Email Marketing Metrics: What Should You Be Tracking?
November 20, 2019
A lot goes into creating, running and managing an effective email marketing strategy. There are subscriber lists to build and segment, drip campaigns to build out, content to create and countless other little things to take care of.
But how do you know if all of that work is actually paying off?
This is where your email marketing metrics come into play. Your metrics tell you all kinds of important things about your audience, your campaigns and how the two interact.
However, to effectively assess your email marketing, it’s important to pay attention to the right metrics. There are a lot of email marketing metrics out there, and they aren’t all created equal. Focus on the wrong ones and you can end up optimizing your email strategy for results that don’t really matter to your business.
Focus on the right metrics, though, and you’re on the road to success. To help you sort through all of the data in your email marketing tool, we’ve created a list of the most important metrics we watch and the reasons why these metrics are so important. Sound like a plan? Let’s get started!
Understanding Your Goals
To really understand your email marketing metrics and what they mean for your business, you have to understand what the goal of your email marketing is.
Unfortunately, many businesses use email marketing because, well, that’s just what you’re supposed to do! They have an email list, so why not use it?
That’s not an altogether bad thing, but unfortunately, when you don’t know what your goals are, it’s hard to measure your progress towards achieving them. Simply sending out a weekly newsletter is little more than wasted effort if there’s no end goal for all of that work.
So, before we start actually talking about email marketing metrics, ask yourself, What am I trying to achieve? There are a lot of potential answers to that question, but the specific answer for your business will help you prioritize which metrics you pay attention to.
Here are a few potential goals for email marketing:
- Help people become more familiar with your business, your brand and/or what you’re selling
- Get people to visit your website
- Drive leads
- Turn leads into actual clients
- Convince people who abandoned their cart to come back and make a purchase
- Get repeat business from your customers
- Decrease client turnover
For example, if your goal is to get people to visit your website, your clickthrough rate and time on site metrics will be some of the most important metrics to follow. However, if your goal is to drive leads or get repeat sales from existing customers, your top metrics will be more conversion-related.
6 Key Email Marketing Metrics
Now that you’ve taken a minute to clarify what the goal of your email marketing is, let’s take a look at 6 of the most important email marketing metrics you should be following in your email marketing account.
1. Clickthrough Rate
Ask almost any email marketer which metrics they follow and clickthrough rate (CTR) will probably be on their shortlist. And it makes sense, almost any email marketing goal starts with getting people to click on links in your emails. If people aren’t clicking on the links in your emails, they probably aren’t doing anything else you want them to, either.
Calculating your clickthrough rate is pretty easy. Basically, you just divide the total number of clicks your email(s) got and divide it by the total number of delivered emails:
CTR = [# of clicks / # of delivered emails] * 100%
Most email marketing platforms will report this metric for every email, but if you want aggregate data across multiple emails, campaigns or drips, you sometimes need to calculate your clickthrough rate yourself, which is why we’ve included the formula here.
Clickthrough rate is great for determining how interesting and compelling your email content is. Essentially, it tells you whether or not your subscribers actually resonate with the messaging in your email. If your clickthrough rate is low, you’re probably missing the mark. If it’s high, people must like what you’re telling them.
2. Conversion Rate
Clickthrough rate tells you whether or not people are responding to the messaging of your emails, but it doesn’t tell you whether or not your email marketing is actually getting people to act. I mean, you can send out an email offering with a link to the world’s cutest cat video and get a lot of clicks, but it won’t do a whole lot of good for your business.
Conversion rate measures how effective your emails are at getting people to do something that benefits your business in some way. That could be filling out a lead form, making a purchase, chatting with your business online, eBook downloads or any other action that you want people to take.
To calculate the conversion rate of your email marketing, simply divide the number of conversions you got (how many times your desired action was completed) by the number of emails you sent out.
Conversion rate = [# of conversions / # of delivered emails] * 100%
Depending on how you have set up your email marketing platform, you may be able to see this number directly in your email marketing report, or you may have to calculate this number manually. If you—like many businesses—are in the latter category, you’ll want to make sure to add UTM parameters to the links in your emails and use those UTM parameters to associate your conversions with the appropriate email.
As an email marketing metric, your conversion rate is great for telling you about how effective your email marketing is at moving people through your funnel. You can’t expect everyone to convert on your first email, but if people aren’t converting over time, they probably aren’t progressing towards becoming paying customers.
3. Email Sharing/Forwarding Rate
What’s the true test of email engagement? How often people share your emails with others. When someone forwards your email to someone else, they’re taking personal responsibility for your content. In essence, it’s their way of saying, “the content in this email is so good that I thought other people should see it, too.”
No matter how good your marketing is, nothing competes with the effectiveness of word of mouth, so your email sharing/forwarding rate is a key email marketing metric to watch.
