When it comes to measuring email marketing results, there’s plenty of undue obsession with tracking basic process metrics like deliverability, opens and clicks. While each of those measures is obviously important, it’s the bottom line contribution of email marketing to your business that ultimately matters most.
True, if you can’t successfully deliver email to in-boxes no one will even know you’ve sent it; yet the reality is few legitimate marketers have serious problems with deliverability (on average industry-wide, 90% of email marketing messages make it through). Next, if subscribers don’t routinely open your email it makes no difference that you sent it, so while the open is important, it’s just the tip of the response iceberg. Finally for most companies, if subscribers open but then don’t click or call, there is little or no measurable value from the campaign other than a brand impression.
So, unless the sole objective of your email marketing program is to make brand impressions or drive traffic to web pages and stop there, you simply must track and measure the bottom line impact of your program on revenue-producing, revenue-sustaining actions. Because at the end of the day, even if you have the highest open and click-through rates known to man, if opens and clicks don’t translate into conversions (completed calls to action) and revenue, you’re wasting valuable marketing dollars and time
Three Essential Email Success Metrics
In addition to measuring opens and clicks, it’s vital to also focus on key email contribution measures to gauge the success of your program. Here’s a closer look at each of what I consider three necessary and valuable bottom-line email success metrics
you’ll want to make sure to track – and benchmark for your organization – going forward.
Keeping your eye on the email prize means measuring every completed call to action, or what we call in marketing a “conversion” that has value to your business. A conversion driven by email marketing can take a variety of forms, some of which do not produce an immediate sale but all of which do influence or eventually lead to new business opportunity, new customers and ultimately, sales.
Common conversion actions driven by email marketing are inquiry submissions, downloaded content in exchange for contact information, offer/content shares (to social or via email) quote requests, referrals to new prospective clients/list members, up-sell or cross-sell purchases, and of course, repeat purchases. All – whether resulting in a commerce transaction immediately or down the road – have measurable bottom-line value.
To successfully track email conversions, you need to define the primary call to action for every single email marketing campaign you send. How?
For every campaign ask yourself “what is the single most valuable action that an email subscriber can take as a result of reading this message?” Remember, most conversions take place on a web page or what is designed as a specific “landing page” for your email campaign. It’s critical that the web pages to which you direct email subscribers literally function as logical, safe “places to land” and either begin the conversion process or enable it entirely (like Amazon does with their “one click buy” function).
2) Average Conversion Value (aka “Average Order Value”)
Once you’ve got measuring conversion down, you’ll begin to realize there are multiple valuable actions email subscribers take. And if you’re an e-commerce enabled business, there are, naturally, also different products at different price points which you promote and sell. The outcome? Not all conversions deliver equal value, but when the total value of all conversions is summed and divided by the number of unique conversions, you can arrive at an “average conversion (or order) value”, commonly known as AOV.
For example – say an email marketing campaign promoting an annual conference results in 100 conference registrations. Subscribers are given the choice of three different registration levels – a single-day registration for $200, full conference for $500, and a premium option at $700. In total, the email campaign generates $55,000 of revenue. The total revenue – in this case $55,000 – divided by 100 registrations results in an average order value of $550 for that campaign; meaning each “sale” generated by the email campaign was worth, on average, $550 to this marketer.
3) Revenue Per Email (RPE) Address
But, wouldn’t it be great to know not only the average conversion (or order) value generated by your email, but also how much revenue per subscriber your programs produce? In other words, what is each member of your email list worth to your company in terms of money coming in the door?
If you’re answering “yes” then you need to track Revenue Per Email address, commonly known as RPE. Similar to tracking AOV, you’ll want to know the sum total of revenue (or other attributable economic value) generated by a campaign, then divide it by the number of subscribers who received the campaign to arrive at RPE.
So, say an email campaign produces $10,000 in sales. It was successfully delivered to 14,560 subscribers. Divide $10,000 by 14,560 and you get an RPE of about $0.69 per subscriber. But that’s just for a single campaign. Remember you can and should also calculate RPE over time (keep reading).
Don’t Stop Short
In my expert opinion, I suggest you calculate each of the above metrics in each of the following ways:
- For every unique email campaign/message you send
- Monthly, for the sum total of all email campaigns/messages deployed in the given month (if you’re judiciously measuring monthly you can extrapolate quarterly results too)
- Annually, for the sum total of all email campaigns/messages deployed in the given year
And yes, tracking bottom-line results can be more challenging when your email marketing does not drive direct online purchases or immediately generate revenue but instead is part of a lead-generation and/or lead nurturing program. In those cases, remember that there is still value in non-revenue producing actions generated by your email, such as warm and hot leads, qualified inquiries, social shares, pass-alongs and referrals. Your job is to know what each of these actions is worth to you (Ask: if you had to pay to generate it, what’s the maximum you’d spend? There’s what each is worth) and track their value as well.
Moving beyond tracking basic email process metrics into solidly and faithfully measuring the three contribution metrics defined here will also allow you to calculate ROI and other meaningful marketing and business measures. Most of all through, it will give you a quick read on just how much email marketing is moving the needle toward your important growth goals and if it isn’t where to re-group, test and tweak so it can.Tags: conversion, email marketing, metrics, revenue