Last updated on July 15th, 2020
There are a lot of people in the world and gaining most of their attention on one platform is almost impossible. As an individual, you’d be lucky to catch a few hundred thousand. However, as a company, your ultimate goal is to direct all attention to that said platform. Your chosen platform.
‘How do I do that?’ You might ask. It’s easy! It just involves planning and research. More specifically, research on your KPIS (Key Performance Indicators).
Think of KPIs as the grading system of a company. It’s used to measure how the project, product or activity is going and how successful it is.
Now, there are a lot of different KPIs that an online business owner has to look out for. However, before we can dive into those, we must first focus on the one that brings in the business: Email Campaigns.
Leveling up your email marketing strategy is no easy task. It takes a lot of time, dedication and quite honestly, it never stops.
In reality, email marketing lives and breathes data. Like any system, in order to function properly, it has to have the proper input for the right output. And this makes the right data all the more important to find.
Without the right data, it will produce the wrong metrics and subsequently sabotage your whole operation —usually by sending the wrong email campaign to the wrong demographic, over-sending it to inactive emails, or by just simply directing it to your customers spam box.
Crafting a successful email campaign strategy can definitely be a daunting challenge, but with the right measurements and tools, one can absolutely tame the email marketing beast and perfect their email campaign regime.
KEY PERFORMANCE INDICATORS (KPIs) TO LOOK OUT FOR
1. Inbox Placement Rate
You’d think that all the emails you send out gets delivered to your customer’s inboxes right? Not really. In reality, only about a certain percentage can actually be sent to the recipients’ inbox.
Unfortunately, there is no instance where in a 100% deliverability is possible. Sometimes, emails would either bounce or get sent to the spam folder; never to be received or seen.
While there is no exact reason for the rejection of the delivery, there are a few factors that can contribute to it. Sometimes the rejection is because of the email provider that was used to send the email. Sometimes it’s the words that’s included in the subject line and sometimes it’s just a case of violations to the GDPR or your email being considered spam.
Either way, it’s an irrefutable fact that there will always be emails your audience will not receive. That said, don’t worry, instead of looking at it as a loss, let’s look at it as an opportunity.
The opportunity to look at the email deliverability rate as a realistic number. How to do that is to divide the number of delivered emails with the number of sent emails and multiply it with one hundred. The result should give Inbox Placement Rate percentage.
Here’s a use case example:
Say your sent emails are about 110,000 and your delivered emails are about 95,000.
Following the formula of delivered emails divided by sent emails, times 100, we’d get an Inbox Placement Rate.
(95,000 / 110,000) * 100 = Inbox Placement Rate
Inbox Placement Rate = 86%
In the above example, it looks like out of 110,000 emails, 95,000 was received by the audience in their inboxes which means you have an IPR of 86%. Regrettably, it also implies that out of 100%, 14% did not receive the emails.
2. Open Rate
By chance or calculated planning, the email landed on the inbox folder. That’s great news, but that’s just the start.
It’s not enough to land on the inbox page, part of a successful email campaign would be to measure the Open Rate of a campaign.
The Open Rate of an email campaign strategy is a reflection of how many people clicked on the email and opened it up. The higher the Open Rate the more successful the email campaign; the lower it is, the more it needs improving.
Borrowing the delivery numbers from the earlier use case sample:
From the delivered emails of about 95,000, there were 93,700 open emails.
For the formula, you’d first take the emails opened, divide it with the emails that was successfully sent to the inbox (IPR) and then multiply that number it by one hundred.
(93,700/95,000) * 100 = Open Rate
Open Rate = 98%
With the 98% Open Rate, it looks like the email campaign has a high Open Rate percentage, which means that out of 95,000 people that got the email; 98% of them opened the email campaign.
3. Click-Through Rate (CTR)
Now, opening the email doesn’t mean automatically mean that the audience is interested in the offer. Sometimes they click on the email out of curiosity. Depending on the website’s goal, maybe that’s enough, but more often than not, companies would usually want their audience to click on the link that’s attached to the email campaign.
