Email drives traffic. A lot of it, in fact.
It’s one of the best selling channels in ecommerce. So it’s no surprise then that everybody is so hyped about it. After all, why wouldn’t you be excited about a channel where the average return on investment on $1 spent is $44.25?
Consumers favor email too. 90% of online shoppers prefer to receive email updates from retailers. Also, 44% of online customers made at least one purchase last year based on a promotional email they received. And lastly, only 18% of consumers say they never open commercial emails.
I know I’m running the risk of repeating myself here, but my point is the hype around email marketing seems justified.
The problem many retailers often face is an underdeveloped email strategy and not knowing if what they do actually works. Email is not only a sales tool. It can also help you with improving your brand awareness and regularly position you in front of your target audience.
Therefore measuring sales through email alone isn’t enough. You need to keep track of several metrics to execute an effective email strategy. And you should do so for a number of reasons:
But how exactly do you know if your campaign is working?
KPIs are progress indicators you identify to be closely connected with your overall goals. In email marketing, the best examples of KPIs would be:
This metric measures the sales brought by your campaigns. Ideally you should measure this metric a couple of days after sending an email, as many recipients might not act on it straight away.
What is this useful for? To establish the actual monetary value of your sales from each campaign.
Open rate is a calculation of how many of your emails were actually opened by your subscribers. Most email newsletter software will calculate it for you, but in case if you need to do it manually, you can find this KPI by dividing unique opens by the number of delivered messages and multiply the result by 100.
What is it useful for? This KPI is a very strong indication of whether or not your subject lines and topics are engaging and intriguing. A high open rate will suggest that the direction you’re taking with your subject lines and topics are on target. Low open rate will suggest that your emails are not relevant to your recipients. In that case, you should consider either cleaning up your email list or changing the direction of your email marketing efforts.
The click rate metric measures the percentage of email recipients who clicked on any link in your email. It does not, however, include information as to whether or not that click led to the desired action behind the link.
What is this useful for? Click rate shows if people who opened your emails found your links compelling. Also, coupled with other analytics data, this metric could help uncover potential problems with landing pages; for example, if users click, but bounce right away.
According to the Mailchimp Email Marketing Benchmarks Report, a typical unsubscribe rate for email lists falls in a region of 0.2 – 0.5%. This can change depending on your industry of course, but in general, most industries fall somewhere in this range.
What is this useful for? This metric can help you monitor your list for high unsubscribe rates that signal:
In most cases, the number of clicks should equal to additional traffic to the site. But when you’re analyzing your email performance, it is also worth it to log into your Analytics account and observe additional traffic to the site.
Many of your subscribers might open your emails but not act on them straight away. Moreover, some will not click on a link in an email, but note the site that sent them promotional info and perhaps access it later om their computer. Therefore, monitor changes in traffic in the hours after you send your email.
What is this useful for? This metric can help you establish at least a general idea of the effect your campaigns have on your traffic. It might not be the most accurate metric, yet it’s something you should pay attention to in measuring the overall impact of your email campaigns on your bottom line.
Your email list should grow each month, providing you with new subscribers. And just like you should monitor how many people drop off your list, you should also keep an eye on the pace of your list’s growth.
What is this useful for? Observing list growth will help you establish whether or not your email list building strategies are working.
Lastly, you should also track the overall number of conversions from your email campaigns. In the case of email marketing, a conversion rate would reveal the number of people who first opened the email, clicked on a link, and then performed a desired action behind the link (made a purchase, downloaded a coupon, registered for an event, etc.)
What is this useful for? This rate uncovers the number of recipients with the highest rate of interaction.