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Email marketing is a valuable tool for businesses of all sizes. It lets you directly reach and communicate with your audience, build relationships, and drive conversions. But tracking and measuring your performance is crucial to effectively using email marketing.
Key performance indicators (KPIs) help you understand how well your email marketing campaigns are doing and identify areas for improvement.
According to a study by eMarketer, email marketing has an average return on investment (ROI) of 122%, which is four times higher than other marketing channels. Email is also the preferred method of communication for consumers, with 99% of people checking their email daily.
That's why it's never been a good time like now to strengthen your email marketing efforts.
This guide will cover key KPIs for email marketing you should be tracking for your email marketing campaigns, including open rate, click-through rate, and conversion rate.
What Is a KPI in Email Marketing?
A KPI, or Key Performance Indicator, is a metric that is used to measure the effectiveness of a marketing campaign or strategy.
In the context of email marketing, a KPI for email marketing can be used to track the success of an email campaign in terms of the number of sent emails, the open rate, the click-through rate, and the conversion rate.
By tracking these and other email marketing KPIs, businesses can better understand how their email marketing efforts are performing and make adjustments to improve the effectiveness of their campaigns.
Why You Should Track KPI for Email Marketing?
Whether you're tracking email open rates, click-throughs, or conversions, keeping tabs on these measurements can help you make informed decisions about how to proceed with your email strategy.
Tracking KPIs allows marketers to optimize their efforts and better target their audience. That said, here are some specific reasons why businesses should track KPIs for email marketing:
Measure campaign performance
Email marketing KPIs can help businesses measure the effectiveness of their campaigns.
The open rate, click-through rate, and conversion rate are all important KPIs that can help businesses understand how well their emails perform and whether they achieve their desired outcomes.
Identify areas for improvement
By tracking email marketing KPIs, businesses can identify areas where they need to improve their campaigns.
Low open rates might mean that the business needs to improve their subject lines or send emails at a different time. Low click-through rates could be due to poor email content or layouts.
Make informed decisions
Good email marketing requires making decisions based off of measurable success rates.
For example, if one type of email consistently performs better, the business can focus more on that email in the future.
Enhance customer engagement
Email marketing can help businesses improve customer retention and loyalty by identifying which types of emails are most engaging for their customers.
By tracking email marketing KPIs, businesses can tailor their campaigns accordingly.
Email marketing is one of the most cost-effective marketing strategies available, so tracking KPIs is essential to ensure campaigns generate a good return on investment.
By tracking KPIs, businesses can identify areas where they might be wasting money and adjust their spending accordingly to improve their ROI.
Tracking email marketing KPIs can help businesses optimize their campaigns, improve customer engagement, and make more informed decisions about their marketing efforts.
But what exactly should you be tracking? Let's take a closer look at the key KPIs for email marketing.
8 Email Marketing KPIs You Should Be Tracking
When it comes to assessing the performance of an email strategy, there are several KPIs to consider. Here are some of the most important email marketing KPIs you should be tracking:
Clickthrough rate (CTR) refers to the percentage of recipients who click on a link in an email. It is a key email marketing KPI that businesses use to measure the effectiveness of their email campaigns.
CTR is an important metric to track because it helps businesses understand how engaged their audience is with the content they send. A high CTR may indicate that the email content is relevant and engaging for the recipient, while a low CTR may indicate that the content does not resonate with the audience.
Several factors can affect CTR, including:
- Subject line,
- The sender's reputation,
- The email's layout, and design, and
- The content's relevance to the recipient.
On average, the CTR for email campaigns is around 3%, but this can vary widely depending on the industry and the specific campaign.
Tracking CTR is important for businesses because it allows you to identify what is and is not working in your email marketing efforts. Companies can optimize their email campaigns by analyzing CTR data to improve engagement and increase conversions. This can ultimately lead to increased revenue and customer loyalty.
