Email marketing is all the rage. Far-reaching. Cost effective. Popular with marketers and consumers alike.
It’s older than social media, SMS, messaging apps, influencer marketing, push notifications, and most other tactics and channels in the mix, yet consistently outperforms them all: average open rates in the 30-40% range, average click-through rates between 2-4%. The return-on-investment can be as high as 4400%.
That said, it’s certainly no spring chicken: the first email was sent in 1971 by Ray Tomlinson…to himself (no one else had an email address!).
Email may strike some as a bit old-fashioned and outdated, but if anything, it’s the elder statesman of the digital crowd. It commands respect. It delivers results. And tools like Mailshake, Mailchimp, ConvertKit, and more make it affordable, accessible, and possible for businesses small, medium, and large.
But you already know that. And you’re probably using it already, too. Right?
However, there’s a world of difference between simply using it, and using it to its full potential. To do that, you need to track, measure, and monitor.
“What gets measured gets improved.” ~Peter Drucker
If you’re not paying attention to your email metrics, you might as well not bother with email at all.
And when it comes to your sales emails, there are 7 metrics that matter most.
What is a metric?
In simplest terms, a metric is merely a measurement. When it comes to business and marketing, more specifically, we might define a metric as a quantifiable measurement of a particular process. We use metrics to both track and evaluate success. Are things getting better? Worse? Are we hitting our goals and benchmarks?
Metrics provide those answers. There are a lot of them you could use and track, but that doesn’t mean you should. Too much data is often as bad as too little. It can lead to indecision and analysis paralysis.
You need to focus on a select few. And to do that, you need to have a concrete and explicit goal for each campaign or series you launch. What do you want to accomplish?
The major players in the email marketing game can calculate and display these automatically for you on your account dashboard – typically under reports, or something similar – but it never hurts to know how to do it manually, too.
1. Open Rate
2000 opens sounds great. An open rate of 72% is spectacular. But if they resulted in zero clicks, it just doesn’t matter. Many describe the open rate as a “vanity metric,” believing that it’s ultimately meaningless, just like tracking Facebook likes.
That’s not entirely wrong: opens and likes look good on a report, and give you a little ego boost (they like me, they really like me!), but they don’t pay the bills. A like or open is not a sale. Many consider tracking open rate a waste of time.
But ignoring it completely is not the answer, either. While your open rate should not be the only metric you track, it does provide some valuable insight, and there are many worthwhile ways to test and improve it.
It’s best used as a comparative metric rather than a deciding factor. You can compare it to the industry average, your competition (if they publish that kind of information), and even your previous or concurrent campaigns. Is it better? Worse? Why? Hypothesize, test, and tweak accordingly.
And remember, when it comes to your opens, you should give more weight to your unique open rate. Otherwise, you’re counting each time the same person reopens your email.
To calculate it, you simply take the number of unique opens divided by the total number sent, minus the number of bounces. For example:
56 (unique opens) / [279 (total sent) – 17 (number of bounces)] = 21.4% open rate
An open rate in the 20-40% range is average across most industries.
2. Click-through Rate (CTR)
Every email you send needs a call-to-action. You want them to do something. And those CTAs are almost always connected to a link of some sort (taking them to a landing, sale, subscribe, review, browse, or download page, for example).
You must track your click-through rate. You need to know how many people click that link. Why? For starters, it reflects the appeal and power of your CTA, and it takes you one step closer to conversion (whatever that happens to be for each email).
A high open rate with a low CTR is a surefire indicator your CTA is weak. People are seeing it, but not engaging with it.
Once again, be sure to differentiate between total clicks and total unique clicks for a more accurate figure. Somewhere in the 2-4% range is decent, but the best reach 10-15% or higher. That should be your goal. Never settle for average.
To find yours, take the number of unique clicks divided by total emails sent – bounces. For example:
37 (unique clicks) / [1000 (total sent) – 41 (number of bounces)] = 3.9%
That might seem low, but remember, the overall average is 2-4%, so it’s actually at the high end of average. Definitely room for improvement, but no reason to panic.
CTRs and open rates vary across industries and countries. It’s not the same everywhere, so be sure and compare against the correct average if you want to see how you stack up.
Click-through rate is perhaps the sales email marketing metric, with 70% of respondents in a recent survey listing it as a key metric.
In short, if they don’t click, you can’t sell them. Measure it, track it, manage it.
3. Conversion Rate
Obviously, this is a crucial metric in any campaign. You have a goal for each email, whether it’s standalone or part of a series. There’s something you need your recipients to do at each stage to guide them through your sales funnel: prospect to lead to paying customer.
Your conversion rate simply measures how many people are doing whatever you ask them to do. It needs to be high as possible. More conversions = more revenue.
Perhaps counterintuitively, respondents in that same survey ranked conversion rate as the second most important (60%) behind CTR (70%). This is likely due to the fact that you can’t convert them if they don’t click in the first place.
Your conversion rate depends on your goal.
