I recently caught up with co-owner and marketing mastermind behind Boston co-retail space For Now, Kaity Cimo. She runs the space with friend and business partner Katharine ReQua. They opened a year ago and have played home to over 80 brands in that time.
A Guide to Email Marketing Metrics and How to Calculate Them
The digital age is in full swing and more and more brands are turning to email marketing to drive traffic to their websites, generate leads, and upsell to existing customers.
If your brand is already taking advantage of email marketing – great! That’s exactly what you need to be doing. And if not, that’s ok too, but you might want to consider all the benefits email marketing has to offer to your company, regardless of your industry.
To get the most ROI and success out of your email marketing strategy you need to understand what people want to see vs. what they don’t, exactly how much money you’re spending per email, and whether your content is actually being read or ending up in a spam folder.
But like any strategy, there’s a right and a wrong way to do things and understanding the metrics of your email campaigns is imperative to maintaining a thriving strategy.
In this post, we’re going to look at the most important email marketing KPIs and metrics that you need to be tracking and walk you through exactly HOW to calculate them.
Why are email marketing metrics such a big deal?
Email marketing is like any investment: you want to make sure you’re getting enough bang for our buck. Sure, email marketing has some great benefits, but running a campaign is only useful to you if you know you’re reaping those benefits.
You need a way to analyze your data to ensure your campaign is actually working – if something is off then you need to know how to identify the issue via your email marketing analytics so that you can boost performance.
What if you’re sending regular emails but spending more money (we’ll discuss how you calculate costs below) than you’re getting back? Is it because your readers aren’t meshing with the content? Are they even reading it? Are they being inspired to click through to the links you’re sending them?
Understanding what email marketing metrics you should be tracking is going to be the key to your campaign’s success.
In this guide we’re going to talk about the following email metrics:
- Bounce rate
- Spam rate
- Unsubscribe rate
- Subscriber growth rate
- Open rate
- Click-through rate
- Email conversion rate
- Revenue per campaign
- Revenue per subscriber
Let’s get started!
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Understanding your email bounce rate
Your email bounce rate is the number of emails you sent out that were never delivered. There are two categories of email bounces:
- A soft bounce may be a temporary problem with an email address, for instance, if the server was down.
- A hard bounce indicates a permanent problem, like an incorrect email address.
Measuring your email bounce rate can give you a good insight into the quality of your list. For example, if you’re getting several hard bounces it may indicate your subscribers aren’t giving you up-to-date or accurate email addresses.
The average email bounce rate is generally 1% or less across most industries.
Why your emails may be bouncing
- A server may be down temporarily
- There were typos in the provided email addresses
- Your sending IP address may be blocked (you may be suspected of spam)
- The subscriber has activated an auto-responder or vacation reply
- The receiving mailbox is full
- You were given an incorrect email address
How to calculate your email bounce rate percentage
Email bounce rate percent = the number of emails that bounced ÷ by the number of total emails sent.
Let’s say that you send 900 emails and 10 of them bounced – here’s what that looks like using the email bounce rate formula.
8 ÷ 900 = .0088 or .9%
Understanding your email complaint/spam rate
Even if your business is totally legit, it’s still possible for inboxes to flag your emails as spam. This decision can be made automatically, or people can manually complain by moving your email to their spam folder.
That said, it’s inevitable that you’ll get some spam complaints but the rate should be low at around 0.1%.
Why your emails may be flagged as spam
- They use suspicious keywords
- People forgot they subscribed to your list
- You’re sending more emails than your subscribers are comfortable with
How to calculate your email spam rate percentage
Email spam rate percent = the number of people who reported your email as spam ÷ by the number of emails sent.
Let’s pretend you sent 1500 emails and 2 people reported them as spam. Here’s what that looks like using the formula:
2 ÷ 1,500 = .0013 0r 0.13%
Understanding your email unsubscribe rate
Your email unsubscribe rate is the number of people who are unsubscribing from your email list. The numbers vary by industry, but a normal unsubscribe rate typically falls within the .2% – 1% range.
Why people may be unsubscribing from your email list
- They only subscribed for whatever opt-in or offer you provided
- Your emails weren’t segmented
- You’re sending emails too often or not often enough, resulting in people either feeling spammed or not recognizing your brand in their inbox
- Your emails aren’t providing value
How to calculate your unsubscribe rate
Email unsubscribe rate percent = number of people who unsubscribed ÷ by the number of emails delivered.
Let’s say you sent 2,000 emails and 100 of them unsubscribed from your list. Here’s how you use the formula to calculate your email unsubscribe rate percentage:
100 ÷ 2000 = .05 or 5%
Understanding your email subscriber rate
You’ll inevitably have unsubscribers, but you want to be growing your email list as well. Your subscriber rate is the number of new opt-ins you have to your email list. A good number is anywhere from under 1% up to 5% month over month, but this can often be higher with the right offer.
Why people may want to subscribe to your email list
- You’re providing a low-cost or free offer
- You’re promising to provide future deals or discounts
- People want to stay up to date with your content or products
How to calculate your email subscribe rate percentage
Email subscribe rate percent = number of new subscribers – number of unsubscribers/spam complaints ÷ by the total number of emails on your list.
