Measure the Success of Your Email Campaign

Most marketers will tell you that, if you can’t measure it, you can’t improve it. That philosophy is just as important in your email campaigns as it is in any other form of marketing you might try.

Marketing your products or services through email is much more challenging today than it was in times past, mainly because spammers have basically ruined the medium for everyone (including themselves). Now, it might sound a bit hypocritical to be faulting spammers in an article that talks about email marketing, but there is a big difference between sending unsolicited messages to a random audience versus sending targeted messages to an audience that has asked to hear from you. The first is spam; the second is a form of customer service.

Many factors can influence the effectiveness of your email campaign, so it helps to test different approaches. Like any marketing process, you need to establish metrics that tell you how well one approach works when compared to another. If you don’t measure the success of your email campaigns, you are just shooting in the dark every time and hoping for the best. That is a good way to waste your valuable marketing budget.

Instead, you should find something that works, make that your "control," and then experiment to find something that works even better. You can always fall back on your control if the results of your experimentation are disappointing. This deliberate probing of your audience helps you refine your message to be as effective as possible. But you can’t do it unless you measure your results.

Email Marketing Metrics

All marketing shares a common goal: conversion. You are usually trying to get the customer to sign up for something or buy something. But you can do a lot to influence conversion long before the customer clicks that buy button.

Every marketing medium takes your customers down a different path to reach a buying decision. Internet marketing and email in particular, allows a surprising number of measurement points that let you see how well your customers are responding to your message as they travel the purchasing decision path. This article introduces some of the metrics you can use to measure the success of your email campaigns.

Email Metric Overview

Before I get into the details of email metrics, I’d like to take you through a quick walk-through of the customer experience and point out where the measuring points come into play.

Your first goal is to get your message to your customer. You must get through their spam filters and challenge/response systems. You must avoid being black-listed. Your email server must be properly identified as a valid sender for your company. All of these challenges relate to your campaign’s deliverability, which is how many of your messages reach their intended recipient.

Getting your messages into your customers’ in-boxes is just the first hurdle. Now your message must interest your customers enough to get them to open the email and look at it. The percentage of people who actually see the message is called your open rate.

Even if your customers do open your message, you need them to take the next step and click through to your Web site or pick up the phone and give you a call. Your click-through rate measures how well customers respond to your offer.

Finally, if everything goes according to plan, your customer buys something from you. Your conversion rate measures how many people reached a purchase decision based on the message you sent them.

I’ll explain each of these metrics in more detail and explain how you collect and assess each one.

Measuring Deliverability

Deliverability measures how well your messages are reaching your customers. Your email message must jump many hurdles on the way from your email server to your customer’s, so you need to be prepared to deal with them.

Unfortunately, deliverability can be difficult to measure. Your first indication of a problem is when messages are bounced back to you. However, mail servers don’t always bounce messages: sometimes the server accepts them and then deletes or quarantines them later. It may be necessary to set up a test account or two in each of the major email services, such as AOL, Hotmail, and Gmail. If your test accounts don’t receive your message when you send out an email campaign, you can bet many of your customers aren’t receiving them either.

You can avoid rejection problems to some degree by carefully crafting your content. Many email campaign tools give you a spam index, which is a relative measure of how the content filters on email servers will see your message. A high index usually means you’ve used too many terms or phrases that make your message look like spam. You should adjust your content until you get a reasonably low index.

Another filtering mechanism used by many ISPs is black lists. Several email watchdog organizations keep track of IP addresses and domain names that are known sources of spam. If you regularly send bulk email, you are almost guaranteed of being listed on one or more of these lists at some point. It can be quite a job to get off of them too. Sometimes, you are only guilty by association: if you send through a shared email server and someone else on that server gets black-listed, your campaigns may be affected as well.