Find it by taking how many people converted (opted-in, subscribed, downloaded, watched, purchased, and so on) divided by how many people could have (total number of ad impressions, total number of visitors to a page, how many people opened an email, etc). So, if 270 people clicked-through your email and arrived at your landing page, and 11 of those purchased (or subscribed, or whatever), your conversion rate would be:
11 (total number of conversions) / 270 (total traffic to page) = 4.07%
The average conversion rate varies a great deal depending on the industry and type of message sent, from 1% for newsletters to 5% for an order follow-up or abandoned cart email. Comparing against your own past campaigns is probably the best idea to determine whether you’re performing better than 6 months or a year ago. Always aim for improvement.
Sumo calculates the average email opt-in (conversion rate) at 1.95%.
Any concrete goal can be tracked, giving you a conversion rate for each step in your funnel. Aim for the sky, then track, tweak, and optimize to get there.
4. Return-on-investment (ROI)
Sales is about dollars and cents. How much is coming in? How much did it cost to bring it in? Can we increase the former while decreasing the latter?
As it relates to sales and email marketing, you can…by tracking your return-on-investment, doing more of what works, and less of what doesn’t. Stop throwing money away on campaigns and emails that just don’t resonate with your audience.
Here’s the good news: email consistently provides the highest marketing ROI. In fact, it delivers a $44 return for every $1 spent, up from $38 the year prior.
Yes, that’s a return of 4400%.
So, what kind of return are you getting on your email campaigns? It can be tricky to calculate, but there are many formulas and calculators available online to help you out. Some are simple (maybe too simple), while others are complicated. Find one that fits your particular situation and setup.
You’ll need several data points handy to calculate it, such as campaign cost, send volume, open, click, and conversion rate, average conversion value, and more. But you should be tracking those already, so it shouldn’t be too difficult.
Be forewarned: you may become addicted to improving your ROI once you start measuring and comparing it…but that’s not a bad thing.
5. Click-to-open Rate (CTOR)
We’ve already established that a high open rate is nice, but really only useful as a comparative metric. A high CTR is better, as you need them to click so you can (eventually) sell them.
Putting those two together can prove tremendously valuable. The click-to-open rate compares the number of people who clicked to the number who opened. Calculate it quickly with a very simple formula: (unique clicks / unique opens) x 100.
[15 (unique clicks) / 53 (unique opens)] x 100 = 28.3%
As with the other metrics, it varies by industry. The overall average for the first half of 2017 was 11%, but it was nearly 3x that – 30% – for advertising/marketing.
The CTOR cuts through the noise and measures the quality of the email content and CTA. Nothing else.
The CTR gives a big picture evaluation of your campaign (including subject lines, personalization, and more), while the CTOR evaluates the email content alone, as it only works with the number of people who react and engage with your email message once they’ve decided to open it.
Comparing them is a useful exercise.
6. Disengagement Rate
Your disengagement rate is the sum of your unsubscribes and spam complaints.
In essence, it measures how successfully your emails are working to engage your audience. Those actively unsubscribing or complaining are not just evidence of disengagement, but that something is very, very wrong. They just don’t dislike it. They hate it.
To find it, add the unsubscribes and spam complaints divided by unique opens:
[3 (unsubscribes) + 2 (spam complaints) / 4100 (unique opens) = 0.12%
Most experts recommend keeping your disengagement rate below 0.15%. Too high for too long, and your overall deliverability will start to suffer. You can’t make everyone happy all the time. Unsubscribes and complaints will happen. Just actively track and manage them.
7. Email-generated Sales
This is what it’s all about: the earnings. If your sales campaigns aren’t earning, what’s the point?
Your earnings per click (or per email) gives you a quick and easy snapshot. Dollars and cents. Is it working (i.e. bring in the cash)?
Track and measure regular sales campaigns, coupon/discount campaigns, special theme or holiday campaigns, and more. Set a conversion goal, measure revenue generated, and track emails. You can use native tracking tools within your marketing and sales provider, or by adding a simple UTM parameter to links. Either way, you want to determine which emails make your recipients reach for their credit card.
The calculation is beautifully simple: total revenue / total clicks (or total emails sent). If you sent two different coupon emails to 500 recipients, you could quickly compare their earnings:
Email A – 3500 / 500 = $7 per email
Email B – 2700 / 500 = $5.40 per email
Same coupon for the same product, but Email A is earning more. Its content, subject line, design, or CTA copy is resonating with more recipients.
Alternatively, you might opt for a metric template or scheme. Steli Efti recommends the AQC (Activity-Quality-Conversion) system to track your overall sales data and efficiency.
“If you’re serious about improving your sales performance, get serious about tracking your sales data.” ~Steli Efti, CEO at Close.io
Later, you could add email forwarding/sharing or deliverability rate to measure and manage how successfully your message is getting out there. More eyes = more potential sales.
There are many metrics. These 7 represent a good jumping off point.
What metrics matter most to you and your business? How do you track, measure, and manage? Leave your thoughts in the comments below: