In the past couple of years, there has been a significant shift in how successful brands gauge and refine their email marketing metrics.
Whatever you decide your goal is, it is important to identify the metrics that will enable you to track your progress toward achieving it. In the realm of email marketing, seasoned professionals are placing less emphasis on the overall number of subscribers in their list and instead prioritizing metrics such as revenue attribution and engagement levels that indicate deeper engagement.
The Difference Between Vanity Email Metric And an Actionable Metric
What Is Vanity Email Metric?
Vanity metrics are those statistics that only give you a surface-level understanding of what is happening and don’t help you achieve your long-term strategic objectives. If used incorrectly, relying on this data could worsen the situation rather than improve it by inflating the overall impression of what’s happening.
Many businesses use vanity metrics to show themselves positively and to give the appearance of growth. Vanity metrics, on the other hand, aren’t a true indicator of growth and only impress those who don’t know any better.
For example, 10,000 registered accounts may seem impressive at first, but if there are only 100 active users per month, that number quickly loses credibility. Even so, if monthly active users aren’t properly analyzed, they could become yet another vanity metric.
The vanity metrics are heavily decried due to the following reasons:
- Overly simplistic to measure, ignore nuance and context
- Frequently misleading and does not help you improve in any meaningful way.
What Is an Actionable Email Metric?
An actionable email metric is a measurable value used to measure the success of an email marketing campaign. Common actionable email metrics include open rate, click-through rate, unsubscribe rate, and list growth. These metrics provide insight into how effective an email campaign is in engaging customers and driving them to take a desired action.
For example, a company might measure its open rate to see how many people are opening their emails or its click-through rate to gauge how effective its content is in engaging customers. By tracking these actionable metrics, businesses can gain a better understanding of the performance of their email campaigns and make adjustments accordingly.
Key takeaway: “It’s not fair to say any particular metric is consistently a vanity metric. But if you’re not meaningfully analyzing open rates, unsubscribe rates, and click-through rates in tandem with your goals for that segment, for that flow, they’ll end up being vanity metrics,” Alexa Kilroy, Head of a brand at Triple Whale, says.
How to Measure Email Marketing Metrics
1. Click-through Rate (CTR)
The click-through rate (CTR) refers to the proportion of email recipients who click on a link contained in the email. Email marketers use CTR to measure the level of engagement that their emails receive. If more people click through, then there is a higher probability that those clicks could lead to purchases, although it is not a guarantee.
CTR Formula
For example, if you sent an email to 110 people but only 100 were successfully delivered, and 35 of those recipients clicked on your call-to-action (CTA) and were directed to a new page.
Your CTR would be calculated: CTR = 35/100 x 100 = 35%.
Click-to-open Rate
The click-open-to rate measures how many emails are opened by recipients that also clicked on a link in the email. This metric is different from the click-through rate (CTR), which measures the percentage of people who clicked on any given link in an email, regardless of whether they opened it or not.
What Is a Good Click-through Rate?
The suitable click-through rate (CTR) for your business is influenced by various factors such as industry, budget, campaign objectives, and audience size. Based on Klaviyo‘s recent data, the average CTR for email campaigns is 1.51%, and for automation, it’s 5.83%. However, it’s important to note that these figures vary according to industry and type of email.
How to Improve Click-Through Rate
- Clean up Your Email Lists
Having an up-to-date email list is key to improving your click-through rate. Having outdated emails on your lists can decrease deliverability and engagement performance. This means fewer people are receiving your emails, and fewer will be interested in taking action after clicking them. To clean up your list, start by removing duplicate emails and any addresses that are marked as invalid or bounced.
- Optimize Your Subject Lines
The subject line of an email is the first thing recipients see when they open their inboxes. Make sure to craft subject lines that grab attention and accurately describe what’s in the email. To optimize click-through rates, subject lines should be clear, concise, and offer a benefit to the reader. Try out different subject lines to test how recipients respond, then adjust accordingly.
- Make Sure Your CTAs Pass the “Squint Test”
The call-to-action (CTA) is an important element of any email campaign as it encourages people to take action after reading the content of the message. Make sure your CTA buttons pass the “squint test”- this means they should be visible even when someone squints at them from across a room.