Even if your messages make it over the black list and spam filter hurdles, your customers may have tools that set up another line of defense. Challenge/response systems are one example. These systems quarantine all messages from unknown senders until the sender responds to an automated challenge. You should make sure that the return address on your message goes to a monitored account so you can respond to these challenges. To reduce the number of challenges you get, you should ask your customers to "white list" your domain or sending email address when they sign up for your email list.

If your list is large enough and lucrative enough, you should consider using the services of a company that specializes in helping companies with email campaigns. With a large list, managing deliverability can become a full time job.

Measuring Open Rate

Deliverability issues aside, assume for a moment that your email made it to your customer’s in-box. That still doesn’t mean the customer will actually open and read the message. You may have won your way through the mail server labyrinth only to have the customer delete the message without reading it.

Your open rate is the percentage of how many people open your message out of how many messages you sent. A better measure would be to compare how many were opened out of how many were received, but as I explained in the deliverability section, that figure can be tough to determine exactly.

So, how do you measure your open rate? Using today’s rich email formats, like HTML, you can include images in your messages. Those images can be pulled from your Web site, which means your Web server logs have a record of every time the image is retrieved. In essence, that is how most email campaign tools track your open rate. They often add a special "tracking pixel" to your message that triggers a counter of some kind when your customers open the message. Some of these "counters" are quite sophisticated and go well beyond a simple Web log entry.

I should point out here that if you send plain text email only, you really don’t have a way to trigger a tracking mechanism, so you won’t have a way to track your open rate.

Open rate should be viewed as a relative measure to compare campaigns, and not as a definitive measure for a particular campaign. Several factors can interfere with it. For example, some of your customers may have the preview window turned on in their email client. The preview window will trigger your open tracking even if the customer did not intentionally open or read the message. Also, some email client programs turn off images until you explicitly enable them. In that case, the customer may have been interested enough to open the message, but your tracking mechanism won’t be triggered.

Open rate is most often used for subject line testing. If you think about it, your open rate does not measure the effectiveness of your content because the customer has not seen your content yet. Instead, open rate measures the effectiveness of your subject line.

To improve your open rate, try two or more different subject lines the next time you send an email campaign. Split your audience and send one subject line to one subset and the other subject line to the other subset. Your open rate will tell you which subject line appealed most to your customers.

Even though open rate is not a particularly accurate measurement, used comparatively, it is still a useful tool for improving the success of your email campaigns.

Measuring Click-Through Rate

If all the stars have aligned so far, you have successfully gotten your message delivered to your customers’ in-box and you have caught their attention with your subject line. The next step is to get them to accept your call to action.

Presumably, your email campaign is designed to get customers to sign up for something or buy something. The content of your message should be compelling and clearly explain the benefits of taking the next step. That next step is your call to action. The call to action might be a phone call, but more often, you want customers to click through to your Web site.

When customers click on a link in your message, they are "clicking-through" to the next step of your offer. Your click-through rate is calculated as the number of customers who clicked a link out of the number of messages you sent. You can use your click-through rate to determine how effective your message content is at convincing customers to take the next step. If your message has multiple links, you should measure the click-through rate of each link separately.

There are a couple of ways to measure click-through rate. One way is to append a special code of some kind onto the end of the URL. When customers click the link, that code is logged in the Web site’s log files. You can then use a log analysis tool to count how many requests included each code.

Another way to measure click-through rate is to use the facility that is built into many email campaign tools. When you enable click-through tracking in these tools, they replace your URLs with their own URLs that include a unique link identifier. Then, when customers click a link in your message, the replacement URL funnels the request through a Web server that counts the link identifier before forwarding customers on to the original URL that you provided. You can later review the click-through rate of your campaign using reports provided by the campaign tool.

While open rate measures the effectiveness of your subject line, your click-through rate measures the effectiveness of the marketing copy in your message. If you have a good open rate but a poor click-through rate, then you are probably doing a good job of hooking customers in with your subject line, but not doing a good enough job of explaining the benefits of what you are offering. The key to a good click-through rate is relevance. If your offer is relevant to the audience that receives your message, you will enjoy a higher click-through rate than if you send the same message to a more general audience.

