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Measuring What Matters in Email Marketing, Part 1

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In today's environment of shifting and tight marketing budgets, it's not enough to merely know how an email campaign is performing on a onetime basis.

Although email process metrics such as delivery, open, and click-through rates have their place, you need to look beyond them to detect the true impact of your email marketing—and opportunities for continual improvement.

It's high time for email marketers to assess campaign performance in terms of the business and marketing goals, objectives, and contribution expectations that matter. So how do you figure out what matters?

Hint: There is no one-size-fits-all answer.

Determining what matters most to your organization requires a clear understanding of your company's strategic objectives as well as what's expected of email marketing. What goals do you want email campaigns to achieve? Drive more site traffic? Generate leads? Result in direct sales? Create awareness? Defining expectations is key to measuring what matters.


The fact is, process metrics and advanced measurements such as return on investment (ROI), average response value (ARV), and channel value (CV) ultimately matter. And it's important to understand not only how to calculate them but also what they measure. 

Process metrics are diagnostic in nature. They should be tracked not only campaign by campaign but also by individual list members (or list segments) over time to determine how each element of your email program is contributing to the campaign's overall success as well as how engaged list members are over the long term.

The following are the most common email-marketing process metrics and what they measure:

  • Delivery (or, conversely, bounce) rate: List hygiene and the effectiveness of the opt-out process
  • Spam complaint rate: Relevance, trust, and opt-out ease
  • Unsubscribe rate: Relevance, customer engagement, and delivery on expectations
  • Open rate: Subject-line effectiveness, trust, and brand strength
  • Click-through rate: Relevance, offer, and content quality; also design and engagement
  • Conversion rate: Completed calls to action or other valuable responses
  • Forward/share rate: Subscriber interest and the viral nature of the offer and content
  • List churn: Effectiveness at managing combined churn factors—bounces, spam complaints, and unsubscribes

Contribution metrics are strategic in nature. They measure your email program's performance against your organization's strategic marketing and business goals. The following are common contribution metrics:

  • Revenue: The total revenue generated from your program over a specific time period
  • Cost savings: Money saved by using email over higher-cost communications channels
  • Leads generated: Number of leads generated via the email program
  • Site traffic: Number of website-page (or social-media page) visits generated by the email program
  • ROI: Whether the use of email is paying for itself, and how much gain or loss is realized
  • Average response value (aka average order value): The average value of the desired transaction or completed call to action from your email program
  • Customer retention: Use of email to minimize customer defection
  • Channel value: The bottom-line contribution in dollars-and-cents revenue exclusively attributable to your email-marketing program

Remember, measuring what matters means collaborating with other departments to collect data that indicates the impact of your email—especially if you're a multichannel merchant. It will also mean conducting side-by-side campaign analyses to determine performance improvements (or decreases) over time.

Part 2 of this article will present (a) approaches for using the metrics noted above; (b) explanations of the key usable insights for each metric; (c) and ways to determine the best measurement processes for learning what you need to know.  


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Karen Talavera heads Synchronicity Marketing and writes about how to successfully use email, social, and content marketing on the Enlightened Emarketing blog. You can also follow Karen on Twitter (@SyncMarketing) and Facebook for daily tips and links to emerging email and social media marketing trends, facts, and research.

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  • by Melissa Paulik Wed Sep 9, 2009 via web

    Excellent way to categorize metrics. We find ourselves telling people to focus on metrics that link to the bottomline, but then a second later we tell them to look at bounce-rates. The categorization of process vs contribution metrics, puts these two thoughts into perspective.

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