Whether you send a few emails to a small local audience or thousands of emails to a large, highly segmented list, the value of your email marketing will largely depend on your ability to analyze, compare, and act on the results you’re getting.
Even if you’re using an email marketing system, interpreting all those metrics like click-through rate, list growth rate, or overall return on investment can be challenging and time-consuming if you don’t have clear email marketing goals against which you can compare them.
It follows, then, that you should define your email marketing objectives early on, i.e. whether you want to grow your subscriber database, convert leads into customers, generate more leads, and so on. Equipped with that understanding, you can then discover the metrics that really matter.
Click-through Rate (CTR)
If you send 1,000 emails to your subscribers, and these generate 100 total unique clicks, then your click-through rate will be 100 total clicks ÷ 1,000 sent emails x 100 = 10%. An essential metric, CTR helps you determine how much engagement your emails are generating.
Regardless of the ultimate goal of your email marketing, the higher your CTR rate, the better, because it shows that people are reading your emails and are interested in what you have to say or offer.
Let’s imagine that those 1,000 emails you sent contained a link to a landing page where recipients could fill out a form (for lead generation purposes) for downloading a free e-book report, and that only 50 of the recipients actually completed that form. Your conversion rate would be 50 people who answered the call to action in your email ÷ 1,000 total emails sent x 100 = 5%.
The conversion rate is a measure of how effective your calls to action are, whether these are calls to download a digital document, register on a new website, provide feedback, or buy a product or service. Since most of your email probably features a call to action of some kind, a low conversion rate hints at an unconvincing campaign that may bring awareness about your brand, but not enough engagement.
List Growth Rate
This metric helps you determine whether your email list is growing fast enough. Because factors that contribute to your email list growth include, apart from effective email marketing, search engine optimization, social media marketing, and the online buzz your brand is generating, you can’t measure your list growth rate based only on the performance of the emails you are sending.
An accurate formula for calculating your list growth rate subtracts unsubscribers from the total number of new subscribers you’ve been getting over a period of time, say 30 days. For example: 200 new subscribers – 20 unsubscribers ÷ 7,000 total subscribers on your list x 100 = 2.5% list growth rate.
If one of the goals of your email marketing efforts is to broaden your reach, tracking your list growth rate is crucial.
Other important metrics you may want to track include the bounce rate, or the percentage of sent emails that don’t make it into the recipient’s inbox, email sharing rates (if you include social sharing buttons in your emails), and the overall return on investment for your email campaign.
Regardless of the aim of your email marketing campaign, looking at the crucial metrics above will help you make sense of the data and tweak your email marketing to obtain better results in the future.