Email marketing remains a crucial part of the digital marketing framework. Within the context of inbound marketing, it's the core messaging tool to help you nurture your new leads toward becoming sales-ready.
The success potential of email marketing
There is some debate on whether email marketing is an inbound or outbound marketing tool. The former describes sending emails to potential customers who have actively requested information from you, while the latter refers to 'cold' emails sent to an audience that doesn't expect to hear from your business.
Technically, email can function as either. But to maximise your results, inbound will always work better. Naturally, recipients who expect to hear from you and have already indicated their interest will be more likely to open, read through, and convert from your emails. That's why three-quarters of companies who prioritise inbound emails believe it provides 'excellent' or 'good' return on investment.
Think about the process from your audience's perspective. They just read a great blog post, and have decided to subscribe to future updates. Now, they're in your database as a prospect you know to be interested in a subject. Your emails can provide them with further information on that subject, improving your credibility in their eyes and subtly nudging them to become a customer over time.
To make that happen, you need to know your email efforts are actually working. In other words, you need to track just the right email marketing metrics to track your success, and make adjustments where needed.
Unfortunately, too often, that doesn't happen. In fact, according to one study, only 23% of marketers have integrated email and website metrics to gather true success and ROI data.
“15% of marketers surveyed say their company still does not regularly review email opens and clicks; only 23% say they have integrated their website and emails to track what happens after a click” MarketingProfs, 2016
(Source: https://www.hubspot.com/marketing-statistics)
Don't be among the majority of marketers getting it wrong. Instead, leverage these 5 key performance indicators, ranked by importance.
1) Delivery rate
Most articles you'll read about measuring the success of your emails come down to some of the KPIs we discuss below. But none of them matters if you don't get your delivery rate right.
In short, this metric considers how many of the emails you send actually make it to your recipients' inboxes. A lower delivery rate means fewer people will see your message. And if it drops below a certain point, email clients can actually penalise you by redirecting your messages straight to your audience's spam folder.
Three variables can affect your emails' deliverability rate:
- Hard bounces, or emails sent to addresses that no longer exist.
- Soft bounces, or emails that aren't delivered because of a temporary problem such as a full inbox.
- Prior spam reports by your audience who does not consider your emails to be legitimate messages.
To avoid significant penalties down the road, aim for a deliverability rate of 95% or above. At the very least, stay above 90%. Once it drops closer to 80%, your email marketing efforts and success could be in serious trouble.
2) Conversion rate
If deliverability is the baseline, conversion rate is the end goal of your email marketing strategy. You might already know about some obvious metrics, like open and click-through rate. They are undoubtedly important, but none of them matter if the attention and action your message prompts doesn't lead to completion of a marketing goal.
That marketing goal might look very different depending on your larger objective. A conversion might be anything from a lead via a form on your website to an actual purchase from your online store. Either way, the percentage of people opening your email who actually take that final conversion step should be your core success metric.
Platforms like HubSpot allow you to connect your email links and calls to action directly to conversions. By calculating the conversion rate, you can better understand which of your message work, and which don't. Driving up this metric over time will become one of your central success and improvement benchmarks.
3) Open rate
Within the context of your emails, open rates matter for a simple reason: little is possible if your recipients don't at least read your message. A high open rate leads directly to more click and conversion opportunities. It is the number of people actually receiving your email who decide to open (and hopefully read) it.
Open rates can vary drastically based on your industry and target audience. Entertainment-related emails approach 50%, while messages about software cannot even reach 30%. As a general goal, try not to let your emails drop below 25%.
Your open rate is directly connected to the sender, the subject line, and the audience's familiarity with your business. The sender should be personal and familiar, while the subject line needs to promise clear value. Nurturing emails to existing leads will perform better than 'cold' messages to an audience that has never heard about you.
4) Click-through rate
The percentage of people who click on one of your emails is known as the click-through rate. Crucially, this metric is not calculated as a percentage of email opens, but total recipients. You can use it to determine the effectiveness of your actual message content, both written and design.
Similar to opens, your desired click-through rate can differ drastically based on the context in which your business operates. Aim for a minimum of 4%, although some industries can average as high as 8%.
Achieving a high click rate is closely related to the content of the message itself. Look to stay consistent, and make enticing but realistic value promises. The focus of your email should always be singular, with a clear 'next step' that is connected to your conversion goal and expressed in the form of a call to action button. Text and visuals should be optimised to be readable on mobile devices as well as desktop computers.
5) List growth rate
Finally, don't be afraid to track your marketing metrics beyond individual emails, as well. Your list growth rate is the speed at which your list of recipients actually grows. According to HubSpot, it can be calculated with this formula:
List growth rate formula
([(Number of new subscribers) minus (Number of unsubscribes + email/spam complaints)] ÷ Total number of email addresses on your list]) * 100
The average email list decays by more than 20% every year, thanks to unsubscribes and bounces. Tracking your growth rate helps you make sure that each email you send actually has a sizeable audience to take action.
Finding your way from email metrics to email marketing ROI
All the above are important metrics to track. None of them, of course, tell the whole picture. The ultimate goal of your email marketing strategy should not just be to get the best possible open rate, but to leverage the tactic into comprehensive marketing success and business growth.
In other words, you need to make the leap from email marketing metrics to email marketing ROI. That can be difficult, although the conversion rate factor outlined above already takes the first step. Another might be to work with a partner who can help you track true ROI and monetary value of your emails via a proven process and an integrated inbound marketing solution. Contact us to learn more about a potential partnership, and find ways to maximise the success of your email marketing and inbound marketing efforts.
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