This is a transcript from episode 62 of the OMGrowth podcast
I’m Lanie Lamarre and I’ve been called a monster for this practice – in fact, I’ve been called worse! – but this is how I read a novel: I read the first page, the last page, the first chapter, the last chapter, and then I read through the book. I know, I know, we’re 7 seconds into the episode and I’ve already upset a bunch of people but I’m not a big fan of surprises. Which is why I’m going to tell you straight-up that I have a shiny new book out called Email Marketing Optimization and there’s a link in bio for you to buy your copy as soon as possible because it’s a brand new release and those right-away purchases is what helps me rank and get found. And just know that I EXTRA appreciate that you support me even though you don’t approve of how I read novels. M’kay, let’s get into it.
Before we get into any discussion about engagement metrics and Key Performance Indicators – or what the cool kids like us call KPIs – let’s clarify what the difference is between a metric and a KPI.
A metric is something that you measure and can attribute a numbered value to that represents the outcome of something specific you’re doing. An example of this would be your click-through rate, meaning the percentage of subscribers you sent an email to who clicked on a link within that email.
Meanwhile, a KPI is also a quantifiable measure but it holds more weight than a metric because you are using this value as a measure of success, achievement or a target you were working towards attaining. This is why your KPIs will typically be made up of a combination of metrics. If we stick with the click-through rate example, it isn’t a KPI on its own because clicking on a link isn’t any type of indication for success; after all, someone could be clicking on the “unsubscribe” link and I doubt this is something you would define as a target. However, you may combine your click-through rate with some type of conversion rate – let’s say the conversion rate for your product/service sales – and take that to create a KPI for the conversion to sales you’re making from email subscribers.
You want to start by establishing your metrics and looking at them in isolation; however, it’s what you do with those numbers that make them valuable and when you use them to establish KPIs, this is one of the most “boss mode” things you can do with that data.
But again, being able to use and synthesize this data starts with knowing your baseline number, or metrics, so let’s look at the ones your email marketing service provider packages and provides you with.
EMAIL MARKETING SERVICE METRICS
I want to start with “open rates” – not because it is important but – because it is useless. Once upon a time, your open rate carried all kinds of value: it was an indicator of how many people were actually reading (or at least skimming) your emails, it helped you assess the popularity of your subject lines, it could even be a planning tool in terms of identifying what time of day your subscribers were most active.
Those days are behind us and you’ll get a lot of finger-pointing towards Apple’s iOS update back in June 2021 as the reason why. This update came with all kinds of privacy features, one of which included Mail Privacy Protection that stopped email tracking for Apple mail users unless consent to do otherwise was provided. As a plot twist to this blockade, email marketers actually saw increases in their open rates. Why? Because what Apple implemented didn’t actually block the tracking pixels from tracking but rather, all tracking pixels are pre-loaded; this means that emails that may not have been opened at all had those tracking pixels pre-loaded and therefore inflated email open rates beyond what they actually were.
TL;DR: Your Open Rates are unreliable.
Sure, you’ll find advice from people telling you that you can still use Open Rates if you segment your Apple mail users but that’s a short-term solution. I instead encourage you to accept the inevitable and to give your Open Rates the same treatment as that date you went on that you want to forget ever happened. That’s the vibe here.
Because for all the finger-pointing at Apple for doing this, you can look around and see this is a trend you’d do better to join the bandwagon on than to resist. According to Gartner, 65% of the world’s population will have its personal data covered under modern privacy regulations by 2023, up from just 10% in 2020.
Changes are coming from browsers and service providers in regards to cookie-blocking and limiting third-party tracking while international legislation will increasingly force marketers to behave in a more ethical, privacy-compliant manner with how they do business online. This is why I insist that you get onboard, adapt to and even embrace weird concepts like “consent” – yes! even as digital citizens! – because in an ironic twist of fate, those who do not are inevitably going to have consent forced upon them.
But as Forbes reassures us, the end of Open Rates doesn’t mark the end of email marketing and “the sky isn’t falling”… but clicks and engagement are now the new Open Rate against which you can measure engagement that matters.
Welcome to your new baseline email marketing metric that answers the question: “are my subscribers engaging with the emails I’m sending them?”
The title should describe it all but what we’re talking about is the rate at which your email subscribers click-through on the links you include in the emails you send.
A question I often get asked is “what is a good click-through rate?”… and I hate this question. The reason I hate it is because it assumes that the answer exists somewhere outside of yourself when it’s actually all very Glenda The Good Witch telling Dorothy “you’ve always had the power, my dear – you’ve had it all along!”
