Simple KPIs — Email Marketing

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This is a first of a multipart series in Marketing to list out basic/advance performance indicators, to help improve your marketing.

Cutting straight to the chase, here is the user flow when an email sent:

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A common flow for email marketing

Drop off reasons can be many, but are usually classified as “Hard Bounces” and “Soft Bounces”. Hard bounces are unreachable inboxes, incorrect email addresses etc. Soft bounces are temporarily unavailable inboxes (because they’re full), ESP not responding etc. Once the mail reaches the ESP, it goes through a Spam filter and then can reside in the spam filter or the inbox. The total number of mails that reach the ESP is referred to, hereon-below, as inboxes.

Let’s get to the important Metrics first:

Open Rate

Definition
The unique number of opens over total number of mails sent. Sometimes, to get a clearer picture, it is also calculated as the total number of unique opens over total number of inboxes.
In our flow, that translates to 30/110 (27.7%) or 30/100 (30%).

Importance
The open rate describes the ‘interest’ your user base has with your emails. It also describes reachability.

Influencing Factors
The following impact the open rate of an email:
a. The Subject Line
b. The Pre-header text
c. Sender Name

Factors that influence open rate

These factors help in creating the first impression about your mail. If they are congruent, and relevant, you’ll have a higher open rate.

The Gmail exception is that your mail can have the perfect subject line and the most informative pre-header text, but if your communication is classified as “Updates” / “Promotions” / “Social”, you’re in trouble. There is a way out, which I will discuss in later posts.

Industry benchmark Varies from 10–30% depending upon industry and region.

Click Rate

Definition The unique number of clicks over total number of mails sent. It is also calculated as the total number of unique opens over total number of inboxes. In our flow, that translates to 10/110 (9.1%) or 10/100 (10%).

Importance The click rate describes the quality, relevance and congruence of email content.

Influencing Factors Key factors are:

  1. Congruence Your subject line/pre-header text content should be in line with the content within the mail. E.g. The subject line reads “50% off on fashion products” and the pre-header reads “Get up to 50% on fashion products on XYZ.com. Shop today”, but your main image and content speaks of your new line of shoes without mentioning the 50% , you’re getting lower click rates.
  2. Relevance Essentially, if your member signed up for baby products, don’t show him/her pet foods! The relevancy factor opens the door to Personalization — which is a subject on its own.
  3. Quality This one is tricky to indicate — but things like correct grammar, good type, good easy to load images etc contribute a lot to the click rate.
  4. Mobile Friendly Over 60% of the mails are opened in a mobile device. Mobile readiness of an email is a very high contributor to the click rate — mails which are mobile friendly (responsive) tend to be clicked over 30% more.

Industry Benchmark
Varies from 2–5% depending upon industry, region and type of mail.

Click to Open Ratio (CTOR)

Definition
The unique number of clicks over unique number of opens. In our flow, that translates to 10/30 (33.3%).

Importance
CTOR describes how well the designs and offers within your email resonated with the users.

Influencing Factors
The key factors are almost the same as those for Click rate.

Industry Benchmarks
Between 10–15%, depending upon the industry.

Conversion Rate

Definition
Total number of transactions over total number of inboxes. In our flow above, that’s 2/100 (2%).

Importance
This is the whole reason for choosing the email marketing channel, if you’re a transactional e-commerce. If you’re more of an informational website, you can replace the transactions number by whichever goal you track on GA.

Influencing Factors
Simply put, everything impacts here — prominently, your promise in the mail should be met when you enter the website. There should not be any paywalls/sign-in restrictions etc. E.g. if your mail shows an image of Samsung Galaxy S8 with a 20% discount sign, the user should not be directed to the iPhone (or worse Oppo phone) page. It also helps to keep the product in the clicked image as the product you first see when you land on the page — since they could be (and most probably are) the reason why the user clicked on the image.

So there you have it! Four key metrics for you to look out for, and tweak as you progress on your email marketing journey. Do write to me if you have any questions.

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(Other KPIs like Unsubscribe Rate, Bounce Rate, Site Bounce Rate are not discussed for now. They’ll be taken up later in the coming posts.)

Written by

Simplifying Complexities for a Living | rkakodker.com

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