Email Marketing KPI: Customer Sales, Site Activity or Conversions?
Of course, at the end of the day, what really makes your email marketing program successful is if it meets the email marketing KPIs (Key Performance Indicators) that you've set for it to accomplish. In most cases, this is going to be a revenue goal. However, it could also be a membership increase, successful conversions to a lead form, or even simply page impressions. In this section, we'll talk about how to track your email marketing KPIs and how to interpret the data in order to optimize your overall email campaign performance.
Email Marketing KPI Defined
While determining what your email marketing KPIs should be is entirely up to you and may be something completely unique to your business, there are a number of common success criteria for email campaigns (and marketing campaigns in general) that you may want to work with in order to keep things simple.
Revenue on a VPA Basis: One of the easiest metrics to work with is revenue on a value-per-action or value-per-acquisition basis. In this metric, your email is promoting a single product, purchase, or action that you have set a fixed value on. You may be selling a product that has a profit margin of twenty-five dollars. Therefore, you can assign a twenty-five dollar value to every tracked transaction from the email. You may be collecting names and leads and know that the average lifetime value of a new member is $100; therefore you can assign a value of every new lead as $100. When you use this metric, it becomes very easy to just track transactions and then multiply. It also means that you value each email the same way, so you do not need to complicate matters by trying to sort out high value email names versus low value email names.
Revenue on a Total Revenue Number: The second most common way to track email campaign success is on a total revenue basis. After you sent your email, how many transactions or sales did you make and what was the total value of those email campaigns? You can then cross-compare different campaigns and determine which campaigns ultimately generate the most revenue.
Total Number of Sales/Transactions: In some cases, looking at revenue, while important, can make your numbers unclear. Perhaps you only had one sale, but that individual sale was worth $5000. That may make your email campaign look as though it was highly successful. However, in truth, you only enticed one person to purchase products. It just so happens that that person was a high-volume buyer. That doesn't mean that your email campaign was well designed. It means that you got lucky with a big-dollar buyer. It's often important to look at the total number of transactions that an email generates. If that total number of transactions was low but the revenue was high, you still need to improve your email program to convert more actions. If the number of transactions was high but the revenue was low, you'll need to work on your merchandising, cross sell, and up-sell techniques to convince users to purchase more or higher value products.
Lead Form Generation/New Members: It's also possible that your email's goal is to recruit new members, email addresses, leads, or to get existing customers to fill out more detailed profile information. If that's the case, you'll want to tailor your metrics to simply count the number of sign-ups or forms filled out. If you know the monetary value of a sign-up, new member, or fully filled out lead form, you can assign a VPA to the transaction and count both revenue and sign-ups.
Page Impressions: Finally, if your business model is a page-impression based advertising model, then your email marketing KPI will be the number of page impressions that an email generates. Unlike sales, sign-ups, or other types of transactions that can be tracked directly back to an email, you can't generally track a page impression back to an email unless you have sophisticated software. You may need to create this metric by taking the average page impressions for the three days after an email send and then using the increase over those to credit to your email.
Of course, it's always possible that your business needs an email marketing KPI that is entirely different from those listed here. The important thing to remember is that you want to tie something tangible, trackable, and, if possible, with a set monetary value to help you determine your email success.
Desirable Email Marketing KPI Numbers
There's absolutely no way to provide advice in a general way on what desirable email marketing KPI numbers for your unique business should be. The size of your business, the average transaction value, the conversions that you experience from different types of marketing efforts, whether your goods are luxury goods or not, and many other factors can determine what your expectations from your email marketing campaign should be. The good news is that, in most cases, there is no cost associated with sending an email campaign so you will make a profit even if your email marketing KPI and conversion percentage are very low. One of the most appealing aspects of email marketing is the consistently high ROI. However, you'll need to set your own performance targets and goals based on your unique business needs.
What Your Email Marketing KPIs Say about Your Email Campaign
If your email marketing KPIs aren't registering as high as you want them to be, that can indicate a number of issues with your campaign, including:
Non-Compelling Offer: The most obvious and common scenario is that, if your users didn't respond well to your email, you simply didn't give them a product, incentive, or information that they wanted. No matter how hard you market, if your product choice is bad or your discount isn't significant enough or your offer isn't compelling enough, you won't get a return on your email campaign. At the end of the day, what you put in front of your email marketing list has to be desirable to them.