In summary, CTR is a crucial KPI for businesses to track in email marketing because it helps them understand how engaged their audience is with their content and identify opportunities for optimization to drive more conversions and revenue.
Conversion rate refers to the percentage of recipients who take the desired action after receiving an email. This action could be clicking on a link, purchasing, or filling out a form.
Conversion rate is an essential metric for businesses because it helps them gauge the effectiveness of their email marketing campaigns and identify areas for improvement.
To calculate the conversion rate, you can divide the number of conversions by the number of email recipients and multiply by 100 to express the result as a percentage.
For example, if you send an email to 1000 people and 50 of them make a purchase, your conversion rate would be 5%.
Like CTR, a few key factors can impact an email campaign's conversion rate, including the subject line, the quality of the email content, the relevance of the offer to the recipient, and the design and layout of the email.
Here are a few tips for improving conversion rate in email marketing:
Personalize the email
Personalized emailshave a higher conversion ratebecause they are more relevant to the recipient. Use data such as name, location, and past behavior to tailor the email to the individual.
Make the offer clear and compelling
Make sure the offer in the email is easy to understand. Use strong, action-oriented language to encourage recipients to take the desired action.
Optimize the subject line
The subject line is the first thing recipients see, so it's essential to make it catchy and relevant. Use action-oriented language and keep it short and sweet.
Test and optimize
A/B testing can help you identify which elements of your email are most effective. Try testing different subject lines, email content, and offers to see what works best for your audience.
Use a clear and compelling call to action
A strong call to action is essential for encouraging conversions. Make it easy for recipients to take the desired action by using a clear and prominent button or link.
By measuring and optimizing conversion rates, businesses can improve the effectiveness of their email marketing campaigns and drive more valuable results.
Bounce rate is the percentage of emails that cannot be delivered to the intended recipient. This can occur for various reasons, such as a full inbox, incorrect email address, or the recipient's email server rejecting the email.
To measure bounce rate, businesses need to track the number of emails sent and the number successfully delivered. This can be done using email marketing software or through the use of analytics tools.
Bounce rate is an important metric for businesses because it helps them identify potential issues with their email list, such as incorrect email addresses or spam filters that are blocking certain emails. This can help them improve the accuracy and effectiveness of their email campaigns.
Reducing bounce rate is important because it saves businesses time, money, and resources. It also helps to ensure that emails are actually reaching the intended recipients, improving engagement and conversions.
To reduce bounce rate as a KPI for email marketing, businesses can follow these tips:
- Regularly clean and update their email list to remove invalid or inactive email addresses.
- Use double opt-in methods to confirm that email addresses are accurate and active.
- Monitor and fix any technical issues that may be causing emails to bounce.
- Test email campaigns to ensure they are compatible with different email clients and servers.
- Use subject lines and email content that are relevant and engaging to increase the chances of emails being opened and read.
By regularly tracking and improving their bounce rate, businesses can ensure that their email marketing efforts are more effective and that they are reaching their intended audience.
List Growth Rate
List growth rate measures the rate at which an email list grows over time. It is typically a result of dividing the number of new subscribers added to the list by the total number of subscribers on the list and expressing it as a percentage.
For example, if a business starts with 1000 subscribers and adds 100 more over a certain period, the list growth rate would be 10%.
List growth rate is an essential metric for businesses to measure in email marketing because it helps you understand how effective your email marketing efforts are at attracting new subscribers.
If the list growth rate is low, it could indicate that the business needs to reach more people or that its email marketing campaigns must resonate with its target audience.
On the other hand, if the list growth rate is high, it could indicate that the business is doing a good job attracting new subscribers and that its email marketing efforts are successful.
Several factors can impact the list growth rate, including:
- The quality of the email marketing campaigns,
- The relevance of the content to the target audience, and
- The frequency of email communication.
To improve list growth rate, businesses can focus on creating high-quality email campaigns that target their audience and deliver value to their subscribers. They can also experiment with different frequency levels to see which works best for their audience.
