Sometimes it’s good to get back to basics. We continually throw around key metrics when talking about email, but are we all on the same page in terms of how we’re defining them. By the end of today’s daily concept, we can be comfortable that we’re comparing apples to apples moving forward. Just a warning that today’s video may seem like a math lesson, which hopefully doesn’t bring back any bad elementary school memories. But email marketing is database marketing so you simply can’t avoid formulas.
We’ll start with the very basic and the very straightforward:
- SENT = # of subscribers we attempted to mail to (i.e. everyone on your list that hasn’t unsubscribed)
- DELIVERED = # subscribers that received the email
- BOUNCED = # of subscribers that didn’t receive the email (out of office, email address no longer valid). There are hard bounces (for example, email address no longer valid) and soft bounces (out of office, server temporarily down) – both are included in the total bounce number. So Delivered is also defined as Sent minus Bounced
- Unsubscribes = this one is straightforward, it’s simply the number of people that opt-out of your list
So, now that you’ve survived your first email math lesson, let’s move unto the intermediate exercise – the performance metrics.
- Open (Unique & Total) – Unique = # Individuals that Open; Total = Includes multiple opens (i.e. people opening multiple times) – A lot of people ask me “how do you track opens?” and the answer is pretty simple. An open is counted as anyone that downloads your images. So your “real” open rate is higher than the metric reported because many people read your emails without downloading any images.
- Open rate = Unique Opens / Delivered
- Clicks (Unique & Total) – Unique = # Individuals that click; Total = Includes multiple clicks
- Click-through rate = Unique Clicks / Delivered
- Conversions = # Sales generated by your campaign (and in a previous video on February 11th called Tracking Email Revenue, I explained the various ways in which you can track sales)
- Conversion Rate = # Sales / Delivered
So now you’re ready for the really meaty stuff – the metrics that the real experts know of and use. There are just two of them.
- The first is called the click-to-open ratio. It’s simply the ratio of unique clicks as a percentage of unique opens. Many industry experts believe that the CTOR is a better assessment of performance than the CTR for 2 reasons: 1. As previously mentioned the open rate is actually under-reported; 2.The click-through rate (CTR) is based upon the number of messages delivered instead of actually opened. The CTOR addresses both issues. Start tracking this metric and work to improve it in future campaigns through testing.
- The second is called the subscriber retention rate. This is an important metric because your subscribers are your most valuable asset in terms of your email marketing program. Simply keeping an eye on your unsubscribe rate isn’t enough to truly measure list churn and retention. The subscriber retention rate is more of a measure of your customer lifecycle, not just a number that tells you how many people opt-out of your list. It’s a ratio of your subscribers minus your bounces minus your unsubs as a percentage of your subscribers. Again, starting calculating this metric – if it starts declining then you know you need to work harder to make your email marketing campaigns more relevant.
If you’re interested in learning about how to make your email marketing messages more relevant, contact us for a free e-mail marketing opportunity audit.
Till then, have a wonderful e-mail Thursday!