Any marketer in the digital age understands the importance of data. Without it, it’s impossible to analyse email campaigns, review progress, and evaluate how effective your marketing efforts are in engaging your target audience. There’s hardly any corner of the digital marketing universe that doesn’t have rich data attached to it, and email marketing metrics are no exception. Despite its age as a communication tool, email remains one of the best ways to connect with consumers and deliver information that can impact both the customer and your brand. Data suggests that email provides an ROI of 122%, among the strongest of any major marketing channel used by ecommerce brands.
If you’d like to craft effective email messages and campaigns, it’s crucial to have a firm grasp on the data points that most clearly illustrate the power of your email strategy. There are dozens of metrics related to email marketing. Understanding the most important figures will help you obtain a high-altitude view of your campaigns and adjust your strategy to improve ROI, boost engagement, and increase revenue.
Let’s run through five of the essential email marketing metrics.
5 Most Important Email Marketing Metrics to Know
1. Conversion rate
The conversion rate is one of the most common metrics you’ll run into as an ecommerce marketer. It pertains to essentially every channel — display ads, social media posts, and email.
What is the conversion rate?
It’s the percentage of users who viewed an email, followed a link in the email, and then completed the desired action of the email. That action can be a purchase from an ecommerce shop, event signup, a form submission, or anything else that you want the customer to do to bring them further down the customer journey.
How do you calculate the conversion rate?
Divide the number of users who completed the intended action by the number of emails sent, then multiply by 100. Example: 120 conversions / 1,000 emails x 100 = conversion rate of 12%.
Why does it matter?
Conversion rate is the fundamental measure of how effectively your emails push customers to do what you want them to do. It’s a direct evaluation of the impact of your email campaigns.
2. Open Rate
This one is pretty self-explanatory, but that doesn’t make it unimportant.
What is the open rate?
Open rate is the percentage of emails that users clicked to read in their inboxes before deleting. It’s a simple measurement of how often your audience engages with your content.
How do you calculate the open rate?
Simply divide the number of opened emails by the number of total emails sent, then multiply by 100. Example: 3,500 emails opened / 20,000 emails sent x 100 = open rate of 17.5%.
Why does it matter?
You need to know how well your current email content strategy — primarily your subject lines, pre-header text, and overall brand presentation — convinces customers to do what you want them to do (in this case, opening your emails). Nothing else you do in your emails matters if customers don’t feel compelled to open and read them.
3. Unsubscribe Rate/ Email List Growth Rate
These two email marketing metrics are separate, but related figures illustrate how compelling your emails are and how your audience feels about your content and cadence.
What are the unsubscribe rate and email list growth rate?
Unsubscribe rate measures the average number of people who choose to unsubscribe from your email list after receiving your emails. Email list growth rate measures the pace at which new users are signing up for your email list.
How do you calculate the unsubscribe rate?
Unsubscribe rate can be calculated as an average over a spread of several emails or an entire campaign. Simply divide the number of unsubscribe requests by the number of recipients.
How do you calculate the list growth rate?
For this one, you’ll subtract the number of unsubscribing users from the total number of new subscribers, then divide by the total number of email addresses and multiply by 100. Example: (1,000 new subscribers – 80 unsubscribe requests) / 100,000 total email addresses x 100 = 9.2% list growth rate.
Why do they matter?
Ultimately, one of the primary goals of email marketing is to expand the size of your audience and reach more potential customers, boosting revenue and increasing engagement. These metrics will give you a picture of the overall health of your email list.
4. Bounce Rate
Bounce rate is another good metric for evaluating the overall strength of your email list. It can be the key to uncovering problems with your emails and resolving them so that more people receive your messages.
What is the bounce rate?
The bounce rate is simply the percentage of emails sent that did not make it to the inboxes of the intended recipient.
How do you calculate the bounce rate?
Divide the number of emails that bounced by the total number of emails sent, then multiply by 100. Example: 200 bounces / 5,000 emails sent x 100 = 4% bounce rate.
Why does it matter?
Simply put, you can’t convince customers to click on email CTAs, explore your website, and make a purchase if they aren’t receiving your emails. This could happen for various reasons, from full inboxes to spam filters to fake email addresses to typos in email addresses. Removing these addresses from your subscriber list will help you develop a cleaner email strategy and will help make your other metrics more accurate.
5. Overall ROI
One of the most critical email marketing metrics is your email strategy’s overall return on investment (ROI). This, along with conversion rate and list growth rate, should be a foundational metric to keep in mind while developing emails and campaigns.
What is overall ROI?
ROI in email marketing measures the return that you gain directly from your investment in email marketing. This equation requires you to know the revenue from email efforts and the costs associated with running those email campaigns. Understanding this figure will help you determine if you’re getting enough return on your investment in email marketing to justify your spending.
How do you calculate overall ROI?
(Net Profit / Cost of Investment) x 100
To get your Net Profit, take the Total Revenue earned from email marketing and subtract the total spent on those marketing activities (Total Revenue – Email Marketing Costs = Net Profit). To arrive at your ROI, divide the Net Profit by the Costs of your investment (Net Profit / Investment Costs) and multiply that amount by 100.
Email-Attributed Revenue $3000 – Email Investment $500 = $2500 Net Profit
Net Profit $2500 / Email Investment $500 = 5
5 x 100 = 500% ROI
In other words, a $500 investment in email marketing realised a 500% return on that investment, amounting to $2500 in net profits.
Why does it matter?
Marketing always comes down to ROI because it helps determine the success or failure of marketing efforts and prioritise your spending. Companies need an accurate measurement of how much return they are earning from each marketing channel and their entire marketing strategy. A low ROI may indicate that you need to change your email tactics or reallocate spending to more rewarding and cost-effective marketing channels.
Start Getting Results
There are dozens of email marketing metrics that are important for ecommerce sellers to understand, but a firm grasp of these five will help you get started with shaping an email strategy that fits your audience. A marketing platform can help you keep track of these metrics and many others, allowing you to track your campaigns, measure results, and make improvements on the fly to optimise your investment.