Email Sharing/Forwarding Rate
Email sharing/forwarding rate is a metric that measures the number of times an email is forwarded or shared with others by the recipient.
You can calculate this by dividing the number of emails that have been forwarded or shared by the total number of emails that have been sent.
If a high percentage of recipients are forwarding or sharing the email, it could indicate that the content is valuable and relevant to the recipient's network. This can increase brand awareness and potentially even more sales or leads.
Like other KPIs for email marketing, several factors can impact this email marketing KPI including:
- Subject line
- Email's content
- Email's design and layout
- The email's overall relevance to the recipient
To improve the Email Sharing/Forwarding Rate as a KPI for email marketing, businesses can consider the following tips:
- Create compelling subject lines: A subject line that is interesting and relevant to the recipient is more likely to be opened and shared.
- Personalize the email: Personalized emails are more likely to be opened and shared, as they feel more tailored to the individual recipient.
- Make it easy to share: Include social media buttons or a "forward to a friend" button in the email to make it easy for recipients to share the email with their network.
- Use high-quality, relevant content: The content of the email should be valuable and relevant to the recipient to increase the chances of it being shared.
- Test and optimize: Regularly test and optimize different elements of the email, such as the subject line, content, and layout, to improve the Email Sharing/Forwarding Rate.
Overall ROI, or return on investment, is a measure of the profitability of an investment or campaign. It is calculated by dividing the net profit generated by the investment by the total investment cost and expressing the result as a percentage.
For example, if a business spends $1000 on an email marketing campaign and generates $1500 in revenue, the overall ROI would be 50%. This means that for every $1 invested in the campaign, the business received $1.50 in return.
Overall ROI is a key performance indicator (KPI) for businesses because it helps you understand the effectiveness of your marketing efforts and allocate resources accordingly.
It is crucial for you to measure overall ROI in email marketing because it can help you identify which campaigns are most effective and allocate your resources accordingly.
There are several ways to improve overall ROI in email marketing. Some tips include:
- Segmenting your email list: By segmenting your email list, you can send targeted, relevant messages to specific groups of subscribers. This can improve the chances of your emails being opened and acted upon, ultimately leading to a higher overall ROI.
- A/B testing: A/B testing allows you to test different versions of your emails to see which performs better. This can help you optimize your email marketing efforts and improve overall ROI.
- Personalization: Personalizing your emails with the recipient's name or other specific details can improve engagement and increase overall ROI.
- Optimizing subject lines: The subject line is the first thing your subscribers see, so it's essential to make it catchy and compelling. Testing different subject lines can help you find the one that works best for your audience.
- Analyzing and tracking results: It's essential to track the results of your email marketing efforts and analyze them to identify areas for improvement. You can optimize your email marketing strategy and improve overall ROI by analyzing open rates, click-through rates, and conversions.
Open rate is a key performance indicator (KPI) that measures the percentage of emails that recipients open. It's a result of dividing the number of emails opened by the total number of emails sent and expressed as a percentage.
Open rate is essential for businesses running email campaigns because it helps them understand how effectively their emails engage their target audience.
A high open rate suggests that the subject line and sender name are compelling enough to encourage recipients to open the email. In contrast, a low open rate may indicate that the email is not relevant or interesting to the recipient.
According to industry statistics, the average Open Rate for business emails is around 25%. However, this varies significantly depending on the industry, with some sectors experiencing much higher open rates while others need help to get their emails opened.
There are several factors that can impact open rate, including the quality of the email list, the subject line and sender name, the timing of the email, and the relevance of the content.
To improve open rate as a KPI for email marketing, businesses should focus on building a targeted and engaged email list, crafting compelling subject lines and sender names, and sending emails at times when their audience is most likely to be engaged.
They should also ensure that the content of the email is relevant and valuable to the recipient.
By following these tips and regularly tracking and analyzing their open rate, businesses can optimize their email campaigns and improve their overall email marketing performance.
