Editor’s Note: This article was originally published by Web Marketing Today. Practical Ecommerce acquired Web Marketing Today in 2012. In 2016, we merged the two sites, leaving Practical Ecommerce as the successor.
While email-marketing metrics are hugely important, they can also be confusing. Even the word “metric” is more complex than it needs to be — metrics are simply measurements. We’re interested in metrics because they give us a way to find out if our emails are getting better or worse, and what we can do to improve them.
So here is an email-marketing refresher that can help you both understand the basics and apply some advanced tactics, too. These are the eleven most widely tracked and referenced email-marketing metrics, ranked by how essential they are.
1. Open Rates
Open rate refers to how many people opened your email message. It’s not too complex on the surface, but it does get murkier from there, because some email clients — Yahoo, your iPhone — automatically open emails, thus skewing this measurement. Other email clients do not automatically load images, and because open rates are tracked with an impression pixel (a 1×1 pixel image), if images aren’t downloaded, then the email isn’t measured as having been opened.
So if some email clients show emails as being opened when they weren’t and other email clients don’t show the email as being opened even though it was, how can you know anything? It’s an excellent question.
The best answer is this: Use it for comparison. So if your email open rates last quarter were 20 percent, and they’re 30 percent now, you’re doing better. Or look back over the emails you’ve sent in the last 3 months. Which five of those emails had the highest open rates? Is there any commonality between those emails? If there is, consider doing more of that, because clearly your subscribers like it.
The most common question about open rates is “What’s a good open rate?” The answer depends on your industry, but generally an open rate of 20-to-30 percent or more is good. Pat yourself on the back if you’re clearing a 40 percent open rate, and mark yourself as a could-be-guru if you’re getting better than 50 percent regularly. Don’t panic if your open rates are in the teens, because for some niches, like marketing consultants or ad agencies, that’s average.
For tips on how to improve your open rates, see “11 Ways to Improve Email Open Rates,” an article I wrote earlier this year.
2. Click-through Rates
These are also pretty simple to understand. If someone clicks one of the links in your email message, you’ve got a click. The click-through rate, measured as a percentage, is how many recipients out of one hundred clicked somewhere on your email message. If 25 out of 100 people clicked, you’ll have a 25 percent click-through rate.
So what’s a good click-through rate? Once again it depends on your industry, but anything over a 10 percent click-through rate is decent. If you clear 20 percent, be proud.
There are a number of ways to improve click-through rates. The most obvious is to make your email messages mobile friendly — i.e. responsive — because there’s no better way to kill click-through rates than to have half your emails be unclickable and even unreadable. Another way to help click-through rates is to make the buttons and links larger, so those of us with normal sized hands can click on your email via our phone — and possibly while we’re walking.
There is a variation on click-through and open rates that is fairly common and can be quite helpful. It’s called the “click-to-open rate.” Click-to-open rate refers to how many people who opened your email also clicked on it. If you’ve got a weak open rate, but a strong click-to-open rate, it suggests your email’s subject line was a little weak.
3. Unsubscribe Rate
This is how many people out of 100 unsubscribed from the email message you just sent. Each email has its own unsubscribe rate. Unsubscribe rates are best kept to about 0.2 percent, though marketers who mail very frequently or to less responsive lists may see unsubscribe rates reach into .05 percent range. What you should look for is a spike in unsubscribes — it’s a clear sign you sent an email your readers didn’t like.
4. Hard Bounces
If you ignore hard bounces, it can get you in trouble. Hard bounces (as opposed to soft bounces) happen when you’ve sent a message to an email address that no longer exists. The major ISPs — as in Gmail, Yahoo, Hotmail — monitor hard bounces closely.
You should remove people from your list after even one hard bounce. Some email service providers will do this for you, but don’t sit back and wait for them to act: Be responsible for your own list.
The penalty for not removing hard bounces is mostly a reduced delivery rate. That doesn’t sound like much until you consider this –either you remove those email addresses with hard bounces, or 10 to 20 percent of all your emails could stop getting delivered.
5. Soft Bounces
Soft bounces occur mainly when you send an email to an inbox that is full. As soon as that person deletes a few emails, they’ll get your new email.
Soft bounces often result from people signing up for your list with junk or “disposable” email account. According to HubSpot, the marketing platform, 58 percent of us have and regularly use a separate junk inbox. It’s an account typically used entirely for commercial email messages, or for email messages the subscriber feels are less important. These email accounts are, in a sense, not someone’s real email address, but something they use when they have to give up their email address to get something, such as free reports or placing an order.
Soft bounces aren’t something you need to get too alarmed about, or to make a project of. Aim for less than 1 percent of every campaign you send to generate soft bounces. Pay attention if more than 2 or 3 percent of your list is regularly creating soft bounces. It might be time for a little list hygiene.
6. Earnings per Click or Earnings per Email
This is a less-discussed measurement, but actually one of the most important. You need to tie your email marketing efforts to specific goals, whether that’s placing an order or filling out a request for a quote. Knowing how much income your email marketing is generating is essential for a profitable business. You should track it just like you measure and track the profitability of your pay per click efforts, or anything else you do.
Fortunately, this is fairly easy. Most email service providers offer a way to specify goals, so you can get reports that clearly and easily show you what’s profitable and what’s not.
7. Delivery Rate
I touched on this earlier, regarding hard bounces. Some companies make a project of deliverability, and utilize third-party vendors to improve it. Other companies just seem to follow basic best practices and do fine.
A very bad deliverability rate would be 80 percent. Anything over 95 percent is usually good enough to not worry too much about. Some email service providers promise almost impossibly high delivery rates, like 99.9 percent. Whether they make good on that or not depends on whom you ask, but most of the first tier email service providers do actually deliver well above 95 percent of the emails they send.
8. Inbox Placement
This is similar to delivery rate. Basically, it measures whether you made it into a subscriber’s inbox, or was sent to her bulk mail folder.
Inbox placement most definitely matters. One of the best ways to improve it is to get your email open and click-through rates up. The second best way would be to practice some list hygiene — i.e., consider deleting the email addresses of anyone who hasn’t opened or clicked on one of your emails in the last six to 12 months. The odds are good that when you cut those names, you’ll be cutting people who weren’t even seeing your emails anyway.
9. Complaint or Abuse Rate
This is how many out of 100 subscribers actually labeled your email message as spam. Abuse complaints are serious, but even well managed lists will get a few here and there.
Don’t let your complaint rate get over 0.05 percent. An average complaint rate is about .02 percent, but, as before, it depends on which industry you’re in.
Want a simple way to reduce complaint rates? Don’t hide the unsubscribe link. The top reason people mark emails as spam is because they don’t want the hassle of finding the hidden unsubscribe link and then going through the steps some marketers require to get off the list.
Be nice to your subscribers, even when they’re leaving; don’t make it hard for them to get off your list.
10. Forward Rate
This is a happy metric. It measures how often people open, read, and then liked your email message so much that they sent it along to someone else. Forward rates are sometimes called “referral rates” or “share rates.”
Some companies only classify a share as when the email is forwarded, while other count social media shares, too. You do have social media sharing buttons in your email messages, right?
11. Churn Rate
This measures how much your list is growing after the unsubscribes, complaints, and hard bounces are taken into account. Churn rate is an important measurement, but many email marketers actually don’t know the churn rate of their list.
An average churn rate is about 25 percent per year, which means most lists are losing 25 percent of their subscribers every year. The implication of this is important. It means most marketers have to add 25 percent to their list (in new subscribers) every year, just to keep the lists the same size.