Non-Compelling Marketing: It's also possible that you put a great product or offer in front or your email list, but you didn't market it well. Bad copy, bad images, grammar errors, bad branding, and a host of other email marketing best practices can make even the best offer fail. If you're sure that your product or offer was good, the next thing to check is the marketing collateral that you used to promote it.
Poor Email Design: We've discussed email template design at great length in this ebook. That's because a poor template design can mean that your recipients don't see, read about, understand, or have a clear path to click-through your offer to your website or landing page. Make sure that your template design is optimized using all of the best practices in this ebook before you send it if you want to ensure the maximum return on investment for your campaign.
Poor Deliverability: If your email send goes primarily to the junk or spam folder, or if it doesn't get delivered to your recipients at all, then your performance metrics will be incredibly low. Not many people regularly check their spam or junk folders, and if they do they often simply delete everything that is in there. If your offer is great, your marketing is great, and you have a great email template, then you might simply not be getting your email read by those who would purchase it.
The Bar is Too Low: If your email marketing KPI is based on overall revenue and it keeps falling short, you may not be doing a good enough job of convincing people to purchase higher-end or high-dollar-value products. Review your merchandising and marketing to ensure that you're not simply pushing people to sales, clearance items, or low-dollar amount goods in order to get a transaction that ultimately doesn't make any money for you.
Dead Email List: Your email list may simply be tired of your products or offers. If you're not constantly refreshing the content of what you send as well as constantly building your email contact list, then you may see low conversions simply because all of the email contacts who will purchase from you have already purchased from you.
Bad Email List: If you rented or purchased an email list, you may simply have a list of leads that are ultimately not interested in your product, service, brand, or company.
Unrealistic Goal: Finally, it's always possible that you simply set an unrealistic goal for your email conversion campaign. Review your expectations against the performance of your other marketing channels and determine if perhaps you were just unrealistic.
The failure of an email campaign to perform can be linked to one or several of the causes above. It may also be a factor that is entirely unique to your business or market sector. Finally, it may simply be a factor of timing and economies.
What Can You Do To Improve Your Email Marketing KPI Results?
If your email campaigns aren't returning the results that you'd hoped for, there are a myriad of reasons that fact could be attributed to. However, there are some basic changes that you can make and steps that you can take that should help improve your return from your email campaigns.
Send on the First or 15th of the Month: A little handy trick if your email is promoting a product or service that users will need to spend money on is to send it close to the first or the fifteenth of the month. Those are the days on which most workers receive paychecks and feel more mentally secure about making purchases.
Segment, Segment, Segment: The more that you can put a specific offer or product in front of a specific segment of your email list, the better. Don't just send to your entire list. Segment your list by purchase history, gender, geography or any other factor that you may be storing in your database that help you tailor an offer that's specific to that portion of your list. For example, if you sell skin care products, segment your email list by gender and send an email with skin care for women to the females and one with skin care products branded for men to the male list.
Test, Test, Test: As with any marketing campaign, the best move is to actively test different offers against each other. Try a fifty percent discount to part of your email list and a ten percent discount to another portion of your list. The ten percent discount may end up generating fewer transactions but ultimately making more revenue for you. Test different products, offers, discounts, and terms and conditions until you find the right "magic mix" that leads to high email conversions.
Audit Best Practices: As you may have noticed above, many of the reasons for a poor campaign performance from an email campaign may simply have to do with not following basic best practices for email design and sending. Audit your email program against all best practices covered in this book and make sure that you are following all of them. A bad email template, list, or sending practices can mean that your email campaigns will fail no matter what the content included is.
The most effective way to ensure that your email success is to use best-practices combined with a highly segmented list. Then test various offers against each other. In the end, it often takes time to develop a high-performing email campaign strategy. Take time, practice patience, and learn from your mistakes as you develop the list of best practices that translate into the highest possible returns for your email marketing or newsletter program.