Clicking on the link means that the recipient is significantly interested in product/service or brand. They want to engage with the company, they want to learn more about it and the product/service offered. It goes without saying that the higher the rating for this criteria, the more positively acclaimed the campaign was.
The computation for CTR is number of link clicks divided by the number of emails opened and multiplied by one hundred.
Using the same example above, here is the breakdown of the Click-through rate.
Of the 93,700 open emails, 78,450 had clicked links.
With the formula of Clinked Links divided by opened emails, we’d get a click-through rate.
(78,450/93,700) * 100 = Click-through Rate
CTR (Click-through Rate) = 83%
Since the Click-through Rate is 83%, it looks like in this example there were approximately 15,250 who did not click on the link and are not interested in the offers present on the email.
4. Conversion rates
Conversion rates are when the recipient of the email, clicks on the link, opens it and subsequently finishes the desired action from opening the link.
Simply put, it is a calculation of how many people have seen the “call-to-action” (CTA) of the email, clicked on it, and proceeded to take said action.
With different companies available on the internet, sometimes the “call-to-action” presents itself in different ways. For an eCommerce business, it might be finishing up a purchase.
Whatever the case, so long as the CTA of the email was acknowledged, clicked and the action was fulfilled, it will generate a positive conversion rate from the email campaign.
With that in mind, one can calculate their Conversion Rate by taking the number of people who clicked on the link, and finished the desired action of the campaign, divide it with number of delivered emails and multiply it with one hundred.
The conversion rate should look like the following example:
95,000 delivered emails have 71, 900 conversions (through CTAs)
(71,900/95,000)* 100 = Conversion Rate
Conversion Rate = 75%
Even though all the email KPIs that’s discussed in this article are important, one should definitely take special notice of the Conversion rate KPI. For the purpose that the conversion rate KPI represents a more concrete statistic of how far or close your email campaign marketing is to its goal.
5. Unsubscribe Rate
All the KPIs discussed above are generally KPIs we want to keep in the high-numbered realm. It’s mostly because the higher the percentage rate the more it reflects favorably towards email campaign strategy. However, as much as we’d like to keep that as a norm, there are some KPIs that you want to score low.
One of them is the Unsubscribe Rate. From the term “Unsubscribe” it is the KPI that calculates the rate of people who choose to remove their email from your emailing list.
This particular KPI should be kept generally low since a high count would signify there is more loss than profit from the email marketing strategy that was sent out.
Additionally, it’s also good to keep in mind that people who willingly unsubscribe from email campaigns tend to not come back to the website or company.
Now, in order to calculate the Unsubscribe Rate, we’ll have to take the number of people who unsubscribed, divide it with the total emails delivered and multiply it with one hundred.
To further understand, please refer to the example below.
56,000 delivered emails have 12,476 contacts unsubscribe from the mailing list.
With that, the formula would be unsubscribed contacts divided by delivered mails.
(12,476/56,000)*100 = Unsubscribe Rate
Unsubscribe Rate = 22%
Looking at the Unsubscribe rate that’s presented, it’s immensely concerning since the normal rate for this KPI should only be 0.5%. However, it looks like about 22% of people opted to leave the emailing list and not receive any future emails.
Meaning that all 12,476 people found either that email campaign, the site, service or product irrelevant enough to possibly not want to come back.
6. Bounce Rate
Another KPI that generally should score on the lower side should be the Bounce rate of an email campaign.
We’ve mentioned before that there are times where in a customer does not get an email due to it bouncing, but what does it mean when an email bounces?
Well, there are two ways for an email to bounce: Hard bounce and Soft bounce.
Hard bounce happens when an email becomes invalid for any number of reasons and thus the system will not be able to send an email to the recipient. Hard bounces occur when the email address that was given is either non-existent, fallen out of use, or might have been outdated.