Use contrasting colors and bold font sizes to make sure readers can easily click on them. Additionally, keep CTAs consistent across all emails so that recipients recognize what they need to do.
- Create Personalized Emails That Scale
Automated email, also known as email marketing automation, refers to sending messages to a large group of people based on their online behavior, such as subscribing to a mailing list or browsing a website. As these emails are personalized based on the recipient’s actions, they tend to receive more clicks compared to generic emails.
For instance, welcome emails have been found to perform four times better in terms of click rates and twenty-three times better in conversion rates compared to non-automated email campaigns.
2. “Active on Site”
How to Use “Active on Site”
While click-through rates (CTRs) can provide a starting point for assessing engagement, the “active on site” metric offers a more detailed picture of product interest and purchasing intent. By tracking website activity, you can observe the actions taken by visitors who have clicked on your email, including the amount of time they spend on your site, the pages they browse, and the contents of their shopping carts.
By leveraging website activity data, you can tailor your email marketing approach to better resonate with your audience. Using the “active on site” metric, you can determine which pages on your website are receiving the most engagement and use this information to segment your email list according to recipients’ interests and level of engagement.
How to Measure a Good “Active on Site” Rate
The “active on site” metric places greater value on increased website visits. For instance, if your recipients visit your website on a weekly basis, they can be deemed as “highly active” and warrant personalized experiences that can potentially lead to a sale.
How to Improve Your “Active on Site” Rate
- Segment Your Lists
The “active on-site” metric can create a challenge when it comes to improving it, as you need to segment your email lists to achieve better results. However, to segment your audience effectively, you must first gain an understanding of their interaction with your website, which can seem like a daunting task.
One way to start is to use demographic information that you have legally obtained from your subscribers and that is relevant to your brand to create initial segmentation. As you conduct A/B testing to refine your email marketing strategy, you should start to see enough website traffic to enable segmentation based on user behavior.
- Create Interactive Content
Incorporating interactive content, such as quizzes, polls, and games, into your marketing strategy can yield several benefits.
Firstly, it can increase the amount of time that visitors spend on your website. Secondly, it can expedite the process of learning about your subscribers and dividing them into targeted email lists. Lastly, by utilizing interactive content, you can design promotions that appeal to a larger portion of your audience.
- Improve Website Experience
Your website should provide a positive browsing experience for visitors who have clicked on your email, similar to how a store welcomes a customer.
To achieve this, it is important to ensure that your website meets basic usability standards, such as:
- Suggesting similar products on product description pages
- Featuring a variety of product categories, including bestsellers
- Investing in detailed product descriptions
- Meeting accessibility standards (especially for mobile devices)
- Loading quickly (particularly on mobile devices)
3. Conversion Rate
Email conversion rate refers to the proportion of email receivers who clicked on a link in an email and carried out a specific action that was intended, such as buying a product or completing a lead generation form.
What Is a Good Conversion Rate?
The average conversion rate for email campaigns is 0.1%, while for automation, it is 1.82%, according to Klaviyo’s most recent data. However, these rates may vary depending on the industry and type of email used.
How to Measure Conversion Rate Against Other Metrics
Achieving a high conversion rate for your email campaigns is excellent, but it’s even more beneficial when the cost is low, and the outcomes are profitable. Therefore, when assessing your conversion rate, it is important to consider the revenue per recipient and the return on investment. The revenue per recipient helps determine the worth of your conversion rate, while the return on investment indicates the cost incurred for each conversion compared to the amount generated.
How to Improve Conversion Rate
To enhance your conversion rate, you can utilize similar techniques used to improve website activity; however, for email campaigns, you will also need to focus on improving the online purchasing experience. The following are some ways to accomplish this:
- Reduce the number of stages required to complete a purchase.
- Provide various payment methods.
- Offer in-depth product information, such as product specifications, customer reviews, user-generated content, and high-quality images.
- Incorporate live chat support.
- Ensure your website is optimized for mobile devices.
