Measuring the value of your email marketing
If you’re up to speed with the basics of email marketing, analytics can help you measure its value.
Why measure your email marketing?
Measuring the value of your email marketing is critical for a full picture of how well all your digital marketing is working. Analytics can help you understand the value you’re getting, what’s working well, and anything that needs to change.
Six metrics help you measure the value email marketing brings to your business:
- bounce rate
- delivery rate
- list growth rate
- click-through rate
- conversion rate
- email sharing/forwarding rate.
You can set up analytics tools such as Google Analytics to gather these metrics — or get help from a digital marketing expert. Then you can use these metrics to understand the overall value of your email marketing.
Bounce rate is the percentage of total emails sent that bounce back and are not delivered to the recipient’s inbox.
There are two kinds of bounces: ‘soft’ bounces and ‘hard’ bounces.
A soft bounce happens when someone has temporary problems with a valid email address, such as a full mailbox or a problem with the server. The emails will still be delivered to the customers once the problem is resolved.
A hard bounce happens when an email address is invalid, closed or non-existent. These emails will never be delivered.
Best practice is to remove hard-bouncing addresses from the email list. Internet service providers use bounce rates as one of the key factors to determine an email sender’s reputation. Having a high bounce rate can make it look like your company is sending unsolicited ‘spam’ emails.
Delivery rate is the opposite of the bounce rate — it’s the percentage of emails successfully delivered to recipients’ inboxes.
A delivery rate of 95% or above is considered good. If a particular campaign has a lower delivery rate than your average, check if something in the subject line or the content of the message could have caused a problem.
Email filters will catch your email if it looks irrelevant or unsolicited, known as ‘spam’. For example, a subject line like ‘Congratulations, you have won our special prize!!!’ looks suspicious. Read email marketing company Campaign Monitor’s guide to Avoiding Spam Filters. You can also send a specific email to a checking service that will highlight anything that looks like spam.
List growth rate
List growth rate shows how quickly your email list is growing, by comparing the people joining and leaving the list.
As well as people who unsubscribe, the formula also accounts for email addresses that responded saying your email was spam.
Aim to increase your list growth rate to extend your reach, expand your audience, and position yourself as an industry thought leader. Email marketing lists naturally age, with an average of 25% of your subscribers leaving each year. You can counter this by growing your subscriber list and keeping it healthy.
Click-through rate is the percentage of email recipients who click on one or more of the links in an email you send.
The click-through rate lets you calculate performance for every individual email you send. It shows how many people on your list are engaging with your content and interested in learning more about your brand or your offer. You can look at why individual emails do well or badly, or track how your emails’ performance changes over time.
Conversion rate is the percentage of email recipients who click on a link in an email you send and then take the action you want. This action could be buying a product, or it could be something like completing an enquiry form.
Conversion rate is the ultimate measure of an email campaign’s effectiveness. The higher the conversion rate, the more relevant and compelling the offer is for your audience. The conversion rate also depends on other factors beyond the original email message, such as the quality of your landing page or whether a product is in stock.
Email sharing/forwarding rate
Email sharing/forwarding rate is the percentage of email recipients who click on a ‘share this’ button to forward your email to friends or post it to a social network.
These shares are a key way to generate new contacts. Email offers that get shared beyond your own list are often the best-performing campaigns, because sharing drastically increases your reach.
Watch your sharing/forwarding rates carefully to discover which types of articles and offers get shared the most. Use that knowledge when you plan future campaigns.
Figuring out your overall return on investment
Overall return on investment (ROI) shows how effectively your campaign made money. Once you have the metrics we’ve talked about you’ll know:
- how many potential customers hear about your offer (from your email list or from friends)
- how many of those click through to your website
- how many of those take the action you want, such as completing a purchase.
If you know the cost of an email campaign, and the value to your company of the purchases made as a result, you can calculate the overall return on investment. You may want to take into account various costs such as staff time configuring the email campaign, software subscriptions, payment fees, delivery costs and more.
Need help? Get in touch! We’re happy to talk to through the ins and outs of email marketing and how to best use it for your organisation. Send us an email at email@example.com .
By Robyn Bradley