It is estimated that over 340 million emails will be sent and received, every single day, in 2023.
And with over 41% of marketers reporting that email is very critical to the overall success of their company, it’s clear that email marketing still remains an incredibly powerful tool.
However, sending out emails is just the beginning.
To harness the true potential of email marketing, businesses require a strategy that goes beyond simply hitting “send.” Instead, all email activity should have a clear purpose alongside planned success metrics by which actual performance can then be measured. In turn, this ensures the ability to accurately measure the impact and influence email has on marketing objectives and the wider business.
In this guide, we’ll explore the essential steps to measuring the real effectiveness of your email marketing strategy. Including the relevance of business objectives, key metrics to measure, the importance of attribution, and much more.
- Linking channel metrics to business objectives
- Metrics to measure
- Benchmarking based on industry standards
- Benchmarking based on past results
- Marketing attribution throughout the customer journey
- Presenting your results
- The test-and-learn approach
- Next steps
Linking channel metrics to business objectives
Let’s begin by talking about business objectives.
It’s easy to get caught up in so-called ‘vanity metrics’, for instance, the amount of opens your emails have received. Yes, opens may be part of your overall measurement story, but it’s the clear success measures such as conversions, event attendance, or downloads which truly ensure clarity.
Additionally, to ensure the time and resource you are spending on email marketing is resulting in true measures of success, the metrics you monitor should be closely linked to wider business objectives. Ensuring efforts contribute directly to the bottom line.
Consider the following steps to ensure your metrics are aligned with the wider business:
Identify your business objectives
What are the high-level goals and strategic focus areas of your business? And are there deadlines tied to these?
Filter these into departmental goals
Use business objectives to set departmental goals that directly align. For instance, if the business needs to increase revenue, how can email marketing achieve this?
The final step is filtering these objectives and goals into specific email campaign targets. For instance, how much attendance did an email campaign promoting an event generate? These may change from campaign to campaign, but again, should always tie into higher business objectives.
Metrics to measure
Once you have established business objectives, you will want to explore the range of metrics available to teams and individuals to reach these targets.
By concentrating on these metrics, you can measure the actual impact of email campaigns on your bottom line, and in turn, calculate ROMI (return on marketing investment) alongside tangible financial results, more accurately.
Measure the marketing investment your business spends on email marketing campaigns against the revenue those campaigns generate.
(Sales Growth – Email Marketing Investment) / Marketing Investment.
Track how much overall revenue your email marketing generates for your business.
CAC (customer acquisition cost)
Calculate the cost of acquiring new customers through email marketing compared to retaining existing ones.
CLV (customer lifetime value)
Estimate the total value of email-generated customers over their lifetime.
(Average Purchase Value) x (Average Purchase Frequency) x (Customer Lifespan).
Analyse customer actions post-email by measuring the percentage of recipients who take desired actions, e.g., making a purchase or completing a form.
Average Order Value
Understand recipients’ purchasing behaviour by determining how much they spend through email marketing.
(Total Revenue from Email) / (Total Sales through Email).
Benchmarking based on industry standards
Another element of measuring your email marketing success is benchmarking by industry standards.
This is a great option if you don’t have access to prior results, or if you simply want to see how your marketing efforts stack up against the competition.
That being said, there are some pros and cons to this practice.
Pros of industry benchmarking
Industry benchmarks provide the perfect basis for comparing your email performance with others in your industry, whether they are peers or competitors.
Set realistic goals
It can be easy to set goals which are unreachable when you’re working in a bubble. Benchmarking by industry helps you to understand what is achievable in your industry, allowing you to set goals that are realistic.
Benchmarking can guide your marketing resource allocation in a strategic way. By understanding where your peers are investing their time and resource, such as content type, design, and automation, you can identify areas to invest in to keep up.
Cons of industry benchmarking
Data can be generic
Industry benchmarking data tends to provide generic averages which don’t account for unique elements of your business or audience. Your business may differ from others in your industry, meaning your objectives need to be tailored to you.
Little to no context
Often benchmarks will lack context, failing to explain how certain metrics are achieved, or if they are of importance to other businesses in your industry. Meaning you can end up following them blindly.
Email marketing is a constantly evolving landscape, meaning that benchmarks can quickly become outdated. Therefore it’s essential to keep up to date with the latest benchmarks and trends to ensure your objectives are reliable.
Relying solely on benchmarks within your industry can stifle the creativity of your team’s activity and the objectives that are individual to you. By limiting yourself to what is considered ‘normal’ in your industry, you may be missing opportunities.