Unsubscribe rate is the percentage of recipients who choose to unsubscribe from an email list after receiving an email campaign. You can calculate this by dividing the number of unsubscribes by the total number of emails sent and multiplying by 100.
Unsubscribe rate is an important KPI (key performance indicator) for businesses running email campaigns because it measures the effectiveness of the email marketing strategy.
According to SmartInsights, the average unsubscribe rate for email campaigns is between 0.1% and 0.5%. However, this rate can vary greatly depending on the industry and the quality of the email list.
For example, the unsubscribe rate for a B2B (business-to-business) email campaign may be higher than a B2C (business-to-consumer) campaign because B2B recipients may be more selective about the emails they receive.
There are several ways businesses can improve their unsubscribe rate as a KPI for email marketing. These include:
- Segmenting the email list: By segmenting the email list based on characteristics such as demographics, location, or past purchasing behavior, businesses can send more targeted and relevant emails to specific groups of recipients, which may reduce the unsubscribe rate.
- Testing subject lines and email content: A/B testing different subject lines and email content can help businesses determine what resonates with their audience and leads to higher engagement.
- Limiting the frequency of emails: Sending too many emails can lead to unsubscribes, so businesses should consider limiting the frequency of emails to a frequency that is appropriate for their audience.
- Adding an opt-out option: Allowing recipients to opt out of future emails can help reduce the unsubscribe rate by allowing recipients to unsubscribe without feeling trapped.
- Offering value in the emails: Ensuring the emails provide value to the recipient can help reduce the unsubscribe rate by making the emails more engaging and relevant.
In summary, the unsubscribe rate is a critical KPI for businesses running email campaigns because it measures the effectiveness of the email marketing strategy.
By segmenting the email list, testing subject lines, and email content, limiting the frequency of emails, adding an opt-out option, and offering value in the emails, businesses can improve their unsubscribe rate and increase the success of their email marketing efforts.
How Can You Track an Email Marketing KPI?
There are several key performance indicators (KPIs) that you can track to measure the effectiveness of your email marketing campaigns. These include:
- Open rate
- Click-through rate (CTR)
- Conversion rate
- Bounce rate
- List growth rate
- Sharing/forwarding rate
A customer relationship management (CRM) system can help you track and manage these email marketing KPIs by storing data about your email campaigns and customer interactions in a central location.
This makes it easier to analyze and understand the effectiveness of your campaigns and can help you identify trends and areas for improvement.
You could also use a CRM to segment your email list based on customer behavior or preferences and tailor your campaigns to specific groups of customers.
Additionally, you could use a CRM to track customer interactions with your emails, such as clicks or purchases, and use this data to personalize future campaigns or improve customer service.
Can Tracking a KPI in Email Marketing Improve ROI?
Tracking a key performance indicator (KPI) in email marketing can improve return on investment (ROI) in several ways.
- First, tracking a KPI allows marketers to measure the effectiveness of their campaigns and identify areas for improvement.
- Second, tracking a KPI allows marketers to optimize their campaigns based on data.
- Finally, tracking a KPI allows marketers to set goals and track progress towards achieving them. This can help marketers understand the impact of their campaigns on the business and make decisions about where to allocate resources.
A customer relationship management (CRM) system can also help with tracking a KPI in email marketing by providing a centralized location for storing and analyzing data.
This can make it easier for marketers to track and analyze multiple KPIs, as well as compare data across campaigns and channels.
A CRM can also help marketers segment their email lists based on customer behavior and preferences, which can help improve the relevance and effectiveness of campaigns.
If you're not tracking any email marketing KPIs, you should start today. By measuring the success of your campaigns in terms of opens, clicks, and conversions, you can make data-driven decisions about improving your strategy.
A customer relationship management (CRM) system like Ringy CRM can help with this by providing a centralized location for all your email marketing data.
Not only will this allow you to track multiple KPIs at once, but it can also help with segmenting your email list and personalizing your campaigns. Ready to get started? Try Ringy CRM today!