8 essential email marketing KPIs and how to track them

What is a KPI? We hear you ask…

KPIs are used by organizations as a benchmark to evaluate the success of their marketing strategy against predefined targets. We’re talking email marketing metrics that help you make qualified decisions and identify activities that might need to be rethought. Meeting or surpassing defined KPIs could positively impact your email deliverability.

How do you choose the best KPIs for your business?

The hard part is choosing the right metrics and not succumbing to data paralysis. Follow these four steps and showcase your digital marketing know-how.

Step 1: Define your business objectives

If you don’t have clear business objectives, you won’t set email marketing KPIs. Remember, every action you take should help you achieve your KPIs and your organization’s objectives. For example, these could include selling a certain product, reaching certain marketing goals, and building brand trust.

Step 2: Set specific goals

With your defined objectives in mind, it’s time to create specific goals. To determine your goals, ask yourself and your team:

• What action should subscribers perform after receiving our emails?

• How are email marketing, audience segmentation, and automation helping us reach our goals?

Take these answers and look for common themes.

Possible specific goals could include:

• Higher email open rates

• Fewer spam complaints or a lower complaint rate

• Increased email deliverability

• Higher number of clicks

• Increased engagement on social media

• Building a customer database for marketing

• Serving as a leading resource community

Step 3: Set your KPIs

Now it’s time to set up specific email KPIs to measure your achievements. Think about what data will validate your goals. You might want to consider new sign ups per month, increased open rates, and the number of visits to your website. We could go on forever, but we won’t.

Step 4: Define KPI Targets

Once your KPIs are set, they each require an achievable target value. Setting concrete numbers will let you know if you achieve your targets. For example, 5,000 new customers, 250 sign ups per week, 30 percent open rate, etc. Quantifying your success can help you adjust your strategy accordingly.

The most essential email marketing KPIs to measure

We don’t want you to leave this article empty-handed. So let’s explore the eight most essential KPIs for any email marketing campaign, kind of like a cheat sheet on what you should keep an eye on.

1. Click-through rate (CTR)

A click-through rate (CTR) is the percentage of people who received and clicked on the links in your emails compared to those who didn’t.

How to measure CTR

Here’s the formula for calculating CTR: All clicks or distinctive clicks, divided by the total number of emails sent, multiplied by 100.

• Example: 8,640 total clicks ÷ 50,000 delivered emails x 100 = 12.28% click-through rate

What can affect the metric’s result?

Do us a favor: Contact any email marketer and ask them what their most important metric is. We’ll wait. Did they say CTR? We knew it.

Once you know your CTR, you can measure how your email marketing campaign performs over time and anticipate or make any changes accordingly.

How to improve the metric’s result

Marketers also use A/B tests, which compare two or more versions of an app, webpage, or even email copy, to determine which one will perform better.

Modulating CTR is an excellent method for creating different versions of your marketing emails with A/B testing. In other words, CTR can be used alongside A/B testing to help improve your email marketing results.

2. Overall return on investment (ROI)

Think of this as the amount of profit earned compared to how much your email marketing campaign costs you to create and deliver.

How to measure ROI?

Email marketers calculate this as total earnings divided by campaign cost. To put this differently, we take away the money invested in the campaign from the revenue generated from sales, divided by the total amount financed in the campaign, multiplied by 100.

• Example: ($36,000 in sales – $10,000 campaign investment) ÷ ($10,000 campaign investment) x 100 = 260% ROI

The higher the percentage, the more efficient and profitable the campaign.

What can affect the metric’s result?

How well your campaign performs can affect your ROI. Let’s say your engagement is way down, or your brand awareness needs work. You’ll have fewer conversions if your marketing efforts aren’t successful.

How to improve the metric’s result

You may consider throwing more money at the issue, but unfortunately, more money spent doesn’t always yield a higher ROI. We suggest using A/B testing and comparing different versions of your content.

Savvy email marketers like you can use ROI results to show your management how much budget is required.

3. Open rate

This is the ratio between the total number of email recipients and the number of people who open an email.

How to measure it

Calculate your open rate using the total individual opens, divided by the total number of email recipients, multiplied by 100.

• Example: (500 ÷ 50,000) x 100 = 1% open rate

What can affect the metric’s result?

Open rates can under report how often your emails are opened. The problem here is many (EMS) users have enabled an image blocker to protect themselves from fraudsters sending spam and other harmful content. Unfortunately, these safety measures also block images, and when they do, your emails don’t count as being opened, which lowers your open rate.

How to improve the metric’s result

Email marketers spend a lot of time messing around with their subject lines, trying to make them attract the coveted clicks. However, we recommend focusing on boosting open rates and their CTR instead.

4. Conversion rate 

Conversion rate is the percentage of the people who opened an email and performed a desired action compared to the total number of recipients. Examples of such an action could include filling out a survey, subscribing to an email newsletter, or purchasing a new product.

How to measure it

As you might expect, calculating this metric is relatively simple. Just take the number of recipients that performed an action, divided by the total number of emails you sent, multiplied by 100.