The higher your sharing/forwarding rate is, the better your results will be. After all, with a high sharing/forwarding rate, your emails are so good that they’re reaching beyond your subscriber list.
Most email marketing platforms will report on clicks on a share button and/or email forwards, so to calculate your email sharing/forwarding rate, all you have to do is divide those clicks by the total number of delivered emails.
Email sharing/forwarding rate = [# emails shares or forwards / # of delivered emails] * 100%
This email marketing metric is particularly important to watch whenever you run a deal, discount or promotion. It tells you just how valuable people think that your deal is. If a lot of people are sharing your promotion with their friends and family, they must be pretty excited about it. That’s valuable information for your business, both now and for future emails.
4. Bounce Rate
Clickthrough rate, conversion rate and email sharing/forwarding rate tell you a lot about how effective your emails are. Our next two email marketing metrics—bounce rate and list growth rate—tell you about how healthy your email subscriber list is.
To calculate your bounce rate, all you have to do is divide your total number of bounces by the number of emails you’ve sent.
Bounce rate = [# of bounced emails / # of delivered emails] * 100%
With bounce rate, there are actually two different kinds of bounces that you’ll want to pay attention to.
“Soft” bounces happen when there’s some sort of problem on the receiving end of a valid email—such as a server problem or a full inbox. These sorts of problems usually resolve themselves, or they can often be resolved by resending your email.
“Hard” bounces, on the other hard, occur when you try to send an email to an invalid address. Sometimes, people misspell their email address, abandon an email account or deliberately give you a false email address. Or, heaven forbid, you purchased a list of email addresses (this is actually illegal, but it definitely happens) and many of them are fake or abandoned.
Internet service providers (ISPs) use bounce rates to determine the reputation of your business, so if you get a hard bounce on an email address, you should remove that email from your list. It can only hurt you. Some email marketing platforms will automatically do this for you, but if yours doesn’t, it’s definitely something that you need to stay on top of.
Hard or soft, bounced emails tell you a lot about the health of your email marketing list. If you have a high bounce rate, there’s something wrong with your list. It might be too old, a purchased list (but you wouldn’t do that, right?) or you might be building your list in a way that encourages people to give you faulty information. Regardless of the reason, though, it’s something you’ll want to address—and fast!
5. List Growth Rate
On the flip side of bounce rate, you have your list growth rate. On average, email marketing databases degrade by 22.5% a year, so if you’re not actively growing your list…it’s probably shrinking.
To calculate your list growth rate, you’ll need to define a time window and see how many new subscribers you gained during that time window. Subtract the number of people who unsubscribed from your list or flagged you as a spammer and any hard bounce emails from that number and divide the difference by the total number of email addresses in your list.
List growth rate = [# of new subscribers – # of unsubscribes/spam complaints/hard bounces] / total # of email addresses
Bounce rate tells you whether or not your email list is valid. List growth rate tells you whether or not your efforts to gain subscribers are effective. If your list of subscribers isn’t growing by at least 2% a year, you’ll probably run out of subscribers over time, so you may need to rethink your list-building strategy.
Finally, we have the most important email marketing metric of them all: return-on-investment (ROI). While all of the email marketing metrics that we’ve discussed so far are valuable, only ROI actually tells you if the time, money and effort you’re putting into email marketing are actually worth it.
To calculate the ROI of your email marketing, take the sales generated by your email marketing, subtract whatever you’ve spent on email marketing and then divide the difference by the amount of money you’ve invested in email.
ROI = [$ in sales – $ invested] / $ invested
It’s important to note that there are actually a lot of ways to calculate ROI. This is the simplest form of ROI calculation, but if your business prefers another model, that’s totally fine.
In addition, you can calculate ROI on a campaign-by-campaign basis, a drip-by-drip basis or across all of your email marketing efforts. The important thing is to understand what the payoff is for your efforts.
Just to give you a benchmark, the average return-on-investment for an effective email marketing strategy is $38 for every dollar spent. If you’re fairly new to email marketing, it may take you some time to get to that point, but a solid email marketing strategy is an investment that produces great dividends.
These are just a few of the email marketing metrics you can track, but they’re the most important and goal-oriented metrics in your email marketing account. Honestly, while the other metrics are interesting and can make you feel good about your email performance, they’re basically vanity metrics.
Having a low unsubscribe rate is nice or a high open rate is nice, but if those metrics aren’t translating into actual clicks and conversions, what’s the point? If you’re going to invest time and effort into email marketing, you need results that matter…and that’s why you need to closely follow the 6 metrics we’ve discussed here today.
By the way, if you’re looking for ways to get more out of your email marketing, why not let us help? We love email marketing and we have a ton of experience helping businesses succeed with email. If you’re interested, just let us know here or in the comments!
How do you feel about this list? Do you agree with these email marketing metrics? Did a favorite metric of yours not make the list? Leave your thoughts in the comments.