Here are 7 email marketing KPIs you can investigate today to grow your business through email marketing
If you’re reading this, then you probably know the benefits of email marketing already. Email marketing has consistently demonstrated 10x+ returns for many different types of eCommerce businesses, such as those who sell on Amazon.
Let’s just get straight to the chase. In this article, I’ll be describing different email marketing KPIs you should measure in order to grow your business.
1. Open Rate
What is it? Open rate tracks how many email subscribers to your email list have opened.
Open rates are frequently used to measure A/B tested subject lines, since it’s one of the very few variables impacting a user to click into it. Of course, there are other factors such as deliverability, who the sender is, etc.
According to Mailchimp’s email marketing benchmarks, the average open rate of all non-labeled accounts is 22.71%. Different industries will have higher or lower open rates. For example, eCommerce email open rates are significantly lower at 15.68%, whereas non-profit emails have a 25.17% open rate on Mailchimp.
2. Click-Through Rate (CTR)
What is it? CTR measures the number of people who have clicked through the links in your email, regardless of the content or topic of the email.
Click-through rate is an indicator of the effectiveness of your content. This can be done either through value emails (such as a Black Friday sale with items 80% off) or amazing content (such as Morning Brew’s daily newsletter).
If you see single-digit CTRs, don’t fret. The average CTR is about 2.5%, according to Campaign Monitor. At Grab Digital, we’ve been able to get it around 3 – 5%.
However, it’s important to keep in mind that CTR doesn’t necessarily translate into sales. If you’re trying to send awareness emails (such as social campaigns), then CTR would be the right KPI to measure, but if you’re looking at your ROI from email marketing, then you should consider….
3. Conversion Rate
What is it? Conversion rate will determine how many people click on the link in your email and then complete a specific action.
For example, after the user signs up to your email list, you send them a 20% discount code in a follow-up email. The user then clicks into your store and makes purchases with the discount. This would be a classic example of measuring conversion rates.
Conversion rate is usually the most important metric when it comes to determining your ROI on email marketing. It can be especially useful when analyzing in conjunction with CTR. For example, if you have a high CTR and low conversion rate, then the problem may not be the emails, but rather your website or value proposition to your customer. If that’s the case, no matter how well your emails look, customers won’t be buying from your store, and you’d best put your marketing budget towards delivering a better product/service.
4. Return on Investment - ROI
What is it? ROI is a measure to determine whether your email campaigns produced a profit or loss. It’s calculated by taking:
The money in additional sales from the email campaign(s) – The cost of the campaign(s) / The cost of the campaign. Then, take this value and multiply it by 100 to get your ROI.
This is only a simplified approach to calculate your ROI.
As you probably know, ROI is going to be the most important indicator; however, it’s good to prime your manager if ROI is down for one month. For example, if your email marketing for one month is to drive users towards your social campaigns, then ROI won’t be as high, but that may be ok for your marketing team, as hitting sales figures were not your goal.
5. Bounce Rate
What is it? Bounce rate measures the number of subscribers who didn’t receive your email for one reason or another.
Usually, a bounced email has to do with having invalid email addresses. Invalid email addresses could be old email addresses users no longer operate, false and fake addresses, or email addresses typed out incorrectly.
Bounce rate is important because if you have too many bounced emails, then email service providers will start questioning your validity and there’s a higher probability of your emails flagged as spam going forward. It’s why at Grab Digital, we regular prune the email lists of our customers and get rid of bad emails. It’s a simple exercise that helps keep a list clean.
Before continuing, I’d like to talk about double opt-in and single opt-in quickly. Double opt-in is when a user puts their email address in an email capture form, and they must go to their emails, check for a new message, and click a button within that message to opt into your email list. Single opt-in is much simpler where a user puts their email address once, and that’s it. Once they do that, they’re part of your email list.
An important note is that double opt-in satisfies a core requirement for GDPR, whereas single opt-in can kind of (it’s complicated). On Klaviyo’s free plan, double opt-in is the only option available, and when it comes to marketers, there’s staunch debate on which is better.
We’ve seen blogs mention double opt-in as a method of eliminating bounced emails. We agree this is a good approach if the email address is essential to the platform, such as a SaaS platform where the user inputs their email each time to log in. However, for eCommerce websites, the drop-off engagement from double opt-in is significant. Only 80% of customers will go into their emails and opting in. You’ll potentially miss out on 1 in 5 of the emails, not to mention fake or invalid emails are not included in this statistic.
For eCommerce, at Grab Digital, we’re champions towards single opt-in, and if your business needs to satisfy GDPR, a checkbox that makes it explicit on what your email will be used for in the email capture form will suffice. We understand there may be deliverability issues, but if the emails are appropriately pruned, then this shouldn’t be a problem.
6. Unsubscribe Rate
What is it? The number of people who unsubscribe from your email list
The Unsubscribe rate is a double-edged sword. If users unsubscribe, this can be a good thing as they wouldn’t engage with your emails anyways. This can lead to higher deliverability and lower your spam score. On the flip side, this can mean you’re spamming the users too much, or the content is not relevant/provide enough value to the user. Additionally, it could mean you’re capturing many email addresses from users, but users are not receiving the type of content they expected.
Either way, it’s a good idea to keep an eye on the unsubscribe rate and pinpoint what’s the issue causing it.
7. List Growth Rate
What is it? The rate at which your email list is getting new subscribers.
List growth rate is important to counteract the natural decay rate of an email. According to Hubspot, the decay rate is about 22.5% every year. This means that about 1 in 5 subscribers will stop engaging with your emails over a year.
But why would this matter if they don’t engage with your emails? As long as they don’t unsubscribe, right? Not really. As said previously, if there are more unengaged emails, this can impact your deliverability and have your emails end up in spam. This is why we do email pruning exercises to remove inactive subscribers.
So, those are seven key email marketing KPIs you should keep always keep top of mind. There are other KPIs such as revenue per subscriber or mobile usage rates, but they’re more important to maintaining revenue via email marketing rather than growing your business.