Are you measuring the right metrics for your email marketing success?
In the last 3 years of handling complicated email issues for big brands, our group of email experts often have to deal with queries from misguided marketers. We find that sometimes a brand marketer is so obsessed about the basic email metrics like opens and the number of leads, that they get distracted from the bigger picture of their email marketing goals.
Tracking open rates and the number of sessions created are basic processes and are important to a marketer’s analysis, but are these the only ones to consider? Going a little deeper into your campaign metrics might reveal a lot more than just your openers.
An example is when we were consulting a certain brand on their email strategy. The marketer kept harping on about the high open rates they have achieved. But in retrospect, their bottom line was not improving despite the engagement. The problem being, the click-through-rate on their campaigns was low and the unsubscribes were increasing. They were actually in the midst of having 40% of their mailing list churning out each year. This is one of the many ways, obsession with the wrong metrics messes with your business revenue.
This is where we feel that alignment needs to take place between marketers and their business teams. If they have their key performance indicators (KPIs) chalked out, then there will be cadence on what impacts your business and what does not.
In this post, we make a case for a marketer to align themselves with their business objectives and then chalk out a strategy to achieve the right metrics for success.
So before anything else, a marketer needs to have clarity on what are their targets to achieve from the email program.
What are your business goals?
Map out business objectives and targets
The chief marketing officer (CMO) is the new profitability officer in any organization. They need to be in tandem with the business goals of the organization. They should also have their inputs on how to design a better marketing strategy so that it aligns with their overall business targets for the year.
Many times, we see a contradiction between what the brand wishes to achieve with their revenue goals and their email program which is not focused on those targets. When both work in collaboration, then the organization profits and marketing gains more traction due to both teams working for the same goals.
Align business strategy with marketing
The present pandemic crisis situation has created a bubble of drastic changes in customer buying habits and perspectives. This bubble can only be burst once the world is pandemic free but till the new normal persists. And it is definitely much different than the old times. How does your business deal with such economic shifts amid a crisis? They obviously have to re-organize their strategies and align their marketing teams to take a different path.
Example: a change in the language during promotions, shifting focus to new metrics and markets to consider, etc.
An instance could be a food-delivery brand, struggling to get some eyeballs on their email campaigns during the lockdown phase. With the extended lockdowns at an end, restrictions are getting uplifted gradually. In such a case, customer retention is the new acquisition for many industries including food tech. Thus, if the business strategy here is to improve revenue from loyal customers, then the CMO should also shift the focus to velvet rope marketing.
In this case, there should be a shift in metrics that matter like repeat transactions, returning customer revenue, rather than new customer gained and engagement achieved. This is a way one team needs to align with another to achieve the business targets which matter.
So we come to the point where a marketer has to have a good look at their email strategy and decide which metrics will matter the most in the long run...
Which are the right metrics to measure to achieve your success?
Metrics that define your marketing impact
Once the business and marketing goals are aligned then the right metrics need to be measured to derive the impact of the strategy. Oftentimes, basic metrics like open rates, the number of leads generated get too much attention from marketers.
A high engagement or leads generated from a prospect nurture campaign is supposed to signal that it has been a success. This behavior could mislead the marketer from shifting their attention from the main objectives of the campaign. There needs to be synchronicity in the end goals and the metrics to measure to declare your email program a success at the end of the year.
Some metrics that brands can measure the success of their email program:
- Conversion rate: It is the rate at which your audience decides to fulfil the objective of the campaign eg: increasing the signup rate, transactions, website sessions, clicks, etc.
- ROI / email: How much did one email campaign of yours cost you? Email is supposed to return $42 per $1 spent in an ideal scenario. Is this close to what you are achieving? If the goal is to increase your ROI margin for your marketing department then you have to focus on improving this metric. If the email does give you the best ROI then you can invest further into creating meaningful campaigns.
- Customer lifecycle value (CLV): What is the average purchase value of your customer and what is the frequency with which they transact on your website/app? This metric will answer these questions. If retaining a customer for the long term is your goal then you will need to track this metric and work on it.
- Cost per acquisition (CPA): How many conversions did you make out of the total users in your mailing list as against the cost you had to incur for creating the campaign. i.e. Campaign cost incurred / Conversions.
In this case, conversions can not only stand for transactions, orders, but also premium memberships, new sign-ups, etc. This metric will show the cost your marketing department is incurring which is getting your brand, new customers.
Underrated metrics to analyze your email program
Open rates as a metric in my view is overrated. It could easily indicate your users opening your campaign which triggers the image pixel inserted inside to track the open. But, there are a lot of instances that we have observed where the email does not load properly but still, it shows an open. There is a rise in cases of spambots that are being used to open and click on certain emails by ISPs. These could mislead and skew your results while analyzing.
While solving day-to-day deliverability related issues at Netcore, we have seen in some cases that a high amount of open rates generally corresponds to a high amount of spam complaints. High spam rates could damage your domain hygiene in a bad way to the point of being a show-stopper.
