Collecting and evaluating metrics from an email marketing campaign is very important. The open, delivery, and response rates of your email campaigns can determine if your email marketing strategies are successful or failing. Trending strategies can be applied after these metrics are accumulated to determine if as a whole your email campaigns are on the up or downswing. Here’s what you should know:
1. Total Delivered:
This is the first metric that you should always calculate if your ESP (Email Service Provider) does not do it for you. The total delivered tells you the total number of emails that were successfully delivered into recipient inboxes. We will need this number to calculate other email marketing metrics below.
The total delivered can be calculated like this:
Total number of emails sent (–) Total number of bounces (Hard + Soft)
The total number of emails sent refers to how many recipients you initially published your email to. If your sent number is 10% or more lower than it should have been you may have had a problem with your segmentation. If you download your active list and the list that your email was published to we can give you a list of emails that did not receive the message. Bounces are explained in further detail below.
2. Delivery Rate:
The delivery rate tells you the percentage of emails that were successfully delivered into recipient inboxes.
The delivery rate can be calculated like this:
Total delivered / Total number of emails sent
Unless you are delivering to a list for the first time your delivery rate should be 90 to 100%.
3. Bounce Rate:
Bounces are not always easy to understand, here are the basics.
A hard bounce is a delivery failure of your email because of a permanent error. For example a hard bounce is an email address that does not exist or was abandoned. To optimize your email campaigns you should always remove hard bounces from your active delivery list. By doing this your email campaign metrics become more reliable, you are not sending an offer to an invalid lead, and best of all you are only paying for active leads.
A soft bounce is a delivery failure of your email because of a temporary error. For example AOL’s mail servers were temporarily down when you sent your email; this would be a classic example of a soft bounce. These emails should stay on your active delivery list. Some ESP’s will remove soft bounces after the third or fourth time the same error has occurred. This is ok because the mail server may not exist anymore. For your protection it is always a good idea to keep a close eye on this. If the soft bounces seem unusually high you might want to start a discussion with your provider. Or you can always ask us to examine your bounce report and we can determine what may have happened.
The bounce rate for a campaign can be calculated like this:
Total number of bounces (Hard + Soft) / Total number of emails sent
We divide this one by the total number of emails sent because we want to know of the emails we published how many bounced back, not of the emails we delivered how many bounced back. We know that none of the emails we delivered bounced back.
4. Open Rate:
Open metrics of your email campaigns usually consist of two elements unique opens and total opens. A unique open refers to the number of unique recipients that opened your email newsletter. A total opens, on the flipside refers to the cumulative number of times that your email was opened all together. So for example lisa@gmail.com a loyal subscriber opens the email newsletter while she’s at work and reads through it and notices a sweater she is interested in purchasing. She closes the email and flags it because she doesn’t have time to investigate further. When she gets home she opens the email newsletter again and proceeds to buy that sweater that she liked so much at work. She is counted once and only once in your unique open tally, but twice in the total open tally because she opened the email at work and at home later.
The open rate for a campaign can be calculated like this:
Unique opens / Total Delivered
Open rates are continuing to decline and becoming an unreliable metric in today’s email marketing environment. Open rates are calculated usually based on a one by one invisible pixel at the bottom of an email campaign. This pixel is turned on when images are turned on by users and the open is counted. Handheld devices block image downloading and prevent an open from being recorded. No method exists for tracking opens from text versions either. Major ESP’s insist that today open rates should only be used to identify large problems such as no opens on a major domain (like MSN) or sudden drops outside your normal open rate. When you use open metrics in conjunction with delivery data it can help to determine missing bounces that may have been blocked at the firewall level, or bulk SPAM folder delivery. If you notice a problem with your open rate, feel free to have us help you investigate the problem.
5. Click-Through Rate:
Click-through metrics also consist of two elements unique clicks and total clicks. A unique click refers to the number of unique recipients that clicked on a link in your email newsletter. A total click refers to the cumulative number of times that a subscriber clicked on a link in your email newsletter. Sounds easy, but it is actually complicated because email newsletters typically contain more than one link. Let’s try to explain this better with an example. lisa@gmail.com opens the email newsletter when she gets home from work and clicks on the sweater that she liked and she also clicks on a pair of pants. She is now counted once on the sweater link and once on the pant link in BOTH unique and total clicks. She abandon’s the website and decides not to purchase the pants or the sweater. The next day she opens the email newsletter and clicks on the pants and the sweater again. She is still only counted once on the sweater link and once on the pant link in unique clicks BUT she is counted as two for both the sweater and pant link in total clicks. Your unique click metric will be two, while your total click metric will be four.
The click-through rate for a campaign can be calculated like this:
Unique clicks / Total Delivered
The click-through rate is the most important, most reliable metric in any email campaign. Think of your click-through rate as your email campaign’s impact. This number tells you how engaged a consumer was by your email because it was worth it for them to click. This number also gives you an indication of how many active subscribers you have. This metric unlike the open rate includes data from BOTH the text and HTML versions of your email campaign.
If you want to further analyze click-through metrics you can determine delivery rates at specific domains. If one domain performs drastically different than another domain it might indicate a problem. These problems could include things like SPAM folder delivery, or a new template not engaging your customer. If you don’t have time to do in-depth click analyses have us analyze your click-through report for you.
6. Unsubscribe/Opt-out Rate:
Your unsubscribe rate is very easy to understand. Of the people who received your email how many decided that they didn’t want to get the email newsletter anymore. Having an opt-out (unsubscribe) method on an email newsletter is required by CAN-SPAM legislation. Unsubscribe rates are a reliable metric because the unsubscribe method is almost always a link.