What is a "good" versus "bad" open or click-through rate? It really depends upon the kind of message you are sending. You might send out a free newsletter with great free information and have ads sprinkled throughout. Your subscribers probably have a high open rate because they want the free information. However, the click-through rate on your ads might be very low because what you are selling does not appeal to the newsletter audience. On the other hand, you could get a higher click-through rate if your ads are relevant to the subject matter and have well-written copy extolling the benefits of the products or services they advertise. Pure advertising messages usually have a low open and click-through rate compared to content-rich newsletters with relevant ads.

Measuring Conversion Rate

The final point of measurement in most email campaigns is at the moment your customer finally clicks a button that accepts your offer. This is where an anonymous Web site visitor becomes one of your valued customers. Your conversion rate tells you how many visitors make that transition.

Conversion rate is a measure of how many email recipients placed an order with you or otherwise committed themselves to whatever it is you are offering. These are the recipients who jumped through all the hoops I’ve written about so far: they’ve opened the message, clicked on a link, and now finally clicked the Buy button or took some other desired action.

Usually, a link in an email advertisement takes the customer to a Web page that explains more about the offer and includes a Buy button. In some cases, the email link may add the item to the customer shopping cart and show the first page of the checkout process. In either case, the message recipient has just transitioned from your message to your Web site. But how do you tell them apart from all of the other Web site visitors? And how do you tell which email campaign caused them to respond? They could be clicking through from a message you sent two weeks ago.

Measuring the conversion rate of a specific campaign can be challenging. The simplest approach is to know the average conversion rate of your site and measure the bump you get after you send out an email campaign. This approach isn’t terribly accurate, but it is fairly easy.

If you really want to know the conversion rate of a specific campaign, you have to use more sophisticated techniques. The key here is to use some kind of offer code on the link that takes customers to your Web site. The offer code should uniquely identify the email campaign, and your shopping cart software must somehow stamp the order with that offer code.

If your shopping cart software does not offer any tracking tools like I just described, you can sometimes get your customers to do it for you. One way to do that is to include some kind of coupon code with each offer. You provide a different coupon code for each email campaign so you can track the order back to the campaign that inspired it.

Now that your Web site has entered the mix, it contributes to the marketing metrics as well. As soon as visitors click through from a message to the Web site, you are measuring the effectiveness of your Web site to close the deal. If you have a high click-through rate but a low conversion rate, the problem is probably in your Web site, not your email campaign.

Optimizing an Email Campaign

Now that you understand the metrics, you can use them to optimize and troubleshoot your email campaigns. After every campaign, you should sit down and analyze what happened. Step through the metrics one at a time and compare them to your other campaigns.

What follows is a summary of each metric, how you measure them, and how you optimize them.

• Deliverability: Use test accounts and watch for bounces. Tweak the subject line and content to minimize your spam index. Send only to customers who have explicitly requested your messages.
• Open Rate: Use HTML messages that include a tracking pixel. Tweak the subject line to make it compelling.
• Click-Through Rate: Use a link redirection tool that counts each click and sends the visitor on to the appropriate page. Tweak the marketing copy to improve response.
• Conversion Rate: Use an offer code or coupon that gets associated with each order placed as a result of the email campaign. Tweak the site copy to maximize cart adds and the checkout process to minimize cart abandonment.

If you are committed to growing your business through email marketing, then you really should invest in good tools that help you measure the metrics I’ve just described. Now at least you know what to look for! A good email campaign tool gives you ways to measure your open rate, your click-through rate, and even your deliverability to some degree. A good shopping cart program lets you track offer responses and can report the conversion of those responses.

Customer responses are so subjective that becomes a game of trial-and-error by necessity. But don’t mistake subjective response for random behavior: a pattern always emerges if you are able to watch for it. If you carefully measure customer responses to each change you make in your marketing message, you will learn valuable information about what drives your customers to make purchasing decisions. For a marketer, there’s no better information than that.