Three Metrics for E-mail Marketing Excellence

The principles of direct marketing apply just as much online as they do offline.  The process for tracking the performance of an e-mail campaign is essentially the same as for that of a direct mail campaign.

How do you know if your e-mail campaigns are working?  Start with three basic statistics: your bounce rate, your open rate, and your click-through rate.

Bounce Rate

The bounce rate tells you the percentage of your e-mails that were returned because they were undeliverable.  If you sent 10,000 e-mails and 1,000 were undeliverable, your bounce rate is 10%.  The 9,000 e-mails that were delivered are known as your non-bounce total.

Use the bounce rate to assess the quality and recency of your e-mail list.  Eyeball the list of e-mail addresses that bounced back.  You may find that some are simply invalid addresses (“,com” instead of “.com”) which can easily be rectified.  Others may be incomplete and thus useless.  Still other addresses might be old, which suggests you should have a continuous process in place for your customers and prospects to update their e-mail addresses.

Reducing bounce rate should be an ongoing objective of your e-mail marketing strategy.

Open Rate

The open rate is the number of recipients who opened an  HTML version of your e-mail, expressed as a percentage of your non-bounce total.  The open rate can give you an idea of how compelling and attention-getting your e-mail is.  Continuing with the example above, if 1,800 recipients opened your e-mail, then you have an open rate of 20% (1,800/9,000). 

The “HTML version” and the non-bounce total are very important components of this definition.  E-mail Service Providers (ESPs) can only track HTML e-mail messages, not text.  And the use of the non-bounce total has its own share of problems, because the non-bounce total isn’t synonymous with the total e-mails delivered.

E-mails may not be considered bounced because some e-mail servers inadvertently send them to a junk folder on the recipient’s computer, which he/she cannot access.  Furthermore, if the e-mail isn’t bounced by the server, but by a portable device or software on the recipient’s computer, it will not show up in your e-mail tracking report.  Hence, you are basing your open rate on the number of e-mails sent, as opposed to delivered.

An additional problem with the open rate lies in the definition of “opened.”  Your e-mail is considered “opened” if the recipient either 1) opens it in full view or lets its images display in the preview pane, or 2) clicks a link in the e-mail.   The preview pane is a double-edged sword: If the recipient let the images of your e-mail display in the pane, your open rate may be overstated.  On the other hand, if the recipient didn’t allow images to show in the pane, but scanned the e-mail, you open rate will be understated.

You might want to use some qualitative methods to estimate the degree to which these flaws exist.  For example, a survey may give you an idea of the percentage of your customers who use the preview pane and allow images to display; a test of 100 pre-recruited members of your list to receive your e-mail (who report whether or not they received it) might give you clues into how many non-bounced e-mails weren’t sent.  This will help you place a margin of error around your open rate.

If you find your open rates declining over several campaigns, that is a sign to make your messages more compelling.

 Click-Through Rate

Your click-through rate tells you the percentage of unique individuals who click at least one link in your opened e-mail.  If, from the 1,800 e-mails were opened, 180 recipients clicked at least one link, then your click-through rate is 10% (of your opened e-mails).  It’s important that you subtract multiple clicks by a recipient (whether he/she clicked more than one link, or one link several times), in order to prevent double counting.  Most ESPs do this for you seemlessly.

Your click-through rate is a measure of how well your e-mail calls your prospects to action.  Low or declining click-through rates suggest your e-mail message isn’t generating interest or desire.

Always remember to:

  1. Track every e-mail campaign you do;
  2. Look at non-click activity (increased store traffic, phone inquiries, etc.) that occur immediately following an e-mail campaign;
  3. Look at activity to your Web site immediately following an e-mail campaign; and
  4. Track your metrics over time.  Look for trends in these metrics to refine and improve your e-mail marketing results.

  

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