By Troy Burk
When it comes to measuring the effectiveness of your email marketing efforts, the clickthrough rate (CTR) is a key metric in determining success. But are you measuring the “right” CTR? There is still some debate about how to properly measure the clickthrough rate of email communications.
The direct mail industry is very clear about their metrics. For example, they know if they send 1000 pieces of direct mail and 100 people respond, they’ve earned a 10% success rate. It’s easy to figure out, because it’s based on returns/responses/phone calls, or whatever metric they’ve set up. Responses ÷ pieces sent = success rate.
Except an email’s CTR isn’t as always as cut and dried as that.
One thing that is confusing is that email service providers vary on how they measure their CTRs. Is it based on emails sent, emails delivered, or emails opened? Some calculate it by dividing the total number of clicks by the number of emails delivered. If you deliver 1,000 emails, and you get 100 clicks, you get a 10% CTR.
Others measure it by dividing the number of emails delivered by the number of unique subscribers who clicked through. This means that if people click more than one link you only count one recipient. If you deliver 1,000 emails, and 50 people click two links each (100 clicks), you get a 5% CTR.
Neither are wrong or better than the other. They’re both important, and can give you a good picture of how your email marketing efforts are performing over time. What’s most important is that you apply the same formula to your email campaigns consistently over time. When looking at industry benchmark studies, be sure to understand how this is calculated to help you understand if you are on par with the findings.
Some email service providers will even include unsubscribes in their CTRs, which seems disingenuous. An unsubscribe is a negative engagement and if clickthrough rates are supposed to reflect a positive key success metric, this is just simply misleading and devalues the authenticity of what you are hoping to measure effectively. I was talking with a marketer recently, and they were telling me that they recently improved their CTRs, nearly doubling them. They were utilizing a leading ESP and when we looked deeper into who clicked through, 70% of their clickthroughs were unsubscribes.
It’s also important to know that how you benchmark your CTRs must vary by the types of emails you send. A transactional email will typically get more clicks than an email newsletter, and an email newsletter will generally produce higher clicks than a promotional message. So you can’t just combine the three results to come with an overall CTR for your email strategy, or compare the three to each other and assume that one is “more successful” than the other.
When you’re trying to come up with an effective measurement for the success of your email marketing campaigns, make sure to apply the same formula for click-through rates to all of your campaigns, regardless of whether they’re transactional emails, newsletters, or promotional messages. Once you have determined how you’ll measure success, you can start testing and retesting to find the best types of content to improve your CTRs, and ultimately, increase your positive engagement with subscribers.
To be most effective, look at CTRs by what lifecycle stage your prospects and customers are in with your brand. The people already most engaged with your brand will engage further with your email marketing efforts. People not engaged through any channel will be your least engaged email subscribers. To drive higher clickthrough rates, drive more engagement (through all channels).
Troy Burk is CEO of lifecycle marketing solutions provider Right On Interactive.