In today's world of seemingly endless streams of analytical data, it's become hard to know exactly which email marketing metrics you should be measuring. Unfortunately it's also increasingly hard to know just how much weight you should apply to each set of metrics. Measuring performance is a critical component of running a business and email marketing is no exception. So which email marketing metrics should we be measuring?
Key Small to Medium Business Metrics
Not surprisingly, small to medium business owners/marketers are typically most interested in the business case metrics. (Source: SalesForce State of Marketing 2015) Return on investment is almost always the number one metric they cite when discussing marketing measurement, and rightfully so. Common sense tells you that spending money on marketing without knowing whether you are generating revenue or sales leads would be a poor decision.
Key Metrics of the Marketing Professional
Marketing professionals specializing in email marketing tend to place a heavier weight on the more technical non-business case metrics. Metrics such as open-rate, click through rate, bounce rate (both hard and soft bounces), delivery rate, all rank very high in importance to an email marketing professional.
Hubspot discussed key email marketing performance metrics in their February 2016 blog Email Analytics: The 6 Email Marketing Metrics & KPIs You Should Be Tracking. They list them as follows:
- Click Through Rate
- Conversion Rate
- Bounce Rate
- List Growth Rate
- Email Sharing/Forwarding Rate
- Return on Investment (ROI)
The above list reflects our previous point regarding the priorities email marketing professionals place on non business case metrics. Whilst ROI is mentioned, it is listed sixth behind other less business case metrics.
ROI vs Non-Business Case Metrics
Email marketing software has made it incredibly easy to measure email marketing metrics with data such as open-rate, click through rate and bounce rate measurements right at the marketers finger tips. Return on investment however is much harder to calculate, especially when sales and lead data might not be tracked easily.
Unfortunately the above results in a clear conflict of priorities between the business owner/marketer and the email marketing professional providing a service. So who is right? The small business owner will be quick to point out that there isn't much point in having a high open-rate or click through rate if it doesn't result in a return on their investment. It's an argument you can hardly argue against given no one wants to be in the business of losing money.
In SalesForce's 2016 State of Marketing report, a survey of thousands of businesses and marketers found that 79% reported email marketing directly generated return on investment, up from just 54% in 2015. It would appear that marketers are recognizing that ROI is a key measurement of email marketing performance, aligning themselves to what many small to medium business owners have known all along.
Take A Holistic View
There is little to no doubt that ROI is the most important performance measurement with regards email marketing, or any other marketing strategy. With that said, other more technical non-business case metrics play a vital role in measuring the success of an email marketing campaign.
Email sharing/forward rate is a great example of a non-business case metric which provided great insight into your marketing campaign. A high sharing/forward rate may not directly result in an immediate improvement in ROI, but it does tell the marketing team that the content of the campaign was very engaging and of high quality.
Churn rates give the marketer an indication of how many subscribers are leaving their list. It's an extremely important metric which again does not directly impact the business return on investment, but is vital to the ongoing success of their email marketing. Losing subscribers means a smaller audience, which eventually will result in a lower ROI.
Taking a holistic view to measuring your marketing metrics is key to ongoing email marketing success. While it is obvious that return on investment remains the number one metric, other measurements of performance play a key role in ensuring long term email marketing success.
Quantifying Return on Investment
Measuring and quantifying return on investment is often very difficult. Online stores aren't so difficult with tracking made easy using Enhanced Google Analytics, but tracking sales,leads and ROI in store and via other channels is often much more difficult. Unless a customer specifically tells the business staff that their interest was generated via an email, how can the email marketing team measure return on investment?
Small to medium business owners must ensure appropriate steps are taken to measure the source of revenue and sales leads in order to provide email marketing professionals with the data required to measure return on investment. One can hardly blame a marketing professional for not measuring ROI if the business itself isn't providing the base data required for accurate measurement.
ROI Always Number One
Marketing professionals and business owners/managers need to ensure that appropriate attention is given to a variety of email marketing performance metrics. The question of which metrics are most important will vary from industry to industry, but you can be certain that business owners will always demand return on investment as the number one key metric.
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