On the flip-side, a Hard bounce can also happen when the email domain where the campaign was used has a bad IP reputation or the email that was sent out has spam-like content.
Either way, those discussed above can all cause the campaign to not be delivered to the targeted email address.
On the other hand, Soft bounces take place on a more superficial circumstance. It can happen when the email server has temporary delivery failures due to the recipients email inbox being full or when the email server deems that the file is too big to send out.
Nevertheless, it emails that have soft bounced will be returned back to the original sender.
Say for example you have 225,000 delivered emails and got 14,000 hard bounces and 1,500 soft bounces.
The formula for the Bounce Rate of your email campaign would be the total of hard bounces and soft bounces divided by the number of emails you sent.
([14,000 +1,500] /225,000) * 100 = Bounce Rate
Bounce Rate = 6.89%
Take note that the expected Bounce rate for companies varies but it’s generally a good idea to keep your email bounce rate below 1%.
7. List Growth Rate
As the name implies, the List Growth Rate of represents the rate of how fast a company’s email subscription count grows. This KPI is important since it tells you how many new potential customers you’ve gained.
The more a company’s list grows, the more site traffic. The more traffic, the more potential visitors, customers and conversions.
Here’s a fun and practical example:
Your emailing list might have 150,000 contacts. 8,000 of these contacts are new subscribers, and 430 contacts have unsubscribed. In this list, your recent email campaign on this list had 120 invalid emails.
For this we are utilizing this formula: the number of subscribers minus the total sum of unsubscribe and invalid emails, divided by the list size and multiplying one hundred; you should arrive with the percentage of your list growth.
(8,000 – (430+120)/150,000) *100 = List Growth Rate
List Growth Rate = 4.96%
Every year there will be people who lose interest in your site or brand and will either stop visiting or unsubscribe. The average percentage is roughly estimated at 22% which means that it’s a good idea to clean out your email list from time to time.
8. Email Forwarding Rate
Like the List Growth Rate, the Email Forwarding Rate KPI will help generate active data of how many people are subscribing to your company. But unlike the List Growth Rate that gets its data from all avenues, the Email Forwarding Rate KPI is solely derived from referrals.
With every share/forward of the campaign comes with the potential of new subscribers, so it’s a good idea to keep an eye out for this KPI.
The measurement of the Email Forwarding Rate is the number of clicks of “Share this” /“Forward to a friend” from an email, divide it with the number of emails successfully delivered and multiplying it with one hundred.
Of the recent 70,000 delivered emails, 52,200 had been shared.
The formula or Email Sharing Rates are simple: Shared emails divided by delivered emails time a hundred.
(52,200/70,000)*100 = Email Sharing Rate
Email Sharing Rate = 74%
According to the Litmus study a successful email campaign should generate at least 1 forwarded email per 21 opened emails. Even though this is the case, it’s still good to note that the average forward rate as a general consensus for the forward rate is 0.02% across all industries.
9. Return on investment (ROI)
It’s no secret that in every email campaign that’s sent out, there is an equivalent amount of cost used for it. But how does one know if the cost was worth it?
This is where ROI KPI comes in. This is where one sees if all the effort, time, strategizing and optimizing their email campaign has paid off. A positive ROI means that the email campaign was successful, while the opposite implies that there might be some things that still needs tweaking in the process.
Computing the ROI of an email campaign varies from industry to industry but the general concept is that, the total money that’s gained from the investment minus it with the total cost of the investment, divide it with the cost of investment multiplied with one hundred.
A simplified example is to follow, but as a small note, in order for the computation to be accurate, all costs that lead up to the email campaign must be accounted for. (I.E. the salaries of the people who manage the campaign, the payment for the email domain(if any) from which the campaign is running, etc.)
Total Cost of Campaign is about $8,000, with the total gain being $79,000.
