Email KPIs – what counts the most?
Some marketers think that Email is the cheapest media channel available to them. Well, I have to disagree – it isn’t the cheapest, but can be cost efficient when executed correctly. To measure its success you have to look into right KPIs, but which ones you should look at, you may ask? There is no one-fits-all answer to this question and decision should be yours.
Let’s start with some basic KPIs
There are several measurements that you can look into but I am going to focus on the most important ones. Most of them are unique measures, but I will mention others too.
1. Delivery Rate
Delivery Rate allows you to see what your reputation with ISPs is. Simply saying, it is a metric that tells you how many of emails you send, is delivered. It doesn’t mean delivered to inbox, as some of them may land in Spam Folder.
To calculate Delivery Rate you take Emails Sent, reduce it by Bounces, divide them by Emails Sent and multiply this number by 100.
2. Open Rate
Open Rate is the most common KPI in Email Marketing world that everyone reports on. It tells you, to some degree, how many of your customers open your email. It may be misleading too so don’t believe in everything you see. The reason behind this statement is that when your recipient deletes and email, email client usually moves to next one and opens it. That may count as email open, but it wasn’t intended. I works other way round – email may be opened but email tracking pixel wasn’t downloaded, so email doesn’t count as opened.
To calculate Open Rate you take Unique Email Opens, divide them by Emails Delivered and multiply this number by 100.
3. Click Rate
Click Rate is second the most common KPI in Email Marketing. It describes level of customer’s engagement with content of your email.
To calculate Click Rate you take Unique Email Clicks, divide them by Emails Delivered and multiply this number by 100.
4. Click to Open Rate
Click to Open Rate is a variation of Click Rate, and it allows you to see level of engagement more accurately. With this metric, you are able to see fluctuations more easily, than with Click Rate.
To calculate Click to Open Rate you take Unique Email Clicks, divide them by Emails Opened and multiply it by 100.
5. Unsubscribe Rate
Unsubscribe Rate is another metric that allows you to see how engaged your customers are with your email programme. According to different sources, when Unsubscribe Rate reaches 0.5%, you have to look into this. If you will leave it, your Delivery Rate may suffer – ISPs may flag you as a spammer, and this is the last thing that Email Marketer wants.
To calculate Unsubscribe Rate you take Unique Email Unsubscribes, divide them by Emails Delivered and multiply this number by 100.
6. Spam Complaint Rate
Spam Complaints is a metric that every ESP reports on. It is built in your standard reporting and it shows number of spam complaints, or number of people clicking on spam button if you like.
To calculate Spam Complaint Rate you take number of Spam Complaints, divide them by Emails Delivered and multiply this number by 100.
What is the power of more advanced KPIs?
There are more advanced KPIs that you should look into. Every metric above was very basic and they don’t give you a real value of your email programme, hence a short list below.
7. Real Click to Open Rate
As you know, some of your clicks will happen on Unsubscribe link, and these shouldn’t be counted in your business Click Rate. This metric is lower than Click to Open Rate, but it shows real value of your email programme.
To calculate Real Click to Open Rate you take Emails Clicks, reduce it by Unsubscribes, divide them by Emails Delivered and multiply it by 100.
8. Conversion Rate
We all know how important it is to convert your recipient and turn him into customer. There is no business that operates without looking into Conversion Rate. This is one of my favourite metric that shows full value of your hard working email campaign.
To calculate Conversion Rate you take number of sales, divide them by number of visitors and multiply it by 100.
My second favourite KPI is Return of Investment. It allows you to see if your email programme brings any money to your business. It is important to know what money margin your company is operating with. This metric it true winner among them all – you can’t neglect reporting on this.
To calculate ROI you take your money margin, reduce it by cost of your campaign and divide them by the same cost of your campaign. Number lower than 1 means, that it cost you more to run your campaign, to what you gain back.
10. Read Rate
Read Rate is another great metric that allows you to see how engaging is content of your campaign. You may noticed that your Open Rate is high, but your Click Rate is low. When you look into Read Rate you may notice that most of your customers opened the email but spend less than, let’s say, 2 seconds looking at it. To take a full advantage of this KPI, you will need external tools like ReturnPath or Litmus. Both of them good in their own way.
When you look into these numbers, don’t forget to break your stats down by different segments. It will help you to understand different groups of your customers a lot better. This is key to a successful Email Campaign.