• Example: (3,600 ÷ 50,000) x 100 = 7.2% conversion rate

What can affect the metric’s result?

Simply put, the conversion rate is affected by the success rate of your call to action (CTA) and associated campaign. For example, if your goal is to boost subscription rates to build an email list, and your CTA says, “Sign-up for junk mail,” your conversion rate will inevitably be low. If your CTA piques your readers’ interest and they click through, you have yourself a conversion.

How to improve the metric’s result

A “conversion” can be counted as each desired action performed. In other words, each time your CTA succeeds, you can add a notch to your tally of successful conversions.

Therefore it’s not surprising that the conversion rate is often considered among the most valuable ways to measure the success of one’s marketing campaign.

We recommend a simple email platform and analytic web integration to improve this metric’s result. Doing this allows you to track every unique URL click stemming from the marketing emails you’re sending.

5. Unsubscribe rate

In email marketing, your unsubscribe rate refers to the relationship between the people who receive your emails and those who unsubscribe upon receiving them.

How to measure it

To determine how high or low your unsubscribe rate is, take the number of people who unsubscribe, divided by the total number of emails you sent out, multiplied by 100.

• Example: (50 ÷ 10,000) x 100 = 0.5% unsubscribe rate

What can affect the metric’s result?

The unsubscribe rate doesn’t give a complete and accurate picture of how healthy your email list is because some recipients are unengaged yet too lazy to unsubscribe.

How to improve the metric’s result

For these reasons, to improve your unsubscribe rate or increase its accuracy, you should focus more on your CTR and conversion rates. Doing so keeps your eyes glued to the general engagement of your email list and, in turn, will expose email list freeloaders, leading to much higher KPIs, including your unsubscribe rate.

6. Bounce rate 

Your bounce rate compares the total number of sent emails to the number of emails that weren’t delivered successfully.

How to measure it

To calculate your bounce rate, divide your amount of bounced emails by how many emails you sent in all, and multiply that by 100.

• Example: (50 bounced emails ÷ 5,000 emails sent) x 100 = 1% bounce rate

What can affect the metric’s result?

First, we should explain “hard” and “soft” bounces to take this metric to the next level. These adjectives describe how an email can bounce.

Soft bounces happen because of a short-term issue with the validity of a particular email address. If an email isn’t delivered to a given inbox because that recipient’s inbox is bursting at the seams with emails without any wiggle room to accept yours. In such a case, resending your email later might not result in a soft bounce.

On the other hand, hard bounces happen when an email can’t be delivered because the recipient’s email address doesn’t exist. These emails will never be delivered because you’re essentially sending an email to no one.

How to improve the metric’s result

To improve this metric, you should actively groom your email list and remove any inactive email addresses. Giving your email list regular TLC will help your bounce rate, but it will also help you avoid an internet service provider’s (ISP) blocklist. They use factors like your email sender reputation and bounce rate to decide whether or not to send you to the ISP blocklist.

7. List growth rate 

A list growth rate is pretty straightforward because it’s just an assessment of how much your email list has grown.

How to measure it

Calculating your email list growth takes the number of new subscribers you have at a given moment, subtract the unsubscribes or spam reports, divide by the total number of emails on your list, and multiply by 100.

• Example: (1000 new subscribers – 200 unsubscribes and complaints) ÷ (35,000 email addresses on the list) x 100 = 2.3% list growth rate

What can affect the metric’s result?

It might sound obvious, but your unsubscribe and bounce rates play a huge role in the size of your email list. While trying to maintain a consistent level of growth matters, when it comes to your list growth rate, engaged email recipients matter far more than the number of them on your list.

How to improve the metric’s result

Both your bounce and list growth rates will fluctuate over time. So it’s vital to keep an eye on your subscriber list. You want to maintain it regularly, so it’s the size you need to suit your needs.

8. Email sharing/forwarding rate

Basically, this is a way to measure organic growth among your email list subscribers.

How to measure it

To calculate this rate, you take the number of times a given email was shared or forwarded, divide it by the total number of emails successfully delivered, and multiply that number by 100.

• Example: (300 clicks shares/forwards ÷ 25,000 emails delivered) x 100 = 1.2% email sharing/forwarding rate

What can affect the metric’s result?

The rate at which your email recipients organically share your content is one of the more critical metrics in any email marketing campaign.

Organic growth means new, engaged users, clients, or customers. When they share your content with their personal and professional network, they’re likely to become new active members for you if they like your stuff.

How to improve the metric’s result

Stay on top of this metric to learn what kind of content is shareable among your audience. You’ll naturally become more in tune with your audience’s pain points.

Wrapping up

Keep your readers on your side by creating email campaigns that fit their needs. If you’re unsure where to start, there’s no harm in asking them what they’d like to see. What topics can’t your audience get enough of? What products and services do your customers want? People want to be entertained.

Test different types of interactive content like videos, animated pictures, polls, interactive maps, accordions, and more.