Measuring Email Effectiveness and Conversions – Important Metrics Defined
January 12, 2011
Do you wish you had magical powers to measure the effectiveness of your email marketing? Well, you really don’t need to join Hogwarts to be a wizard of email marketing. Some email metrics can help you evaluate the efficacy of your email campaign. These metrics will help you understand where you are going wrong and how to improve on those aspects.
Checkyour Email marketing performance with Email metrics Open Rate
Open rate refers to the number of people who have viewed your email, newsletter etc. An effective email campaign should be able to achieve an open rate of at least 30 to 45%. With the help of opt-in process, interesting content, best practices and newer subscribers, many companies can take the open rates to more than 50%.To calculate the open rate, divide total number of opened messages by total number of delivered messages. For a higher open rate, one needs to concentrate on “From”, “Subject”, text, images and layout. However, open rate is considered unreliable by many as the software cannot know, for sure, if someone has actually viewed the mail or not.
The total number of viewers clicking the links in your newsletter will give you the click rate. The Click-Through Rate or CTR is very important for conversions. CTR depends on a number of factors like subscribers, type of mail, links, relevance of the mail, frequency of mailing, opt-in process, use of personalization etc. As various factors are involved in determining the CTR, there is no standard benchmark. It gives you an idea about the subscriber’s interest and how successfully the interest is converted into click rate. CTR can be calculated by dividing total number of clicks by total number of delivered messages. The CTR usually remains between 1 and 10 percentage. Asking people to take action without involving money can get you higher CTRs.
Bounces give you the number of messages failed at delivery. Bounce can be divided into: hard bounce and soft bounce. A hard bounce is the message which does not leave the mail server as in the case when the recipient’s server is unreachable. A soft bounce is a message which returns to the mail server due to other reasons. When you observe frequent bounces, remove the subscriber from the email list. This will keep your list clean.
Conversion Rates/Response Rates
The surest way to test the effectiveness of your email marketing is to get the total number of subscribers who converted into a sale or a lead. This is known as acquisitions or Return On Investment (ROI). Response rate is calculated by dividing total number of favourable responses by total number of delivered messages. This is, by far, the best way to know the efficacy of your mailing efforts. Just opening the mail or clicking the links does not matter. What really matters is whether the subscribers do what you expect them to do. The response rate greatly depends on the action requested by you to the reader.
Another important email metric is the unsubscribe rate. This helps you to keep a track on how well you are able to hold the subscriber’s interest in the long run. If you do not provide engaging content to the readers, you will lose them. This unsubscribe rate is particularly useful in understanding the rate on investment if you are getting email list from an outside source. You get unsubscribe rate by dividing total number of unsubscribes by total number of delivered messages. This rate should be low, between 0.3 and 1 percentage.