Econsultancy’s Email Marketing Best Practice Guide observes that email is the “unsung hero of digital marketing”. Far from dying out over the years (as has often been predicted), it continues to consistently drive high levels of traffic and conversion. 

In Econsultancy’s 2019 Email Marketing Industry Census, client-side marketers rated email as the number one digital channel for return on investment (ROI), with 73% of respondents rating email as ‘excellent’ or ‘good’.

But just how do you measure the performance of your email marketing campaigns? What metrics should you be tracking? If you’ve been running various campaigns with different content, subject line variations and goals, how do you know which ones are most effective?

In this piece, we’ll outline 14 key performance indicators (KPIs) for email marketing that you can use to track performance. Each of them will give you some indication of how effective email is for your business as a marketing channel.

Not all of them need to be tracked constantly, or will be relevant for your business, depending on what you aim to achieve with email. However, they should give you a steer as to where and how you can start measuring email marketing and what you need to look for.

1. Conversions

Although for the most part ‘conversions’ tends to mean completed sales, particularly with regard to ecommerce, in email marketing a conversion can refer to any action completed via the email that was sent out. For instance: a newsletter subscription, a mobile app download, a whitepaper download, a survey filled in.

The conversion rate is therefore simply the percentage of email recipients who completed a desired action after clicking on a link in your email.

2. Return on Investment (ROI)

This is of course the big metric that everyone wants to calculate. Tracking pure ROI is not the only way to measure the success of an email marketing campaign, and many email marketing campaigns have ‘softer’ goals that are difficult to quantify, such as brand awareness and lead nurturing. Nevertheless, below are some pointers on how to go about measuring email marketing ROI.

In broad terms, return on investment is calculated by dividing revenue (what you gained from running the campaign) by the cost of your investment. You would therefore need to determine:

  • What a conversion looks like for your email marketing campaign (as outlined above, this can be anything from a newsletter subscription to an app download or a contact form filled out)
  • The average value of a conversion to your business
  • How much revenue you’ve gained (the number of recipients who converted multiplied by the value of each conversion)
  • The cost of running the campaign, otherwise known as your investment.

This can be calculated for an individual campaign, or over a set time period such as a year to determine your average ROI from email marketing as a channel.

To make the legwork easier, there are also various stand-alone tools you can use to calculate email marketing ROI which simply require the relevant numbers to be plugged in – these can be found via a quick Google search.

3. Click-through rate

Divide the number of clicks on links within your emails by the number of emails delivered, then multiply by 100 and you have a click-through rate percentage. If it’s high, then it generally means your content is working and you have strong calls-to-action.

4. Open rate

This is the percentage of recipients who opened your email. The KPI itself doesn’t go deeper than that; it may just signify that your subject line worked. It doesn’t mean that your email didn’t go in the bin immediately afterwards or get marked as spam – but in theory, the recipient will at least have seen its contents first.

However, there are a few problems with relying too heavily on this metric to gauge email success. Email marketing software providers track open rates via a tiny, transparent image known as a tracking pixel that downloads when the email is opened, notifying the system that the email has been opened. The “opens” counted by your software reflect the number of times this tracking pixel has loaded, meaning that:

  • Many email clients, including Outlook and Gmail, disable images by default. If a user opens the message and reads its text but doesn’t enable images, it won’t show up as an open email
  • Recipients who opt for plain text emails will also not receive the tracking pixel, which can only be included in HTML emails
  • When images are enabled by default, this can register as an open each time the user clicks the email, even if it only shows up in the preview pane
  • Auto-responses, such as out-of-office replies, may be counted as opens by some less advanced email marketing software.

Some email clients such as Hotmail will also automatically open email as you scroll down your inbox, so again, it’s not terribly reliable as a sole metric for gauging email success.

Subscribers can browse our Open Rate by Industry benchmarks on Econsultancy’s benchmark tool to find out how your email open rate compares to the rest of your industry.

5. Click-to-open rate

The click-to-open rate (CTOR) can be more useful than a standard click-through rate – or open rate – in measuring the effectiveness of your email’s content, as it measures unique clicks as a percentage of the number of unique opens.

In effect, this means you can judge how many of the recipients who read your email were interested enough to click through and complete an action and learn more.

6. Language diversity

According to regular Econsultancy contributor Parry Malm, language diversity is “the killer metric for email subject lines that ‘experts’ don’t understand”.