Showing the formula, it should look like this:
((79,000-8,000)/8,000) * 100 = ROI
ROI = 887%
With the ROI of 887% the gain per email should equate to $8.88 per 1 email sent, which isn’t bad considering that there are other factors that might have come into play into setting up the email itself.
How To Make Your Email Campaign More Successful
While there are a lot of ways to optimize an Email Campaign, in this article we’ll only be focusing on 4 key points that we think will greatly help improve your email campaign.
Clean Your Email list
Keeping your email list nice and tidy will go a long way. By removing inactive and unwanted emails from your email list, you will have made your List Growth Rate and Open Rate accurate and healthy, as well as decreased the possibility of your email being soft bounced by the system.
Cleaning out unwanted emails from your system will also decrease the possibility of being reported as a spam email. This is important since there will be recipients that will report your email as spam. It doesn’t seem much at first, but with enough reports, the email domain (Gmail, Ymail, Outlook, Hotmail) will start to recognize your email as spam and will proceed to redirect your email automatically to your customers spam folder.
When that happens, your IPR or Inbox Placement Rate will steadily decline and hence you’ll have a harder time reaching your audience in their inboxes.
Personalize Your Emails
One way to increase the success rate of your email campaign would be by personalizing your emails. Make sure to test out the emails you plan to send out, weave it to the appropriate audience and make it appealing.
For example an eCommerce store that sells lady garments, won’t want to include words like “musky”, or “tense”. Instead it’ll more likely advertise words like “soft”, “fragrant” or “milky”.
On the other hand, a subscription type of website, should generally stay away from words like “BUY NOW” or “BUY FOR”, since it doesn’t make sense due to the nature of their website. It creates a lot of unnecessary confusion that might turn away some potential customers. A more fitting phrase would be “Subscribe to” or “Subscribe for only”.
While the effects of personalization of emails might not be immediately apparent, rest assured that it is there. According to Experian Marketing Services study, personalized emails have 29% more unique open rates as opposed to non-personalized emails.
For when an email is personalized, it is less likely to be flagged as spam and instead more likely to generate a conversion.
Keep Your Content Engaging
On the bracket of personalization, it’s also important to keep email campaign as engaging as possible. After all, the email itself might be personalized, but if it doesn’t seem good, doesn’t look good, then chances are it’ll end up in spam or ignored.
Remember, first impressions last.
And for these cases, it might be important to put in engaging subject lines. As well as include a few photos of relevant items or services in the body of the email.
It’s important to keep your content engaging from the get go since according to Invespcro, about 47% of email recipients open an email from the subject title alone.
That said, when you have an engaging subject line, you’re already one step closer to a conversion.
Keep Your Emails Interactive
DemandGen studies show that 91% of B2B customers enjoy interactive content and visual content. Customers are more likely to enjoy and share an email when it has an interactive nature. Which is fair, since everyone wants to be entertained as well as feel included.
Luckily, there are a few ways that can help with that. An example of this would be to add a review or survey like aspect to your email campaign.
Adding a review or survey button to your email campaign will show the recipient that they aren’t just a number to and their opinion matters. Which it does, since their answers will most likely be integrated in the next campaign or at the very least highly considered.
Another example of interactive email marketing would be to put social media buttons in the email. Allowing social media buttons on the email campaign gives the recipient comfort. Easily accessible social media buttons in your email allow opportunities for potential customers to explore your company and business, which in turn will earn you their trust as they get to know you more in the social media circles.
The more they feel comfortable with the company, the more they trust a company, the more they are also likely to share it with their peers and associates.
Each day 269 billion emails are being sent out. Putting it into perspective, about 40 business emails are sent every day by just a single person. With that much competition presented, a small business owner will surely be intimidated.
Even so, that only means that in order to make it into the big leagues, you should not only know what KPIs metrics makes a prosperous email campaign strategy, but also know how to manipulate the KPIs to your favor.
Want to know how to get your email KPIs and how to implement them in your email campaign strategies? Connect with us at Kevy.