4. Revenue per Recipient
The metric Revenue per recipient (RPR) provides a clear answer to the question of how much a single email recipient is worth in terms of revenue. It is easier to calculate compared to return on investment which requires knowledge of all expenses. RPR is an effective tool to evaluate the effectiveness of your email marketing strategy and to determine if your audience segmentation is correct.
What Is a Good Revenue Per Recipient?
There is no standard definition for a “good” RPR. Brands with high-priced products may have a higher RPR benchmark, while brands with low-priced products may have a lower benchmark. Klaviyo’s latest data indicates that the average RPR is $0.12 for email campaigns and $1.91 for automations, but this varies depending on industry and email type.
How to Measure Revenue Per Recipient Against Other Metrics
Sending emails to your entire email list can harm your RPR, as sometimes, less is more effective. Therefore, it’s crucial to track email efficiency and RPR as soon as your emails start generating revenue. It’s also essential to monitor unsubscribe rates alongside RPR. If your unsubscribe rates are increasing while your RPR is decreasing, it’s a sign that you need to clean and segment your email lists.
How to Improve Revenue Per Recipient
Improving RPR, like improving CTR, involves making your email marketing strategy more targeted by utilizing customer data and segmentation.
Customer-First Data is based on customer behavior such as website activity, purchasing trends, email and SMS engagement, and customer service interactions. This data can be used to segment your email list according to specific groups, such as people who have made a purchase, VIP customers, website browsers, cart abandoners, and event attendees.
Segmentation can help set expectations for RPR within each group, since different segments may have different RPR benchmarks. For example, discount shoppers may have a lower initial RPR, but may become more loyal over time and generate more revenue in the long run.
5. Deliverability Rates
To determine the deliverability rate of your emails, divide the number of emails that successfully reached their intended inboxes by the total number of emails you sent, then multiply the result by 100.
The deliverability rate is the proportion of emails that successfully reach your recipients’ inboxes. Unfortunately, not every email that you send will be received by the intended recipient, as some emails may bounce back or end up in spam folders.
When you observe low deliverability rates, it’s usually due to:
Email Bounces
There are two types of email bounces: hard bounces and soft bounces.
- Hard bounces occur when emails can’t be delivered because the email address is invalid or marked as spam.
- Soft bounces happen when emails can’t be delivered due to a temporary reason like a full inbox.
Spam Complaints
When an email recipient labels an email as spam, it’s called a spam complaint. Email providers take note of emails that receive many spam complaints and consider them to be of low quality. As a result, the sender’s reputation is negatively impacted, and their emails are more likely to end up in spam folders in the future.
What Is a Good Deliverability Rate?
When evaluating deliverability, you are evaluating multiple metrics together, including open rate, click rate, email bounce rate, unsubscribe rate, and spam complaint rate.
How to Improve Email Deliverability
- Clean Your Lists Regularly
Successful brands prioritize the quality of their email lists over their size. If a subscriber has been receiving emails for a period of 3 to 6 months without showing any engagement, it is advisable to remove them from the list using a sunset strategy.
- Develop a Sunset Flow
Sunset flows refer to attempts made to bring back an inactive subscriber with the help of a special offer or other incentive. If these efforts fail to elicit a response, it is advisable to remove such subscribers from your email list to prevent the chances of spam complaints.
- Use Double Opt-in
Double opt-in is a method where a new subscriber is given the power to verify their subscription after signing up but before being added to your list. This approach creates a stronger bond between you and your recipients and indicates that they are genuinely interested in receiving your email content.
- Make It Easy to Unsubscribe
Despite its counterintuitive nature, making it simple for subscribers to unsubscribe reduces the probability of receiving spam complaints. Moreover, giving unsubscribers the option to reduce the frequency of emails instead of completely unsubscribing is beneficial in determining the email sending schedule.
- Create Personalized Content
The most effective way to ensure that your email content is desired by your recipients is to use personalized, segmented content that is triggered by their behavior.
6. Unsubscribe Rate
The percentage of individuals who opt-out or unsubscribe from your email list after receiving your email is referred to as your unsubscribe rate.