Why? Simply put, humans are unpredictable, and the best way to account for this in your marketing is to embrace uncertainty. And experimenting with diverse combinations of words, phrases and syntactic structures is more likely to bring success than rigidly sticking to a tactic just because it worked yesterday.

For more information on this metric and the evidence that supports it, read Parry Malm’s article for Econsultancy, which contains a link to a Language Diversity Calculator that can measure the language diversity of your own email marketing.

7. Unsubscribe rate

The percentage of recipients who have had enough of your emails and have hit ‘unsubscribe’. The rate at which people opt out of your mailing list is impacted by the quantity, quality and relevance of your email marketing, so it’s important to track this metric over time. A sudden spike in list unsubscribes might indicate a particular marketing message wasn’t well-received by your subscribers.

Some turnover in an email list is, of course, natural – but how do you know when your unsubscribe rate is too high and needs to come down? What counts as a ‘good’ unsubscribe rate can vary by industry, but overall, an unsubscribe rate of 0.5% or below is considered normal, while anything under 0.2% is good. Econsultancy’s Performance Benchmarks tool (available to Econsultancy subscribers) collates unsubscribe rates by industry for you to benchmark yourself against.

Another useful metric to measure can be unsubscribe rate of opens, which measures list unsubscribes as a percentage of registered email opens – indicating the rate of turnover that comes from recipients who’ve actually opened an email.

8. Spam complaint rate

The number of recipients who hit the button marking your messages as spam or junk. This might be because they’re confused about who you are and why you’re emailing them, because they can’t find the unsubscribe link, or because they otherwise find your emails to be spammy.

Obviously, you want this to be as low as possible. If your messages receive an excessive number of complaints, it could result in future emails being blocked or flagged by ISPs, so that even people who do want to hear from you may not. According to Campaign Monitor, the industry standard rate for spam complaints is less than 0.02%.

Unfortunately, sometimes your emails don’t even need to be that ‘spammy’ for users to click the spam button; it’s sometimes just used as a shortcut to unsubscribe. The key is to make your subject lines as compelling as possible and not to bombard your recipients.

9. Delivery rate (Acceptance rate)

Delivery rate, or acceptance rate, refers to the percentage of emails that were successfully received by your subscribers’ email servers, and didn’t “bounce” (get returned). The delivery rate is calculated by dividing the number of emails sent by the number that were successfully delivered.

As a metric, it can reveal a lot about the quality of the data on your email address list and how you accrued those email addresses in the first place.

10. Bounce rate

The inverse of delivery rate is bounce rate, which calculates the percentage of emails sent that were not successfully delivered. Email “bounces” can be split into two categories: hard and soft.

A hard bounce happens when an email address is incorrect or doesn’t exist; these addresses should be immediately removed from your list. A soft bounce means that there was a temporary delivery problem, such as an inbox being full or a server being down.

11. Site traffic

As emails are frequently opened on mobile devices while on the go, it’s possible that recipients open your message read it, then visit your site later on another device or desktop. Look for general increases in traffic in the time after you’ve sent an email. It’s not a precise measurement – but can be an indication of general behaviour.

12. List growth

If you stick to the same email list, it will eventually shrink as customers naturally move away from your messaging and products. It’s important to continuously grow the number of subscribers you have.

This can be done through various incentives, from contests and cross-promotions to simple newsletter sign-up widgets on your site.

13. Total sales

If you’re in the ecommerce industry or otherwise have items for sale that you’re promoting via email marketing, don’t just measure the items purchased that were featured in the email: include all of the items that a customer proceeded to buy while on-site.

Similarly, if the items in the marketing email weren’t purchased but others were after clicking through, include these in your measurement.

14. Brand awareness

Emails are a fantastic way to keep your brand in a customer’s mind even when they haven’t purchased anything from you from a while. Even if your customer is “emotionally unsubscribed”, because they haven’t actually clicked unsubscribe, they may still buy something from you in the future.

While this is difficult to measure and is more of a beneficial soft metric of email marketing, the importance of email to brand awareness shouldn’t be underestimated – especially as it can later manifest itself as many of the other KPIs in this article.

Learn more

For more advice and actionable tips on how to get the most of your email marketing, subscribers can download Econsultancy’s Email Marketing Best Practice Guide.