Which KPIs Should you set for your Email Marketing?

Email marketing in ecommerce is a simple process. However, successful email marketing is far from easy. In a time when social media is oversaturated, and organic reach is restricted by the demand for paid advertising, email marketing is becoming more influential.
More ecommerce businesses are turning their focus to email to connect with their audiences. But without tracking these efforts, how can you be sure it is working?
To truly succeed with email marketing, it’s essential to set key performance indicators (KPIs). These quantifiable measures should align with your business goals, marrying sales with marketing in a unified effort to achieve your overarching objectives.
Without KPIs, it will be almost impossible to harness the full potential of email marketing.

The Importance of Setting Goals in Email Marketing

With marketing being a quantitative business area, it is essential that every action has a clear goal and can be measured accordingly. Email marketing is perfect for this, as it gives companies direct access to their audience and enables them to monitor the reactions.
In 2015, email marketing was reported to bring an impressive ROI of over $40 per $1 spend. One of the biggest reasons for this potential success, is that email allows businesses to take a very personal approach to their marketing efforts.
Ecommerce personalization is fast becoming the leading tactic for many companies, as they add the human touch to their marketing automation strategies. However, time to craft perfect emails will be time wasted if you aren’t analyzing the results.  

6 KPIs to Measure Your Email Marketing Success

In email marketing, using a single metric is not enough to determine how successful your campaigns are. By tracking several important metrics and setting your KPIs based on them, you can get a balanced overview of the impact your email marketing campaigns have.
Regardless of what your specific goals are, it’s crucial that you track these metrics to determine the success of your email marketing:

1. Clickthrough Rate

This is defined as the percentage of recipients who click on any links within an email. For example, if you send 1000 emails and get 40 clicks, the clickthrough rate would be 4%
The CTR allows you to calculate the results of every email sent. It is particularly useful in A/B testing, enabling marketers to determine what type of links work best. Setting a KPI based on this metric is an effective way of improving your call-to-action (CTA) writing.  

2.  Conversion Rate

The conversion rate is the ratio of recipients who answered your CTA and then took the desired action. This could be anything from filling out a survey or downloading an eBook to visiting your ecommerce store to make a purchase.  
Ecommerce personalization can have a major impact on this metric, with personalized emails boosting open rates by more than 40%, ultimately leading to higher conversion rates.

3. Bounce Rate

There are over 4 billion email addresses today, with many people having more than one. Unsurprisingly, not all of them are active. Who among us has never abandoned ship when the flood of subscriptions and junk mail gets too much?
The problem this creates for email marketers is that their emails may not be able to reach the recipient inbox. This percentage is known as the bounce rate, of which there are two different types:

  • Soft bounce – caused by temporary issues like a full inbox or server issue. Once the problem is solved, marketers can resend the email.
  • Hard bounce – these happen when the email address is invalid or permanently closed. A high hard bounce rate will reflect poorly on the sender’s reputation, making them look like an email spammer. As a result, ecommerce businesses should be vigilant in removing these addresses from their list.

 

4. List Growth Rate

In ecommerce, the belief is that the money is in your email list. However, this is only true if you can build a list of qualified leads, who can someday be converted into paying customers. Years ago, it was easy to acquire email addresses. Today, people are more cautious, which means it’s almost essential to use lead magnets to entice people to join your list.
Calculating your list growth rate is a little tricky, but this is worthwhile as monitoring this metric will not only let you see the growth of your email list, but also your potential audience. As email lists naturally decline by over 20% every year, ecommerce businesses must continually strive to grow their lists to bolster chances of long-term success.

5. Share / Forward Rate

When people share or forward your emails, it increases your brand exposure and reach. This helps generate new contacts, which grows your list and increases leads. Learning how to persuade people to share your email content is something all email marketers can benefit from. Using the tools in your marketing automation software will let you see the rate people are spreading your email content, acting as a good KPI for audience growth.

6. Overall ROI

This should be an obvious one. The clearest way to determine the success of your email marketing campaigns can be laid out with this calculation:
[(Value of sales from an email campaign – Campaign costs) / Campaign costs] * 100
For example, if your ecommerce store makes an additional $3000 after an email campaign that cost $200, you can calculate the overall ROI as follows:
[(3000 – 200) / 200] * 100 = [(2800) / 200] * 100 = [14] * 100 = 1400%
As email marketing has an average ROI of 400%, it is well worth investing in. Tracking this metric and using it as one of your KPIs will allow to see just how effective your campaign is.

Why Tracking Metrics is Crucial

Your ecommerce business might comprise the best copywriters, the most fantastic graphics designers and a solid SEO strategy. You could have the best marketing automation software in the industry and spend a lot of time devising your email marketing plan.
But all of it will be for nothing if your business isn’t keeping a close eye on the metrics that matter. There is no one-size-fits-all approach to email marketing, which means there is a constant need to adjust and adapt to the movements of the market.
The companies who track the important metrics and work towards well-thought out KPIs will ultimately enjoy much more success in the long run. With some focus on ecommerce personalization and astute analysis of your metrics, email marketing can deliver some incredible results for your business.