E-mail Metrics That Matter

Apr 01, 2006 10:30 PM  By

What should you be measuring in your e-mail acquisition and retention campaigns? Click rates? Open rates? Revenue per e-mail?

E-mail metrics have been subject to changes in fashion during the past 10 years. For instance, open rates were once a killer metric. But as e-mail inbox providers increasingly block HTML — the graphics that also allow senders to know when an e-mail gets opened — open rates are becoming devalued as a metric.

What’s taking their place? And how are marketers using the metrics? It depends on whom you talk to and what your objectives are.


Whether the campaign is for retention or acquisition, the first key metric marketers should pay attention to is the delivery rate, says Kevin Johnson, general manager of San Mateo, CA-based e-mail services provider Digital Impact, an Acxiom company.

“In particular in acquisition, if you’ve paid for a list and you get a 30% failure rate, you’ve paid for a bad list,” Johnson says. “In retention, if you’re not getting a 95%-plus delivery rate, you have a bad source, bad permission practices, or a bad e-mail service provider. Step one is to know the e-mails are getting there.” Next comes the often-maligned open rate, which “is still a key metric of the performance of your brand and your subject line,” he says.

Sarah Barber, vice president of acquisition services for another e-mail services provider, Portland, OR-based Yesmail (a division of InfoUSA), also notes that open rates are important when the objective is awareness, as with the launch of a product or when determining the effectiveness of subject lines. She adds that even in 2006, too many marketers craft subject lines as an afterthought.

“It’s the first thing people see, and I don’t see enough attention given to it,” says Barber. “It is the reason people say, ‘I’m going to open this,’ or ‘I’m going to group this with these other five things I got this morning and delete it.’”

Then there is the click-through rate — the percentage of people who click through the e-mail to view the offer — which indicates how compelling the offer is. There isn’t a benchmark for what constitutes a good click-through rate, but Johnson says “if you slip below 1%, you need to worry.” Also, marketers measure click-through rates differently. Some will measure the same person clicking through an e-mail multiple times as a separate click every time. Others measure the person once no matter how many times he clicks.

“Some people will come back and click through the exact same link a couple times,” Johnson says. “If you want to goose up your numbers, you can count those. If what’s important is engagement of an individual, then you should count each clicker as the click-through rate; if what’s important to you is the number of offers people look at, then you should count the total clicks.”

Yesmail’s Barber adds that too many marketers mistakenly put links to multiple offers in their e-mails. “I can show you a 3% click-through, but what does that tell you if you’ve got 16 links?” says Barber. “It doesn’t tell you anything about the appeal of the offer.”

Where the rubber meets the road is in the conversion rate, or the percentage of people who took some action, such as made a purchase or filled out a form. The conversion rate indicates how effective the offer is, how effective the landing page is, and whether the campaign is getting the right people to the right landing page. For example, an e-mail campaign that drops people off on the company’s home page will likely drive far lower conversion rates than a campaign that brings people to a page specifically designed to close the deal.

Other important and fairly self-explanatory metrics include average order sizes, dollars per click, and dollars per e-mail.


Keith Wardell, chief executive of Fairfax, VA-based Exmplar, a provider of online marketing services, recommends measuring how many people receive an e-mail, click on it, and buy later, either online or through another channel. “We can identify people who clicked on an e-mail on Monday and bought in a store on Tuesday,” says Wardell. Once you have those respondents identified, the question is whether that purchase should be attributed to e-mail.

Most times, according to Wardell, it should. “What you’ll find with multichannel companies is that probably 60%-80% of orders generated by an e-mail are made through retail,” he says. “The odds are very good that if I’m sending out 1,000 e-mails and getting $50 through my Website, I’m probably getting another $300 or $400 through my store.”

As a result, the next logical step is to send individually trackable coupons with offers for purchases made in the store. “Now I can say, ‘My e-mail is driving retail traffic,’” says Wardell. “And that’s what you want to prove. If I’m the CMO, I need to know that I’m approaching multichannel [marketing] with the idea that one channel can help another channel.”

Jay Schwedelson, corporate vice president of Boca Raton, FL-based list firm Worldata, says it is becoming increasingly popular for marketers to follow up e-mail campaigns with telephone calls — not to the entire file but instead to a select group, such as people who clicked but didn’t subscribe or make a purchase.

“The people who opened or clicked are the most likely customers rather than just anybody who got the e-mail,” says Schwedelson. “It’s not just a multichannel effort where they’re doing e-mail and telemarketing. What they’re doing is e-mail with very select telemarketing. That’s been a big shift in what we’re seeing as far as how to use the tracking from an e-mail campaign in an offline capacity.”

Schwedelson adds that the percentage of people who click through the link that says “If you can’t read this e-mail, click here” has become an increasingly important metric. “We started tracking that about a year ago, and the level of click-through on the format-issue link has skyrocketed,” says Schwedelson. “That means that more people are having issues seeing the actual message because of all the stuff that is going on in the inbox,” such as ISPs’ blocking graphics. While most marketers put a link for people who can’t read their e-mails, he estimates that maybe one in four tracks it.

Don’t forget the bottom line

Most marketers use e-mail metrics to gauge the effectiveness of a campaign or an offer. But Keith Wardell, chief executive of Fairfax, VA-based Exmplar, a provider of online marketing services, recommends measuring the margins of e-mail campaigns to determine whether promotions are helping or hurting your overall business.

“Pull out the cost of your provider, and then put a margin on it,” Wardell advises. “Some people have a good measure of margin; some people use an average margin. You don’t have to know the margin of every SKU.”

Many merchants, particularly those that started out as print catalogers, refuse to make promotional offers except for during liquidation campaigns, Wardell says. But many other multichannel merchants make promotional offers an integral part of their marketing. “You can’t pick up a Sunday circular without seeing a retail offer, and most of those offers show up in their e-mails.”

Say an apparel manufacturer has a $70 average order size with a 50%, or $35, margin. This manufacturer may offer free shipping, which will cost $5 or $6. The manufacturer may also offer $10 off. Now instead of a $35 margin, it has a $19-$20 margin. Conversion rates will probably increase as a result of the promotions, but “basically they could get half the response without that offer and do just as well on the bottom line,” says Wardell.

Not that Wardell advocates abstaining from promotions entirely. “Some segments of your customers should get offers because they need to be reactivated or they won’t buy unless you give them one,” says Wardell. “Other segments should never get offers, because they’re going to buy from you anyway. Most people don’t see that in their data, and therefore don’t act on it.”

The point is, including margin data among your other e-mail metrics can help you determine whether, when to, and whom to offer promotions.