A beginner’s guide to email marketing KPIs and metrics

This article explains how different KPIs can be used to track email marketing campaign performance, and also looks at some metrics beyond the campaign.

When tracking KPIs and metrics for email, it’s important to ensure they will map to the campaign’s objectives.

For example, if an email campaign is simply intended to raise awareness with no action requested, then open rate might be a satisfactory metric for monitoring performance, flawed though it is.

For a new product announcement with a call to action that asks readers to click to a landing page and purchase a product, the KPI should reflect conversions such as sales or total revenue.

KPIs can be measured by metrics that can be grouped into four categories:

1. activity metrics (also known as engagement metrics),
2. objective metrics,
3. business metrics,
4. and inbox performance metrics.

1. Email activity metrics

These are the metrics marketers most often report on. They are easy to obtain, usually in reports sent during and after the campaign. Primarily used as indicators, they might not (and often do not) reflect campaign objectives, which might call on metrics not available through basic reports from an email platform. They also do not deliver useful insights into campaign performance, customer preferences and other data beyond the open and click.

Some email activity metrics are as follows:

1a. Email clickthrough rate (CTR)

This is obtained by dividing the number of unique clicks (one click per email address) on links within the email by the number of emails delivered, before multiplying by 100 to get a percentage. What is considered high depends on several variables, including sector, quality of targeting, quality of copy, quality of calls to action, etc. Marketers should measure CTR over time to isolate, evaluate and optimise the impact of these different levers.

1b. Unique open rate

This is the number of unique opens of an email (one open per email address) divided by number of emails delivered, and multiplied by 100 to get a percentage. This KPI can be useful for measuring the quality of targeting and subject lines. It does not offer any indication of the quality of the email content or call to action. This is where metrics like CTR are useful.

1c. Click-to-open rate (CTOR)

The click-to-open rate measures unique clicks as a percentage of the number of unique opens, and as such can be more useful than a standard clickthrough rate or open rate in measuring the effectiveness of email content. In effect, this means marketers can judge how many recipients who read an email were interested enough to click through and complete an action. To measure, divide unique clicks by unique opens and multiply by 100.

1d. Response rate

Response rate refers to the number of actions resulting from the email campaign, expressed as a percentage of the overall total email volume sent and irrespective of take-up.

1e. Unsubscribe (opt out) rate

An ‘unsubscribe’ describes both a subscriber’s request to be removed from an email list as well as the act of removal. The rate at which people opt out of a mailing list is affected by the quantity, quality and relevance of the emails received, so it is important to track this metric over time. A sudden spike in unsubscribes might indicate that a marketing message was not well received.
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Some turnover in an email list is natural. 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.

1f. Unsubscribe rate of opens

Another useful metric to measure can be unsubscribe rate of opens, which measures the volume of list unsubscribes as a percentage of registered email opens. Therefore, it indicates the rate of turnover from recipients who have opened an email.

1g. Spam complaint rate

This describes the percentage of recipients who mark messages as spam or junk. This might be because they are confused about who the sender is and why they are receiving the emails, or perhaps because they are unable to find the unsubscribe link, or simply because they find the emails to be spammy.
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If brand emails receive an excessive number of spam complaints, future emails from the company – even to those who want to receive them – may be blocked or flagged by internet service providers (ISPs).
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According to email marketing tool provider ActiveCampaign, the industry standard acceptable rate for spam complaints is less than 0.1%, or one complaint for every 1,000 emails sent. Senders who generate higher rates will likely have a harder time reaching their subscribers’ inboxes.

2. Objective metrics

These objective-based metrics reflect campaign objectives for campaigns that aim to achieve more than awareness. They reflect subscriber activity but go beyond the inbox level to measure whether the campaign achieved its objective.

2a. Conversions

While the term ‘conversions’ tends to relate to completed sales in ecommerce, in email marketing a conversion can refer to any completed action triggered by an email. Examples include subscribing to a newsletter, downloading a mobile application, downloading a whitepaper or completing a survey. The conversion rate is therefore simply the percentage of email recipients who completed a desired action triggered by an email.

2b. Return on investment (ROI)

This is the ultimate metric of marketing performance. However, it is not the only indicator of success. ROI can be generated at campaign level or over a period to determine a more general ROI figure. Email service providers (ESPs) may offer tools that can provide their own analysis of email ROI.
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In broad terms, ROI is calculated by dividing campaign revenue by the cost of investment. This requires defining the following:.