Say you have 200 new subscribers, 8 people who reported you as spam, and a total of 2,000 people on your email list. Plugging that into the formula looks like this:
200 – 8 = 192
192 ÷ 2,000 = 0.096 or 9.6%
Understanding your email open rate
Your email open rate is how many people are opening your emails.
The average email open rate is just under 30%, but the specific numbers vary widely by industry. According to Constant Contact, their average email open rate in the childcare industry is 19.49% compared to 10.96% for the spa/grooming industry. It’s helpful to know where your industry falls so you can make informed decisions.
Why people may not be opening your emails
- Your emails are being routed to your subscribers’ spam folders.
- Your subject lines are ineffective.
- You aren’t giving customers the content they want.
- Your email list is outdated.
- People don’t recognize your “from” name.
How to calculate your email open rate percentage
Email open rate percentage = number of people who opened your email ÷ number of people you sent emails to – number of bounced emails.
In this example let’s suppose that you sent 500 emails and 200 are opened while 100 are bounced. Here’s what that equation looks like to calculate the email open rate percent:
500 – 100 = 400
200 ÷ 400 = .5 or 50%
Understanding your email CTR (Click Through Rate)
One of the primary functions of an email campaign is to keep your subscribers engaged with your brand. Regardless of the type of email you’re sending, the goal is almost always to get them back to your website. For this to happen, you not only need them to open your emails, but also to interact with and click the links. This interaction is your email click-through rate or CTR.
The average email click-through rate hovers around 4% but is one of those metrics that can vary by industry and email type (i.e. marketing, newsletter, abandoned cart, etc.).
Why your CTR may be low
- Your copy is ineffective
- You don’t have a CTA
- Your content isn’t targeted
- Your email list isn’t segmented
- Your email isn’t optimized for mobile
- Your email list is outdated
How to calculate your email click-through rate
Email CTR percentage = total number of clicks ÷ number of emails opened
Now we’ll say that 550 people opened our email, and of those, 70 clicked on our provided link. Here’s what that equation looks like:
70 ÷ 550 = .127 or 12.7%
Most email marketing software, Ampjar included, calculate your open and click-through rates for you.
Understanding your email conversion rate
While your CTR measures how many people clicked on your links, your email conversion rate measures how many people clicked on your link and then followed through with the desired action.
Your email conversion rate is one of the bigger email metrics you’ll want to measure because it helps determine your ROI. You want to know how much money you’re spending on email marketing vs. any profits you’re making from the emails.
The average conversion rate is between 1%-5%, but you’ll want to compare your specific email type (newsletter vs. abandoned cart) and industry to know where you should be landing.
Why your email conversion rate may be low
- Your landing page isn’t optimized well
- Your audience isn’t segmented
- Your offer isn’t enticing enough
- You don’t have a clear CTA
How to calculate your email conversion rate
Email conversion rate percentage = the total number of people who followed through on the email’s goal ÷ number of successful email deliveries.
Let’s say 30 people followed our email link and bought a product after sending a total of 700 emails. That equation looks like this:
35 ÷ 700 = .05 or 5%
Understanding your email revenue per campaign
Another essential email marketing metric to track is your revenue from each campaign that you run.
How to calculate your ROI per email campaign
Email revenue per campaign = total email revenue – the amount of money you invested in the campaign ÷ amount of money you invested in the campaign.
In this example, we’ve made $10,000 from our email campaign. Now let’s say the overhead investment (email service provider, any designers/copywriters/programmers/etc. who provide the content of the emails, percentage of employees’ salary/benefits, etc.) is $4,000. Let’s plug that into the formula:
$10,000 – $4,000 = $6,000
6,000 ÷ 4,000 = 1.5 or 150% ROI
Understanding your revenue per email subscriber
Tracking your email revenue per subscriber gives you a more detailed look at your ROI. Knowing this metric can help you determine which demographics are responding better than others and help you determine if you need to reallocate resources or change your strategy.
How to calculate your revenue per email subscriber
Email revenue per subscriber = total email revenue – overhead cost ÷ number of email subscribers.
We’ll say your business earned $50,000 in email revenue and you spent $5,000 on overhead. Finally, your email list consists of 10,000 people. Let’s see what that looks like in the formula.
$50,000 – $5,000 = $45,000
45,000 ÷ 10,000 = 4.50 or $4.50 value per subscriber
*A note here: You can calculate your revenue per email subscriber on a monthly, quarterly, yearly, etc. basis. Just choose the amount of time you want to measure and use only the revenue, overhead costs, and the number of subscribers you had during that specific timeframe.
We know it’s a lot to take in, but understanding and knowing how to measure these email marketing metrics will ensure you’re getting value from your campaigns. Businesses at different stages would have to focus on different metrics. If you’re just starting out with emails, for instance, focus on getting your open and click-through rates high, and spam complaints/bounces low. Businesses who have invested considerable time and energy into perfecting their campaigns’ open and click-through rates can then go into a deeper dive with revenue metrics.
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