For geeks and wonks, the ease of accessing a multitude of e-mail marketing metrics is akin to being the proverbial kid in a candy store. But just as even the most voracious youngster will get a stomachache from too many sweets, marketers can find that the wealth of available metrics induces a headache: No one has the time to view and analyze them all.
In short, while we all know it’s impossible to improve without measuring, how do we determine which metrics are the most important ones to track?
Loren McDonald, vice president of industry relations at marketing solutions provider Silverpop, divides the type of e-mail metrics available into two categories: operational/process and output/success. Operational metrics, such as bounce, unsubscribe and spam complaint rates, help you understand the mechanics of your e-mail efforts. Output metrics, which include things like the average revenue per e-mail delivered and orders per customer per year, “show how e-mail marketing is contributing to the success of the business, the bottom line,” McDonald says.
“In theory,” he adds, “you should start with the success metrics and ask, in essence, ‘What is the role of e-mail marketing in our organization, and how does it support our goals?’”
Measures of Success
Ross Kramer, president/CEO of e-mail services provider Listrak, agrees. Indeed, before you start measuring, you need to determine what business goals you’re trying to attain and what problems you’re aiming to solve. If your priority is selling product, you’ll need to track different statistics than if your number-one issue is client retention.
“The traditional metrics that most people look at aren’t going to help you solve your problems,” Kramer says. “You really want to be looking at how well you are engaging people who are new to your file and people who have been on your file for a while.”
When it comes to measuring engagement, Greg Cangialosi, president/CEO of e-mail services provider Blue Sky Factory, contends that clickthrough rates are key. Clickthroughs let marketers know “what in their content is driving subscriber interest,” he says. “Based on the reports, they can see what really catches the eye of subscribers and what doesn’t. This allows marketers to either improve or prune out content that simply doesn’t ever get any clicks.”
Just as important are the conversion rates, “because at the end of the day, e-mail recipients must do something to drive the sender’s business forward,” Cangialosi says.
Note the use of the plural: clickthrough rates, conversion rates. You need to review these and other core metrics by segment. It’s not enough to know that a particular campaign had a 22% clickthrough; you want to know whether subscribers who came to your site via a sweepstakes had a clickthrough rate that was significantly different from rates from those who were directed to your sign-up page via a social network or an in-store campaign. That can help you determine if you should shift your spend away from one source or channel toward another, or if you need to alter your messaging for particular segments.
Fashion brand Tommy Hilfiger, for instance, found that e-mail subscribers acquired via cost-per-lead (CPL) advertising across a broad range of Web sites have open and click-through rates similar to those acquired via search and other channels. But senior director of ecommerce Jared Blank also found that it takes them longer to make an initial purchase. To that end, the company is testing sending this segment of its database unique messages, such as deeper discounts and more fashion-oriented content. “We’re still working on what’s the best way to message to get them to ultimately convert,” Blank says.
Metrics That Deliver
Success metrics might seem sexier to track than operational metrics, but the latter are just as important. After all, if your messages aren’t getting delivered, there isn’t any response to measure.
Kramer says it’s important to track your delivery metrics, such as opens and bounces, as well as click-through rates, by ISP over time. If you notice that, say, Gmail addresses consistently have lower clickthrough rates than other addresses, it could be because your messages are rendering oddly via that ISP.
Analyzing spam complaint rates, unsubscribes, and bounce rates over time is “absolutely critical,” McDonald says. An upward trend is the cue for you to take a look at your frequency (Did you recently increase it? Can you test cutting back?), your acquisition methods (Are your promotions encouraging people who aren’t all that interested in your offering to sign up simply to enter a sweepstakes or win a prize?), and your creative (Is it time to try out new templates? Are your messages rendering properly?).
At the same time, you also want to monitor deliverability metrics on a daily basis — if not more frequently. Andrew Kordek, manager of e-mail optimization for online collective-buying club Groupon, receives deliverability reports on an hourly basis, “so that we can immediately take an offensive rather than a defensive route,” he says. If he sees a rise in bounce rates from a particular domain, for example, he can have someone get in touch with the ISP before the rise turns into a more serious spike.
Even if you track deliverability metrics on an hourly basis, bear in mind that the trends, rather than the raw numbers, are what to keep an eye on. This is especially important regarding open rates. “Some marketers could potentially pay too much attention to the open rate,” Cangialosi notes. “The reason is many e-mail clients block images, so the e-mail isn’t recorded as an open. This causes the open rate to be inaccurate, so it’s important that marketers not rely too much on it.”
Kramer agrees that “too many are still hung up on open rates. We like to say the conversation starts with inbox delivery, but there are so many paths beyond delivery.”
In short, just as a successful e-mail campaign relies on multiple elements, from database hygiene to creative, so you need to measure multiple elements, which may vary somewhat from campaign to campaign depending on your goals. “It’s really about looking at metrics that speak to the KPIs of the business,” Kramer says, “and applying them to strategies to help build the business.”