social media, and, according to a 2015 report by Marketing Sherpa 72% of 2,057 adults they surveyed, said they prefer to receive communication from companies via email.

Email remains an extremely powerful way of targeting customers in a direct and personalized way. As a marketer, you should be obsessed with the type of numbers listed above. Marketing without data is a silly game to play, and “this feels right”, shouldn’t be at the center of your strategy.

Neil Patel has written a great article on how to become a marketer obsessed with metrics here.

But what metrics should YOU focus on?

email cartoon with question mark

If you’re reading this, your focus should be on revenue – the most important metric of them all.

That means working backward and discovering which metrics most directly impact your ability to generate revenue, and working on those.

Be wary of getting too focused on what the experts call vanity’ metrics.

These are things like page views on your site, downloads, or raw subscribers. They might make you feel good, but they’re not important, and can be misleading, as we’ll learn.

In this article, we explain the six metrics of email marketing that we think most directly impact revenue.

As a performance benchmark for the first four of our six, Ciceron gives us an overview of industry averages in the below table:

email analytics benchmark of delivery rate, open rate, click rate and conversion rate

Let’s deal with them one at a time:

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1. Delivery Rate

Delivery rate is like a quick health check for your email list.

Delivery rate is like a quick health check for your email list

Otherwise known as ‘deliverability’, it should be the first thing you look at after sending any campaign.

How many of your beautifully crafted welcome emails actually made it to their intended destination?

A poor delivery rate would be anything south of 80%.

Aim for Cicero’s above average of 96%. Some providers will try to claim they can achieve 99.9%, but this is very unlikely.

If the number is low, however, there are a couple of things you should take a look at:

  •    Who are the people you are sending to and how did you find them? There could be a problem in your methods of acquisition here,  which means it might be time for an audit of your email.
  •    Are your messages being sent to spam because of a subject line, or other content? An errant piece of copy, oversized images, a poor piece of coding can send your emails directly to a spam folder.

bouncy ball

Note that delivery rate is directly related to bounce rate, which includes both hard and soft bounces. These are messages that haven’t quite made it for a couple of different reasons.

A hard bounce is the result of an invalid email address. These emails will never be successfully delivered and need to be removed from your email list immediately.

Repeat: These emails will never be successfully delivered and need to be removed from your email list immediately.

They’re also downright dangerous because they impact a sender’s reputation, so this becomes vitally important.

Too many of these and your company will start being labeled a spammer by most reputable ISP’s.

A soft bounce is a bit friendlier.

They’re the result of a temporary problem with the sender’s email address. It might be a full inbox or a problem with the recipient’s server.  Once the problem is rectified, these subscribers will receive your email.

A bounce rate of above 3% indicates problems. It could be the list as spoken about above, or how it’s being handled.

Remember to only send to people that have asked to hear from you. Campaign Monitor breaks down list-building into two main parts here.

Throwing more mud in the water on open rates are statistics like this one from HubSpot, who say that a large number of us (58 percent) manage separate ‘junk’ inboxes to handle less personal communication.

This is an account typically used entirely for commercial email messages, and are not someone’s ‘real’ email address; part of the reason you can’t get too carried away with a high open rate.

To build a better list, be sure to read our blog article ‘7 Ways To Build Your Email Marketing List’

2. Unique Open Rate

Like we just said, proceed with caution on open rates.

caution sign

If your content is valuable, your open rate should remain consistent. Cicero’s 31% is probably quite high, so don’t be discouraged if your numbers are closer to around 20%.

E-commerce operators should expect even less than that, as per MailChimp’s numbers provided in the table below:average email campaign stats by industry

We can see from the above that there are some important variations between industry. Pay attention to these numbers as you go about setting goals.

In other words, be realistic. You don’t  want to set yourself up for some unnecessary heartache.

At the same time, be aware of the following:

  •    Emails will not be considered ‘opened’ if embedded images are not fully loaded
  •    Some email clients, eg. Yahoo, automatically open emails, skewing your results.

For this reason, email open rates are valuable as a comparative figure.

Look at your results over a 3-6 month period and compare the two numbers. This will tell you more about how email program is performing than a snapshot over 1 or 2 weeks.

From here you can start analyzing what’s in your emails.

Consider these questions:

  •    Is the subject line enticing enough?
  •    Are you sending your emails at the right time of day?
  •    How many emails are you sending?

There are several keys to a good open rate, and the first is providing content that adds value.

Remember, if they’ve signed up from a reputable source, they WANT to hear from you. They’ve given you PERMISSION, so be sure to reward their decision.

Most providers will measure total opens and unique opens. If you send an email to 10 people and 5 of them open it twice, your total open rate will be 10, but your unique open rate remains 5.

The second statistic is more valuable, but if in doubt, refer to the below:

email open rate equation

Without complicating things, split testing is an important part of improving email open rates. Put your lab coat back on and start experimenting. As your list grows, this will become vital.

Here are some other basic tips:

  •    Get the sender name right
  •    Get the from email address right
  •    Get the subject line right (no spam-catchers )
  •    Optimize preheader text (the small text below the subject line)
  •    Personalize!
  •    Give your subscribers what they want (add value)
  •    Use double opt-in (this has been known to double open rates)

3. Click-through Rate (CTR)

Lots of experts rate this as the most important metric toward conversion because it’s really about engagement.

It’s the number of email recipients who click through on any given link contained in your email.

