By now, you are surely aware of the fact that email marketing is a cost effective method of converting prospects into paying customers but have you ever wondered how your company compares to all the rest in your industry? Of course you have! MailChimp is one of the biggest email marketing providers on the planet and it is responsible for the sending of billions of emails per month. It recently scanned hundreds of millions of emails delivered by its system to create a thorough analysis of some basic email marketing metrics.
It transpires that companies in the manufacturing industry enjoy the highest open rate at 48.1% while Architecture & Construction companies enjoyed an impressive 5.2% click rate. Companies in the Restaurant and Gambling industries fared poorly with a click rate of less than 1.5%. For the full list of statistics, click here. Continue reading to learn more about email marketing metrics.
What Metrics Matter?
In my opinion, Open Rates are as useful as a chocolate teapot whereas Click Rates is the most important metric. We briefly outline each metric below to show you what they actually stand for:
- Open Rate: This is a controversial metric as it relates to the percentage of emails sent that are actually opened. Most companies learn how to develop better headlines, when to send emails and the percentage of its list that is responsive to its messages. While this is useful and helps eliminate uninterested parties from your list, it is a metric that can be misleading. According to a large study of 186 million emails, having an above average open rate only leads to an above average conversion rate 47% of the time.
- Click Rate: This is a figure that tells you how many subscribers clicked on links within the email to visit your website. While this still doesn’t guarantee a purchase (far from it), it does indicate a genuine interest in your company and its products and this is something that can be built upon. From the MailChimp study mentioned above, you can see that a click rate of over 5% is rare.
- Action Rate: You can find out when your subscribers are most active with a metric that measures customer engagement by the hour. So you might find that most subscribers open your emails from 2-4pm and can then tailor your scheduling accordingly.
- Bounce Rate: In email marketing terms, this simply means the percentage of emails that were undelivered. This could be due to a poor quality email marketing provider or, if emails bounce when sent to the same addresses, it could be because the emails in question are not legitimate.
- Spam %: Hotmail, Gmail etc. have enhanced spam detection filters and will mark emails with too many links as spam. There are also a host of words and phrases that are classified as spam so if your email contains them, it will end up in someone’s spam folder or not get delivered at all. I have checked my spam folder and found emails with phrases such as ‘meet singles’, ‘make $’, ‘fast cash’ and ‘get out of debt’ dumped in this bin. Not all of them deserved to be marked as spam (The ‘make $’ email didn’t deliver the fortune it promised so no retirement for me just yet).
- Complaint Rate: Unfortunately, you will have a (hopefully) small percentage of recipients that take umbrage with your company for sending the email. This metric shows how many people receive your email only to mark it as ‘spam’. It could be that you have sent a spammy email but it’s equally likely that the recipient forgets that he/she is a subscriber to your mailing list and simply reacts like this because the email appears unexpectedly. Avoid using stealth subscription methods, don’t send out too many emails and always use a confirmed opt-in.
- Unsubscribe Rate: As the name suggests, this monitors the number of people that have unsubscribed from your list. When embarking on an email marketing campaign, you should take note if this rate suddenly escalates because you will need to analyse why a particular email provoked such a negative reaction and ensure it doesn’t happen again. It is essential that you permanently delete these individuals from your list because your email marketing provider may still count them as recipients and this will cost you extra per month.
The ultimate metric is of course Email Revenue which is a calculation of how much money has been generated by the company as a direct result of the company’s email marketing efforts. If you want to be really thorough, you could try to work out your Revenue per net Delivered which would tell you how much money an individual email generated.
However, this is an extremely difficult metric to measure because it only counts money earned that can be directly linked to the last click. Therefore, you will be unaware of any subsequent purchases that have been influenced by that email and you can’t determine how many offline purchases can be attributed to that email.
Hopefully, you now understand a little bit more about the importance of email marketing metrics. Again, I don’t think your Open Rate is that vital in the scheme of things; as long as your click rate is high in comparison to the industry average, you are obviously doing something right.
How do your click rates and open rates stack up to the industry average mentioned above?