While you may hear people talk about what a “good” industry standard is, you already have your own results that are probably pretty good for where you are right now. That’s the great thing about any data sets you have: you know everything that went into getting that result, which puts you in a position to improve those same results in a way someone else’s “industry standard” never will. If you want a baseline for what a “good click-through rate” is, take your top 10 emails with the highest click-throughs and figure out what the average click-through rate is, and voila! you have what a good click-through rate is for you.
Another thing I would like you to start looking at is HOW your own click-through rates differ. For instance, your email marketing service will provide you with the click-through rate for your overall campaign, but I challenge you to look at how your different tags and segments engage with your emails.
Let’s use the example where you have an audience of fitness professionals: it would be valuable for you to consistently check-in on the different engagement levels you’re seeing from your fitness competitors versus your personal trainers versus your brand models/ambassadors.
Likewise, when you’re running a campaign that is heavy on the emails, it’s a good idea to really look at how engaged your audience is throughout the campaign, and if there are differences in how click-happy different segments or tags are, even within one specific campaign.
Because there are a lot of numbers you can look at and there are a lot of things that other people can tell you about what is “good” or what you should adopt as a “standard”; I say the grass is greener where you water it and for all the energy you would invest listening to others and comparing yourself to results you don’t have enough information to even know what it means, you’d be better off investing that same energy taking your own data the extra mile.
Because, yes, it can seem tedious to go through each of your emails and compare your different segments, tags, subject lines, and more. But it’s just as tedious to listen to what others are saying you “should” do and you’ll go a whole lot further investing all that energy into your own results than it would letting someone “should” on you. (Ew!)
If you’re feeling like “Lanie, I’ve sent so many emails! Where do I even start?” Just pick a series of emails you sent out that was part of a specific product push or promotion, or look at a sales sequence or automation you have in place. Establish “an idea” of what you’re working with and take that information to move forward. The idea isn’t to bog you down with stats but rather, to develop the habit of doing a little “lessons learned” at the end of any launch or promotion, and to check in with yourself as a quarterly review habit.
“Knowing your numbers” is NOT about obsessing over the numbers; it’s about using what insights you can gain to move forward, move faster and do better.
HARD AND SOFT BOUNCE RATES
When you look at your website analytics, your bounce rate represents the people who came to your site and left immediately, or if you’re a cool kid, you can say they “bounced”.
Because the world is an unfair place, your bounce rate means something entirely different when we’re talking about your email marketing analytics; it means your email could not be delivered to the email address you sent it to and it therefore “bounced”.
Since we’ve established the world as being an unfair place, let’s further complicate the matter by segmenting your email bounce rate as you have a “hard” bounce rate and a “soft” bounce rate.
A hard bounce means the email address you used is either invalid or you have been blocked from being able to send emails to this address. When you send an email from your inbox and immediately receive one of those creepy “mailer-daemon” replies, you’re in hard bounce territory.
A soft bounce, as the name suggests, is a more temporary issue than its hard counterpart. There may have been a problem with the email server at the time you hit send, the person’s inbox may be too full or perhaps your email used too many large images and GIFs, and could not be delivered.
While I usually advocate for establishing your own rates as a benchmark and to not rely on industry standards, your bounce rate is the exception to this rule. You never want either your soft bounce rate or your hard bounce rate to be higher than 1% as this can have an impact on your overall deliverability.
If this is something you’re concerned about, I have a whole module devoted to trouble-shooting this and more email marketing issues in my new book EMAIL MARKETING OPTIMIZATION and I encourage you to get your copy today – there’s a link in the shownotes- and if you don’t have a Kindle, you can download the Kindle app for free on any mobile device or tablet.
This one is pretty self-explanatory: it is the percentage of people to whom you sent emails that chose to unsubscribe from your email list.
Your unsubscribe rate will typically hold steady but the more people you send emails to, the more people you should expect will unsubscribe. This shouldn’t be seen as a bad thing and isn’t necessarily a reflection of how valuable other people view your content. There are a lot of reasons that people unsubscribe from email newsletters that have nothing to do with the sender: they may be receiving “too much” email overall and they’re doing an email purge, they may have signed up to your list using 2 different email addresses and they’re good with hearing from you just once, or maybe what you have to say and offer no longer connect with where they are in their own journey.
Unsubscribe rates are not a metric to take personally but having said that, you do want to keep your overall rate under 2-3%; if your unsubscribe rate is higher than that, you probably have other problems on hand (which I address in that aforementioned troubleshooting module in my book, Email Marketing Optimization) and you want to get some control over these before it impacts your deliverability rate (which we is also covered in the book).