What Is a Good Unsubscribe Rate?
Klaviyo data suggests that if your unsubscribe rate is below 0.2%, you’re doing well. However, an unsubscribe rate of up to 0.3% is still considered acceptable.
How to Measure Unsubscribe Rate Against Other KPIs
Before becoming too worried about a high unsubscribe rate, it’s important to compare it with your list growth rate. Farge, Email marketing associate director at The Stable, advises that a higher unsubscribe rate may indicate a few things.
For instance, it might imply that you failed to establish clear expectations, but it could also mean that you conducted an acquisition campaign for an event or a free offer, resulting in a lot of people unsubscribing after it concluded.
How to Improve Unsubscribe Rate
To enhance the rates at which people unsubscribe from emails, it is beneficial to examine ways to improve click-through rates and the deliverability of emails. The identical principles are applicable in both cases.
7. List Growth Rate
The list growth rate measures how quickly you are gaining new subscribers for your mailing list. It can be a difficult metric to assess, as it may seem impressive but ultimately lacking in value if the new subscribers do not engage with your content. Therefore, a high list growth rate is only significant if it is accompanied by high levels of engagement.
How to Calculate List Growth Rate
To determine the list growth rate, you need to subtract the number of individuals who have unsubscribed from your mailing list during a specific period from the number of new subscribers acquired within the same timeframe. After that, divide the resulting figure by the total number of people who received emails from that list and multiply the outcome by 100.
What is a Good List Growth Rate?
The list growth rate is influenced by numerous other metrics, making it difficult to establish a standard benchmark. While some organizations consider a growth rate of 2.5% to be satisfactory, the effectiveness of this metric is only meaningful when considering other metrics such as click rate and conversion rate. Ultimately, the success of your list growth rate is dependent on the success of these other metrics.
How to Measure List Growth Rate Against Other Metrics
In email marketing, the quality of your subscribers is more important than the quantity. The list growth rate is not an accurate indicator of a successful email marketing campaign unless other essential metrics, such as click rate, conversion rate, email deliverability, and return on investment (ROI), are also performing well.
How to Improve List Growth Rate
- Pair a sign-up form with a discount
The most prevalent method of acquiring email addresses is by using a sign-up form on your website. While you may choose not to offer a discount as an incentive for people to sign up, research indicates that those who sign up using forms that offer a discount are 190% more likely to make their initial purchase than those who do not receive any discount.
- Partner With Another Brand
If you have a relatively new audience, you might want to collaborate with a bigger brand to help increase your reach. Seek out brands that do not compete with your products or services but offer complementary ones. To encourage sign-ups, offer giveaways, promote through social media, feature on your website, or co-create products with these brands.
- Use referrals
If your company has a loyalty program, utilize it to expand your email list. By offering incentives such as discounts, priority access to new products, or exclusive product access, encourage your loyal customers to promote your email list.
8. Return on Investment (ROI)
The ROI of your email marketing program is the financial return you receive from it compared to the amount of money you have invested in it. To calculate the cost of your email marketing campaign, you must take into account several factors, including:
- The cost of your marketing and email automation platform
- Human resources expenses (such as writers, designers, data analysts, marketing operations specialists)
- Third-party vendors (for list cleaning, A/B testing, delivery, strategy, etc.)
- Any advertisement costs incurred to promote email sign-ups
How to Calculate Return on Investment
What Is a Good Return on Investment?
Email marketing still generates a significant return on investment (ROI) compared to various marketing channels. A recent report by Litmus in 2022 states that the average ROI for email marketing is $36. However, this number increases to $45 for businesses in the retail, ecommerce, and consumer goods industries.
Conclusion
To increase your ROI in email marketing, it’s essential to analyze metrics as they relate to each other rather than in isolation. A single metric alone cannot improve your brand’s ROI significantly. For instance, having a high click rate is not beneficial if your conversion rate is low, and a high conversion rate is inefficient if the revenue per recipient (RPR) is not high enough to be profitable.
By segmenting your email list, creating personalized and relevant content, and showing empathy towards your audience’s needs, you can give them what they want and improve your ROI.
