We had a real case study with some real numbers as well – have taken out those slides.

Email Marketing doesn’t get talked about as often as the cool kids on the block – Social Media, Search, Display. It’s old, it’s been around since the beginning days of the internet, and not too many innovations seem to be coming up around it. However, any smart marketeer knows that email marketing is probably one of your best customer acquistion channels. From our experience, most direct marketeers spend at least 30% of their effort on email marketing.  So, keeping the coolness quotient issue aside – let’s talk about the top 7 email marketing metrics you should care about.

The email marketing funnel is something like this – Send out Email to your database -> (Delivery Rate) ->Mail reaches customers Inbox ->(Open Rate)-> Customer Opens the Email ->(CTOR)-> Customer Clicks on the Email ->(Bounce Rate)-> Customer reaches the landing page and looks at the content->(Conversion Rate)-> Customer takes a conversion action.

There are drop offs at each stage, and while optimizing your email campaigns, use this model to think about how you can improve things at each stage of the funnel. The terms in brackets are metrics at each of the funnel stages, that you want to improve. They are discussed below along with a couple of other important metrics.

Are you eliciting response to your email campaign efficiently ? Are you spamming users, or are you reaching out to a relevant set of audience who are interested in hearing from you? The first 3 metrics below help you answer these questions.

1. Delivery Rate - This is simply  (number of emails sent – number of emails which bounced)/ number of emails sent.  Unfortunately, the ideal formula for delivery rate should have been (number of emails sent – number of emails which bounced or went into junk folder)/number of emails sent. But we have no way of measuring mails which went to the junk folder. Use this metric to figure out whether you are reaching out to enough people in their inbox, in the first place. If your delivery rate is low, you may want to relook at your email list – is it too old ? Did you buy/rent the list from someone who hasnt maintained it well ? Is there something you can do to get fresh email addresses from your subscribers?

2. Open Rate - This is the number of emails opened/number of emails sent. Again, this metric is not accurate because many users open the mail in a preview pane or in email clients which disallow open-tracking 1×1 image pixels by default. However, you should monitor whether your open rates relative to your earlier campaigns to get a comparative sense of campaign response. If you are renting an email list from a vendor, check whether they are ready to offer you a per-open pricing. Rediff.com, for example, started selling their emailers to advertisers on a per open-rate basis. They can, however, do that – because most of their subscribers use the Rediff Web Email client, so open rate tracking is far more accurate than if you were to rent email lists from someone who is not a mail service provider like Rediff is, and hence has no control over the client.

3. Subscriber Retention Rate – Many marketeers just don’t look at this metric at all – neglecting this metric can mean you reach your short term objectives, while significantly hurting your longer term acquisition channel. This metric can be defined as the (no. of email addresses in database – no of. bounces – no. of unsubscribes)/no. of email addresses in database. Measure this over time, and throw a party if this ratio is increasing ! Grow the number of email addresses in your database, reduce the number of bounces and reduce the number of unsubscribes by avoiding spamming irrelevant offers – and you will remain the happy owner of a super performing email list. You dont need to look at this metric if you are renting out a list.

OK, so, you have optimized your email marketing process – and have increased your delivery and open rates, and are retaining most of your subscribers – but what happens after the subscribers open your message? Was your message relevant enough? What combination of various messaging elements works best for you? Is the quality of your email list good ? Thats where metric number 4 comes in handy.

4. Click to Open Rate – This is defined as (number of clicks/number of emails opened). A high CTOR means your messaging was relevant. Optimize your actual email to get the best CTOR possible by testing various combinations of  elements that you used to construct the email. It is better to use this metric than a CTR metric defined as number of clicks/number of emails sent, because using CTR makes it difficult to separate out the impact of deliverability etc. from the impact of messaging optimization. A low CTOR could also imply a disconnect between the subject line and the content of the email.

You sent your emails to the right people, showing them the right offers. But what happens once they click on your email and arrive at your site ? Did the campaign generate the end outcomes you were looking for ? Metrics 5,6,7 provide the answers

5. Bounce Rate - The same definition as the usual bounce rate from your web analytics software = ( number of visits from email campaign with one page view/ number of total visits from email campaigns). Please don’t confuse this with the bounce-back rate  related to email delivery. A high bounce rate is bad, and could indicate that your landing page proposition differed significantly from the proposition you made in your email. Measuring the bounce rate will help you optimize the landing page once a user clicks through on an email.

6. Conversion Rate – Simple. Number of Conversion/Number of Visits to website from Email Campaign. This is the usual conversion rate that we speak of while talking about web analytics.  Don’t forget to segment this metric across campaigns, geographies, page views, first time visitors v/s repeating visitors etc. And then, turn on the magic of Conversion Optimization

7. Average Revenue per Email Sent – Total revenue/Total Emails sent. This is a great dashboard metric to have – if you follow this metric for every email campaign, you will at least be sure of where you stand w.r.t productivity of your email campaigns. If productivity increases, expect to see improvements in your subscriber retention rate as well.

On a final note, do remember – most of these metrics once an email has been delivered, would actually require some time between when you sent the email blast out, and when the data is ready and representative. This is because these emails lie in the users mailbox for quite sometime ( some days for many users ) before they get acted upon. So, its always better to measure these metrics on email campaigns after providing enough time for your subscribers to actually open up their mailbox and read your emails.