According to DataProt, nearly 85% of all emails are spam, which translates to a daily average of 122.33 billion email messages per day. As for the other 22.43 billion emails, that’s the sweet spot category you want to be in. That’s because spam email is communication that is deemed as unwanted and solicited, and not only are they annoying to receive but they can also be dangerous phishing or malware attempts designed to collect and exploit your information or take over your devices.
Depending on the location of the recipient to whom you are sending email, there may have legislation in place to protect them from receiving these types of exploitative or junk emails, which we talked about in last week’s episode.
This is a matter that browsers and email providers take seriously. To avoid getting your emails labeled as junk, your spam rate must be kept below 0.1%. This is why you can be OK with people unsubscribing from your email list: you don’t want to send email to people who don’t want to receive it anyways because you’d rather have a few people leave your list than have all of your emails categorized as spam.
This is also why you don’t want your emails to be a machine-gun of sales pitches; your deliverability WILL be impacted if you aren’t providing value in your emails. In fact, here’s a fun exercise: check your email’s junk folder right now. You probably have emails in there from people whose email list you actually did sign up to so why are they sitting in the junk folder? I’ll let you draw your own assumptions based on your own experiences, but I’d bet the person sending these emails tends to be high and heavy on the sales pitches, and probably don’t provide a lot of incentive to open their emails regularly. This is another reason why you have to be considerate of your email strategy and make sure you’re sending things that people actually want to open, and that aren’t just about supporting your bottom line.
OTHER EMAIL MARKETING METRICS
Your email marketing service provider has some metrics but not all of them. There are other data points about your email marketing that you want to know and track that you will either have to get elsewhere or you’ll have to calculate yourself.
Since we’re on the subject of spam and deliverability, let’s talk about your deliverability rates. We talked a little bit about this in episode 41 and we cover this in my new book, but you’ll want to run an email deliverability test using a service like GlockApps to assess how your emails are being delivered to various recipients (like Gmail, Outlook, etc.) and get your finger on what your sender reputation is. After all, the first thing to improving your email marketing results is making sure they’re actually getting into the inboxes to which you’re sending them.
The goal will seldom be to score 100% on your deliverability. For instance, you can see a test I ran below has me scoring a 93% deliverability.
However, when I click through to see which recipients are labeling my emails as spam, I can see it is people with email addresses that end in @yandex.ru and that’s fair because the top-level domain “.ru” means this is a Russian address. But my emails aren’t written with Cyrillic letters; they’re written in English and it’s fair for them to see this as suspicious. I also don’t have anyone in my email list who is subscribed with a @yandex.ru email address. As such, it isn’t worth it for me to focus on improving this value that really doesn’t have much to do with my performance.
However, you do want to have and keep your finger on the pulse of this metric to make sure your emails continue to see the light of day.
LIST GROWTH RATE
According to HubSpot, your email list degrades by 22.5% every year – meaning that is the overall percentage of people who unsubscribe or otherwise stop opening and engaging with your emails – and you therefore always want to be aware of how your growth is happening and work at growing your list to make up for those lost contacts.
By keeping tabs on your list growth rate, you can ensure your list growth is outpacing your list attrition. You can integrate this calculation into your quarterly review process and to do so, you’ll need the following data points for a specific time period:
- Total number of email subscribers;
- Number of new subscribers; and
- Number of unsubscribes.
You’ll then calculate (New subscribers) – (Unsubscribers), then you’ll divide this by the total number or people on your list, and finally multiply by 100.
I love examples so let’s make one out of this calculation: you have an email list of 2,000 people at the end of this quarter, and you added 400 of those this quarter while 150 unsubscribed.
This means 400 – 150 = 250 / 2000 = 0.125 x 100 = 12.5%.
INSERT IMAGE: LIST GROWTH RATE
This metric can be especially valuable when tracking specific strategies you’re employing. For instance, you can keep your eye on the specific list growth happening with your ads/paid traffic and keep on top of the trends in terms of what you’re spending versus what you’re getting in return. After all, just because someone signed up to your email list from an ad you ran doesn’t mean they stayed there.
Likewise, if you’re going to focus on list growth prior to a launch, it’s good to set some benchmarks in these regards and see how these numbers impact your overall launch performance.
You probably won’t have this metric on hand for your overall campaigns but there are instances where you’ll want to track what is called your response rate. This is the percentage of people who are actively engaging with your email by communicating something to you.