The unsubscribe rate for a campaign can be calculated like this:
Total Unsubscribed / Total Delivered
You want the opt-out number to be low, but it should never be zero. Sorry to those of you who thought you sent out the perfect email. When evaluating unsubscribe rates and comparing them to other campaign unsubscribe rates, you can determine if customers are generally happy with your mailings. Don’t get too fixated on these results, it is very likely that people are just deleting your email and not reading it. Also be aware of people clicking the SPAM complaint button. SPAM complaints often do not show up in the unsubscribe totals for ESP’s yet people should actually be unsubscribed when they click this button. That gives you two very important questions to ask your provider.
7. Referral Rate:
What is a referral? If you have received an email newsletter with a ‘Send to a Friend’ or ‘Forward to a Friend’ or ‘Pass Along’ at the bottom that is a referral. When someone clicks that links and sends the email on to someone else, then you are in the business for referral metrics.
The referral rate for a campaign can be calculated like this:
Referrals / Total Delivered
Referral rates are typically very low. Speculation tells us that people just ignore links in the footer of an email and this may be the reason why. Either way it is nice to know people have this option. You might want to try to put the referral link in a different place than hidden in the footer. Sometimes experimentation is the best way to get results in email campaigns.
A word of caution about referral email addresses: it is unethical to collect these email addresses and add them to the email database. Our suggestion is to allow the person to opt-in with a standard opt-in box that you put specifically in the referral.
8. SPAM Complaint Rate:
SPAM complaint metrics consist of people who click on the SPAM complaint button in webmail clients. Almost all webmail clients have this email marketing annoyance. Ok, it can be worthwhile for true SPAM but people reading this post are likely not SPAMMERS. AOL, Hotmail, Gmail, and Yahoo all have it, if your email marketing database is like most that covers 90% of your reading base. The button happens to be located in a prime location right at the top. Internet Service Providers (ISP’s) do know that people use this method to unsubscribe frequently, that’s the good news.
If your SPAM complaint rate is too high ISP’s can content filter your emails and not deliver them to email addresses at all. They can also randomly pick an email address from your list and make you verify that it was collected from a website or legal method.
The SPAM complaint rate for a campaign can be calculated like this:
SPAM Complaints / Total Delivered
Aim for a SPAM complaint rate that is less than 0.1 percent. That is one out of every thousand that you send out. If you go over that you might not immediately be at risk for being blocked, but you should work on bringing complaints down. Also be aware that ESP’s don’t like high SPAM complaint rates at all because it affects everyone on their servers. Some even have strict zero tolerance policies if you go over 0.1 percent on too many campaigns.
9. Response/Conversion Rate:
A response or conversion rate indicates the number of people that actually did something as a result of your email blast. Some emails drive purchases, other just have a call to action. Both of these can be measured in conversion rates. Sometimes people call response and conversion rates action, donation, or advocacy rates. The terminology you use all depends on what industry you are providing the information for. If it is for a charitable organization you would likely call this metric a donation rate on the report.
The response rate for a campaign can be calculated like this:
Conversions (aka: # of Actions Taken) / Total Delivered
This metric is one of those metrics that you can’t benchmark. You can’t say, for example, that a 3% response rate for an online clothing retailer is bad versus the 5% response rate that the electronics store received. It just doesn’t make sense to compare this metric to data other than email campaigns within the same company.
10. eCPM:
This crazy sounding acronym refers to effective email cost-per-thousand. This metric is useful for anyone who uses an ESP or rented list. It basically answers the question: “Based on what I’ve spent how much bang did I get for the buck?” Sounds like it wouldn’t come in handy, but you would be surprised.
The eCPM rate for a campaign can be calculated like this:
((Email Revenue – Email Cost) / Total Delivered) * 1000
Here is an example of how it actually works:
You sent out an email that cost $500 to 20,000 recipients. Your revenue generated from that email was $1000. You spent $25 per thousand emails that you purchased. ((1,000 – 500) / 20,000) * 1,000
Now your company is contemplating sending to a purchased list of 40,000 recipients. Based on your last send you can accurately project that this email will generate $1,000 in revenue.
Here is how we got that number:
Your going to send to 40,0000 divide that by 1,000 because we are doing cost-per-thousand multiply this by $25 which is what you made on the last send. This gives you $1000. Remember we subtracted your overhead last time, so this is a projection of pure revenue without overhead cost.
11. Creative Effectiveness:
This metric should be used when changing the design of your emails. The unique people that clicked the email divided into the unique people to open the email explains the way the subscriber viewed the message. If links were not as noticeable or sparse we might see a drop in this metric. Keep in mind that we established earlier that open rates do not provide profound evidence of subscriber activity. When comparing an email from the old template, to an email with the new template, however, this is an accurate metric. Especially if the email blasts were sent out within a month or so timeframe to the same list.
The creative effectiveness can be calculated like this:
Unique Clicks / Unique Opens
12. Engaged Customers by Domain:
This metric is just another way of measuring an open rate. Instead of using the unique opens we are using the total opens this time. This metric is very useful for measuring engaged people on domains where images are turned off by default and users have to click to turn them back on. Downloading the list and analyzing it is the only way to effectively do this.
The most engaged customers can be calculated like this:
Total Opens (Separated by Domain) / Total Delivered
13. Landing Page Effectiveness:
The landing page effectiveness is a very interesting metric. This will help you optimize your website landing pages where people are making purchases and donations. This metric answers the question “Of the people who clicked on the email, how many responded and how many did not?”
The landing page effectiveness can be calculated like this:
Conversions / Unique Clicks
If you sent an email to 500 people and only 50 responded, your landing page’s effectiveness was at 10%. By the same regard your landing page’s ineffectiveness was 90%. This indicates that the landing page is really not doing as well as it should.
Understanding Email Marketing Metrics…
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