To calculate it simply add up the clicks and divide by the number of emails you sent. 100 clicks on 1,000 sent emails is a CTR of 10%, which would be double Cicero’s expected industry average.

Considered a ‘day-to-day’ marketing metric, CTR is commonly used to determine the results of split testing across any aspect of your email program.

The reason it’s considered so valuable is that your CTR number represents how many people are interacting with your content; a strong indication of intention to buy or convert, depending on the goals of your individual campaign.

handing touch a smart phone

Being mobile-unfriendly is one sure fire way to kill CTR.

Given the fact that 53% of emails are now opened on a mobile, and that 75% of people are likely to delete emails that aren’t easy to read on a mobile-device, this is more than just worth considering; it’s a must-do.

There are many resources that give advice on mobile-friendly design. In fact, we talk about in our article  ‘7 E-commerce Best Practices That Will Improve Conversions’

Here are some quick tips on mobile-friendly design from email marketing platform AWeber:

graph of tips on mobile friendly design

(Source: AWeber)

Another number to pay attention to is something called your “click-to-open rate”, or CTO.

Click-to-open rate refers to the number of people who opened your email and then also clicked in it.

If you’ve got a weak open rate, but a strong click-to-open rate, your email subject line might be a little weak.

Conversely, if you notice a high open rate with your emails but a low click-through or conversion rate, you should probably improve your copywriting.

4. Conversion Rate

 

dart bullseye of a hundred dollar bill

This really is the holy grail of metrics.

It’s how often your subscribers take action on your emails.

So far, if the email has arrived, it hasn’t bounced, they’ve opened it and then clicked through to your site, the email itself has done everything it can do.

Here’s a couple of things to consider once this has happened:

  •    Does the first landing page support the email content?  Think about what expectations you are setting for behavior.
  •    Is the landing page design fitting with your target audience? Remove any ‘turn-off’ factor which might repel the very people you’re looking to grab.

If everything else is in order, and your site is delivering on its promises as above, you’re in a position to convert.

Conversion can mean many things of course, including purchase.

buy button

To work it out, take the number of people who completed the desired action (downloaded content, signed up to a service, entered a competition), and then divide by the number of emails delivered.

If you’re achieving beyond 5% in this column, your business should be doing very well, especially if you have a large number of subscribers.

In essence, this metric is your goal-metric and should more or less drive your decision-making with regard the business.

If you are goal-oriented, conversion should be a number that you’re always trying to grow and used as a benchmark for performance.

Typically, it takes a long time for this number to get to a level where you might think it’ acceptable. Between 2-5% is usual depending on the actual call-to-action (CTA).

5. Unsubscribed

unsubscribe webpage of puma

If this happens, and you’re running an automated program triggered by behavior – like you should be – the above is a good example of how you should say farewell. (See our blog article ‘7 Trigger Emails You Should Be Using For Your E-commerce Store’ for more ideas around these types of emails)

In terms of a metric though, for a potential customer to unsubscribe, something’s already gone wrong.

Ask yourself:

  •   What have you been sending?
  •    Is the copy too long-winded?
  •    Is it adding any value?

Similar to open rate, however, experts warn of the misleading nature of unsubscribes.

It may lead newbies to think that if this number is small, the other 99.5% is fully engaged in what you’re sending out.

The truth is, especially when your content is poor and your offer is weak, most people just become unengaged subscribers, as witnessed by a fall in unique open rates and click-through.

Basically if for some reason more than 0.5% of your list unsubscribe after one campaign, you need to do some investigating.

Here are some reasons why people unsubscribe from your list according to emarketeer:

graph of reasons why people unsubscribe from email lists

(Source: emarketeer)

6. Earnings Per Click/ROI

roi sign

Again, this is something you need to monitor.

How much investment did you put into an email campaign and how much revenue did it ultimately earn you?

It can take a while to reap the rewards, as purchase or conversion can be delayed by multiple factors, (life gets busy) so set a timeframe to make these numbers useful.

If 10,000 emails which cost you $100 to send earned you an additional $1,000 in revenue in defined period, your ROI would be 900%, and you can start thinking about that boat.

Obviously, depending on your business, this number can be complex to figure out. Establish clear goals within your team, or for yourself, and do everything you can to achieve them.

Consider what types of leads you generated, and how this translated to actual revenue.

By looking at the metrics closely, you can uncover a rich vein of potential you might not be hitting at the moment, so get excited about this.

Know that simply by looking at all of these metrics you’re increasing the chances of your site converting.

Campaign Monitor presents a useful case-study here.

football in the goal

Earnings per click is a less common analytic, but extremely valuable, and something most providers will include. It’s really important to know what drives profit in your business and drilling down to this level can again be eye-opening.

Final Thoughts

Metrics are definable, measurable and actionable.

Don’t use them, and we think your business is doomed not to succeed.

If you effectively track the above 6 email metrics, you’ll be in a much stronger position to know what your email marketing efforts are doing for your bottom line.

We started this article by talking about revenue – the most important metric you have – and to improve that number you have to optimize what you send to your audience. This means monitoring the metrics we’ve just talked about.

Do it daily, do it weekly, do it monthly, but don’t think the occasional browse of these numbers will be enough. There is no “this feels right” in email marketing.

Also, remember that any sales success implies a strong, robust list, and if this is still a small number or built on shaky ground, you need to focus on growing this. It will equal revenue in the long term.

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The MageMail Team.

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