With 4 billion people using emails every day, it’s no wonder why 78% of marketers are seeing an increase in email engagement every year. Email marketing has the potential to give a 4,200% ROI so, despite other campaigns growing in popularity, such as social media, it’s still one of the most viable and cost-effective methods of marketing out there. If you’re interested in starting up your own email marketing campaign, we’ll be taking a look at the different Key Performance Indicators (KPIs) you should be taking into consideration.
What is a KPI?
Key performance indicators typically represent the most important metrics you want to track so that you can improve them and work towards meeting your goals. KPIs are going to differ from company to company but we’ll be taking a look at some common ones that you should be looking at regardless of what your goal is.
Bounce Rate
This metric shows you what percent of your emails aren’t actually getting through to people’s inboxes. Sometimes it may be due to a temporary issue such as a full inbox or a server error but other times it may be due to an email being sent to a nonexistent address. It’s important to keep an eye on this metric because if your bounce rate is too high, your marketing efforts moving forward won’t be effective since you’re not reaching as many people, along with the impact that a bounce rate has on future deliverability.
Open Rate
Your open rate is the percent of emails opened compared to the total number of emails sent. This is a huge indicator of how relevant your audience finds your emails and lets you know if your subscribers are interested in what your company has to offer. Oftentimes, if you’re seeing that your open rate isn’t performing as well, it’s worth A/B testing subject lines and preview text to see if an alternative might be better. Your campaign should aim to appeal to your target audience so keeping this metric in mind will help you continue to optimize your emails. Ideally, you want to shoot for an open rate of over 20-25%.
Click-through Rate (CTR)
This is a percent of how many people are clicking on the links in your email after opening it. It’s great that they’re opening your email in the first place but without them actually going to your website, you’re losing out on customers potentially converting into sales. CTR is also a great indicator of how well your audience is receiving the content in your emails. Similar to performing A/B testing to improve your open rate, A/B testing the copy and design of your actual email would be worth doing if your emails were underperforming previously. As you track this metric, a good benchmark to aim for would be keeping your CTR higher than 3%.
Unsubscribe Rate
This is tracking the percentage of people who chose to unsubscribe from your mailing list. Don’t be alarmed if you start to see users opt-out of your emails. People unsubscribing from email campaigns is a common occurrence and sometimes their reason for unsubscribing is completely unrelated to the content of your emails. However, if you find yourself having a high unsubscribe rate, this would be a reason to take a deeper look into why that is. It could be that your emails aren’t giving your audience the value that they expected upon signing up or it could even be that your emails are being sent out too frequently. Every business is different so it’s up to you to figure out what your target audience needs in order for them to want to stay. For reference, unsubscribe rates typically hover around 2%.
List Growth Rate
This is the opposite of your unsubscribe rate. If you find that your list isn’t growing then it would be helpful to come up with ways to help your business gain quality subscribers. Some examples include referral programs, giveaways, or even providing a free tutorial. Depending on what your business is like, the best way to grow your email list would be something that caters the most to your target audience. A 3% growth rate per month is typically the average you should be shooting for.
Conversion Rate
Ultimately, the goal should be to get your customers to convert and boost your revenue. Your conversion rate lets you know how many subscribers are going through your entire funnel and completing the goal that you have in mind. If you have a high CTR but still don’t see many conversions, it may be worth testing your funnel to ensure there aren’t any obstacles that customers are encountering. Ideal conversion rates vary based on the industry but a good email conversion rate is typically seen as somewhere between 2-5%.
There are so many more email marketing metrics that you could track based on what works best for your business but these are just some of the ones we feel are important to track from our experience. Hopefully, if you were in the beginning phases of wanting to set up email marketing for your own company, this article has given you a little bit of insight into doing so.