Every email you send should be valuable to your customer. Else, the high spam complaint rate pulls down deliverability as well as any scope for improvement in your email campaign performance. This shows you the folly for judging the success of your email campaigns just based on the customer engagement you receive.
If the increase in repeat transactions, an increasing number of orders per campaign, and ROI per email are your goals then just looking at open rates does not give you the bigger picture. In this case, you need to focus on improving certain email metrics that matter the most.
My advice to marketers here is to consider the metrics like click-through-rate, a number of conversions from your campaign from website tracking activity, churn rate per quarter, ROI-per-email. They will be vital in measuring the impact of your email program on the revenue you have been able to add.
Some deliverability metrics you need to consider:
- Spam complaint rate
It is calculated as “number of emails reported to spam / total emails delivered “. Ideally the spam complaint rate should be 0% for your emails, but anything higher than 0.1% is deemed lethal according to mailbox providers like Gmail.
- Unsubscribe number and the reason
The number of unsubscribes done by users is calculated against the total emails sent. As a marketer, you would want to reduce as many churned users as possible.
- Delivery rate
Often confused with deliverability rate. The delivery rate is actually the “number of emails delivered to mailboxes / total emails sent “. Some emails are not delivered due to numerous reasons by recipient servers. The delivery rate needs to be kept consistent at 99%+ as more emails you don’t deliver will be equated to mailboxes you miss out to reach.
- Bounce rate (soft + hard bounce)
Bounces are defined as emails which are rejected by recipient servers due to some reason and bounced back to the delivery server.
Generally bounce rate = ( Number of bounced emails/number of emails sent )
Soft bounces are email ids which cannot be delivered the emails due to their mailboxes being over quota.
Hard bounces are typically email addresses which are not valid and hence can’t be delivered to.
Read in-depth about the difference between hard and soft bounces
Soft bounces don’t necessarily cause any harm to your deliverability and hygiene of your email program but a high hard bounce rate is seen as a red flag by mailbox providers and hence can hinder the inbox rate of your email program.
All the above metrics need to be inspected in deep to provide insights on your customer behavior.
While you are tracking all of the above metrics to improve on the ROI, monitor your deliverability, it is the most crucial aspect of your email program.
Digging deeper into these will help a marketer come to conclusions on what’s working for their email program and what’s not.
Which brings us to the most creative part of being a marketer….
Test and experiment
- Experiment to see what works
Relentless testing and experimenting on new content ideas for email campaigns is a necessary tool to have a pulse on your audience’s tastes and interests.
We experimented with our own content newsletter recently, by introducing storytelling and basically weaving around an interesting theme through our blogs. The engagement and click rates shot up to double the average rates. This told us an important thing that experimenting is always a good option as if it works, it teaches you something new about your audience and brings you benefits. If it fails, there is always learning that needs to be carried forward.
We always see marketers falling into this trap of doing the old, boring promotional template design with an image and a CTA button when there are other different ways that could make a subscriber curious to check out your email. If it means, having a different email design, changing the font, colors, making sure that the campaign is optimized to load on all devices, having meaningful subject lines, doing A/B tests, etc.
Sometimes, a subscriber may not decide to make a huge transaction with one email campaign. In this case, send relevant contextual content to that user with some smart segmentation to nudge them ahead in the customer life-cycle journey.
Explore and research on what interesting stuff your competitors are doing with their campaigns and apply the same to yours.
- Find the root cause in case of below-par performance:
Despite all the above, if your mailing list shows sub-par performance, then it is time to go back to the drawing board and consider tweaking your email program. This depends on what business objectives are underperforming. The evaluation should consider what were the marketing tactics used and what needs to be changed or tested to apply in pragmatic ways.
Example: If there is a dip in clicks or click-to-open-rate (CTOR) rate, then your messaging needs to be made more relevant to the audience. It also calls for more personalized targeting rather than bulk emailing.
If the number of new sign-ups has suffered of late, then you can try moving the signup form to the top of the website. If the number of spam complaints has increased, then there needs to be a thorough examination of the sources of sign-ups and what is the productivity of the list.
Thus, a marketer needs to be more detail-oriented and stubborn to find the root cause of the issue. Match the under-performing metric with relevant data and figure out the gaps. At the same time, keep testing and keep hacking on what works!
Your marketing team needs to derive the KPIs from your strategy. Have a solid number-driven strategy to have a purpose for your email program. Track those metrics which matter and regularly monitor them to know if you are on the right track or need to do a course correction. Don’t indulge in the overrated metrics just to show some false sense of progress in your quarterly presentations. They won’t mean much to your brand’s profit margin.
The success of your email program should be measured from the above-mentioned metrics on a quarterly basis. You will then know if the campaigns have been a success or not. If the numbers are getting below the expected level then a marketer needs to apply their creative skills to get their email marketing program back on track.