• A conversion, for the purposes of the campaign. This can be a completed transaction, or some other conversion such as completing a form to speak with a sales consultant or downloading a whitepaper.
• The average monetary value of a conversion.
• The revenue generated by the campaign (defined as the number of recipients who converted multiplied by the value of each conversion).
• The investment cost of running the campaign.

3. Business metrics

Business metrics measure the results of an ecommerce campaign and should map back to the campaign objectives. They include:

• Total campaign revenue
• Revenue per email
• New leads
• Average order size
• First-time purchases vs repeat purchases
• Customer lifetime value

Accurate measurements for these metrics usually require that the ESP be closely integrated with an ecommerce or customer relationship management (CRM) system. They also should be tracked not just for one campaign but over time to indicate trends. This allows marketers to optimise their campaign emails or automations to correct problem areas.

A system of integrated platforms enables an automated flow of data and allows marketers to clearly evaluate campaign performance. Many ESPs as well as other platforms optimise their reporting using data visualisation in graphs and charts rather than raw numbers.

4. Inbox performance metrics

Inbox performance metrics measure how well the campaign performed at an ISP or mailbox provider such as Outlook, Gmail, AOL, etc. They measure whether campaigns are successfully reaching subscribers’ inboxes. (For strategies on optimising email deliverability, see Econsultancy’s report on Email Marketing Best Practice: Optimisation.)

4a. Deliverability (acceptance) rate

Delivery rate, or acceptance rate, refers to the percentage of emails that were successfully received by subscribers’ email servers, and did not bounce (get returned).

There are two main ways deliverability should be measured:.

• Returned email deliverability: This measures the volume of emails sent less the number of bounces (both soft and hard – see below) received.
• Inbox placement: This measures the volume of emails delivered to an inbox, rather than to the spam folder, and does not include those emails that are undelivered.

An example would be 100% sent, 1.7% bounced (hard and soft) = 98.3% delivered. If 97% of these delivered emails were placed into the inbox, and 3% were placed in the spam folder, then the inbox placement would be 97%.

As a metric, deliverability rate can reveal much about the quality of the data in an email address list and how those email addresses were initially acquired.

4b. 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 occurs when an email address is incorrect or does not exist. These addresses should be immediately removed from a list. A derivative of this metric is the average hard bounce rate, that is, the number of hard bounces divided by the number of emails delivered and multiplied by 100 to give a percentage.
• A soft bounce indicates a temporary delivery problem, such as an inbox being full or a server being down. A derivative of this metric is the average soft bounce rate, that is, the number of soft bounces divided by the number of emails delivered and multiplied by 100 to give a percentage.

Metrics beyond the email campaign

Email campaigns can have ripple effects across other channels and support initiatives beyond the immediate conversion goal. The following three metrics help marketers determine whether a brand’s email campaigns are helping achieve these broader business objectives:

Site traffic

As emails are frequently opened on mobile devices, it is possible that recipients open a message but do not visit the site until a later time, potentially on a different device. Marketers should track general increases in traffic after email distribution. While this is not a precise measure of email performance, it can indicate how well an email campaign drives traffic to a site even if a recipient does not open an individual message.

List growth

It is important to proactively try to grow the number of email subscribers, otherwise the list will atrophy as customers naturally move out of target segments. List growth can occur by encouraging customers to sign up at the point of an ecommerce transaction, through on-site sign-up widgets or social media campaigns, or even at offline customer contact points such as in-store kiosks or via printed collateral.

Brand awareness and affinity

Email campaigns as well as triggered and targeted campaigns are a useful way to maintain brand share of mind, particularly if the customer has not transacted for a while. Even customers who could be considered ‘emotionally unsubscribed’ (i.e. inactive but they have not actually clicked unsubscribe) could still either act as brand advocates or transact again in the future.
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Customer reviews, profiles of employees, information about using the brand’s products, and other non-promotional content can also build the emotional connections that keep customers interested in the brand even if they are not actively in the market to buy.
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While brand awareness and affinity is difficult to measure and more of a beneficial soft metric of email marketing, the importance of email to brand awareness should not be underestimated.

A summary of email marketing metrics (click to access larger PDF version)