These are useful when you’re sending out surveys or asking people for feedback. You’ll calculate this by taking the number of people who responded to your emails and divide it by the number of people to whom you sent the emails and then multiply by 100.
INSERT IMAGE: RESPONSE RATE
For instance, say you have an automated sequence designed to go out to people who have bought a specific product of yours and one of the emails in that series includes a call-to-action to provide a testimonial. You received 20 testimonials last quarter from the 125 sales you made.
This means last quarter’s response rate for your product’s testimonial request was 16%, or 20 testimonials / 125 sales = 0.16 x 100.
Again, you’re not going to track the response rate for every single email you send out. You want to be especially strategic about tracking these because 1) these have to be done manually and 2) you need to have and know your reason for collecting this data.
Some good reasons may include testing different subject lines or calls-to-action, switching out the order of your engagement-focused email delivery to see if timing is a factor in whether people are more or less likely to engage with you, or even to change the positioning of your options as buttons within your email versus redirecting them to a form on your website.
SUBSCRIBER VALUE/REVENUE PER SUBSCRIBER
If you use an all-in-one system that houses your sales pages and cart processing like I do with Kartra, the platform itself will provide you with your email subscriber value and I’ll provide a link for what that looks like in the shownotes. Your subscriber value may also be called your revenue per subscriber and it serves to indicate what every subscriber is worth to you.
This will be one of the most valuable metrics for you to know when you’re ready to invest in areas like advertising because it helps you forecast how much you can afford to spend to attract a lead and how much you can expect to make from each lead you attract.
If your service doesn’t automatically calculate this for you, you can calculate this for yourself by taking the revenue you’ve made from your email list over the last year and dividing it by the number of subscribers you have.
INSERT IMAGE: SUBSCRIBER VALUE
Let’s say you made $100,000 in revenue from your email list last year and you have a list of 5,000 people. This means that each email subscriber was worth $20/year to you.
Start with an annual baseline as your benchmark and then depending on the frequency of your reviews, integrate this calculation as a regular part of your monthly or quarterly “health checks”. You’ll want to continue seeing this number on an annual basis seeing as some quarters are more launch- and sales-focused than others, and you’ll want to keep that overall view. But if you are getting into advertising, it’s a good idea to tag those specific subscribers as such and look at what that segment of your email subscribers are valued at as a means of forecasting your paid promotion profit margins even more efficiently.
Last but certainly not least, we have to talk about your email conversion rates. Now I have some strong thoughts and feelings about how people speak about their conversion rates, and I go into this in my book on publishing, tracking and improving your overall digital marketing campaigns and strategies called Results On Repeat.
But when someone says something like, “My launch converted at 20%”… I’m over here asking, “converted what to 20% of what?”
Because to calculate a conversion rate, you need a beginning and an end. If we stick with this example of a launch, you could convert 30% of your email list to sales for your launch, but you could also convert 30% of your email list to visits to your launch sales page… and these are two very different stories being told.
I would even venture to say that “email list” isn’t a specific enough starting point; after all, you’re likely to be segmenting your email list and you can expect to see a very different conversion to sales from your general email list than you would see from the much-warmer segment of people who were on the waitlist for your next launch.
This is why I’m always suspicious of the use of vague, undefined conversion rates in other people’s marketing, and why I encourage you to focus on your own test paper. When you’re looking at your own specific numbers, based on your own specific segments that you are clear about, you’re able to understand WHAT your conversion rates mean, how they’re showing you the areas for optimization and you get to define success on your own terms and numbers, literally.
So now what? Now is when I strongly encourage you to get EMAIL MARKETING OPTIMIZATION, my new fresh-off-the-presses book because we’re covering the A-to-Z of email marketing optimization and it’s at a price that everyone can afford.
Broadcasts, flash sales, email challenges, welcome sequence, evergreen sequences, surveys and testimonials, re-engagement sequences, and more are all covered in EMAIL MARKETING OPTIMIZATION. Every campaign is mapped out – literally, with process maps and workflows – showing you what to track, how to track it, and what you can do to improve your email marketing results and your link is in the shownotes.
Don’t forget to leave me a review – you’d be my top shelf favorite if you left a positive, glowing review here where you’re listening to this podcast as well as over on Amazon. In fact, I get such great feedback in my DMs and my emails, but nobody else is seeing that but me and when you submit those same kind words as a review, the benefits are exponentially huger for me so please, if you think I’m the bee’s knees, don’t keep that to yourself. Make it an OMGrowth moment for ME, okay? Okay. We’ll talk soon, baiieee.