Benchmarking based on past results
If you have the data, another option for setting KPIs is benchmarking based on your own past results, especially when looking at MoM (month on month) and YoY (year on year) comparisons. This allows you to gain useful insights into what previous campaigns and activity worked, and what didn’t.
As always, there are some pros and cons to this process.
Pros of past results benchmarking
By using past results you can make YoY comparisons which provide excellent insights into your own personal long-term trends. Helping you to identify the activity that has contributed to growth, or decline, over a broader time frame.
YoY data also helps you to identify any seasonal patterns and trends that are contributing to your email marketing successes.
Both YoY and MoM results provide a high-level view, allowing you to easily assess the overall success of your email marketing campaigns and use these insights in your benchmarking.
Cons of past results benchmarking
Whether it’s due to a lack of activity or a lack of tracking, some businesses may not have access to a wealth of past results and campaign data to benchmark against.
By focusing too much on your own past results, it can be easy to miss new trends and best practices, leading to a business that lacks innovation and agility.
Benchmarking purely through your own past results can lead to reliance on outdated standards, particularly if your industry is rapidly evolving.
Marketing attribution throughout the customer journey
Part of aligning your email marketing with the wider business is understanding how it contributes to the customer journey, and measuring marketing attribution at each stage.
When measuring marketing attribution, you will need to assign value to each interaction a customer has with your brand throughout their lifecycle, which will help you identify which marketing efforts are most effective.
Email marketing will often serve as one of the first touchpoints within the customer journey by capturing a prospect or lead’s attention. Through the use of marketing attribution, you can track how these email interactions go on to influence later conversations and behaviour through other channels. Ensuring that the impact of your email marketing is recognised.
Nurturing and engagement
One of the most popular uses of email marketing is to nurture prospects and maintain engagement throughout their lifecycle. Whether that be through the sharing of content, promotions, or anniversary emails.
By tracking email attribution, you can recognise the contribution that email is playing in moving a prospect or lead closer to becoming a customer.
Conversion and sale
There are lots of opportunities for securing a conversion or sale with email, from exclusive offers, to timely sales, and product promotions. Attribution models can focus on the impact of email marketing through the entire customer lifecycle, as well as the point of sale, to establish how this channel has contributed.
New customers are exciting, but existing ones are just as important for long-term, reliable revenue. Through email marketing, businesses can keep customers in the loop, send personalised and tailored content, and keep them engaged with your business.
By measuring attribution at this stage, you can identify the impact email has on not only keeping customers loyal, but also encouraging ongoing purchases.
Presenting your results
Presenting your results isn’t always a one-size-fits-all process. Instead, to ensure all key players are as engaged as possible, results should be presented in a way that each department (or even individual) can relate to and understand.
Here are a few ideas:
Executive summary for Leadership Teams
For the senior members of your business, provide a concise executive summary which highlights the big picture of the impact email has on the wider business. Focus on business-wide objectives such as revenue and ROI, highlighting the contribution that email marketing directly plays.
Detailed reports for Marketing Teams
Marketing Teams will need the most information regarding your email results, so offer comprehensive information that dives into the specifics. Consider detailed metrics from open rates through to ROMI. And go on to discuss the next steps, strategic plans, and targets that relate to the team.
Data for the Sales Teams
Sales Teams will be particularly interested in how email impacts leads generated or end-sales and conversions. Highlight lead quality and conversion data which emphasise how email marketing contributes directly to the sales funnel. And share insights into preferences and behaviour to aid in their own understanding of prospects and customers.
Whether you are presenting to creative teams, or you simply want to enhance overall engagement, visual storytelling is the perfect way to help others understand the “so what?” of your results. This can be achieved through compelling visuals, videos, case studies, and timelines. Alongside simple graphics, iconography, and use of colour.
The test-and-learn approach
Measuring email marketing isn’t just about tracking past performance, it’s also about driving ongoing improvement and innovation. Leading to better email campaigns and results.
Through regular testing, we can access a wealth of data based on what is working and what isn’t, using this information to refine our email campaigns on an ongoing basis. To enable this, we recommend using a structured test and learn framework, which can be broken down into the following steps:
Set a hypothesis
Begin by setting clear hypotheses and objectives for each test. These should align with the objectives we discussed at the start of this guide, and those that are being filtered down into team and individual goals.
Set up an experiment
Once your objectives are established, set up a controlled experiment with the use of specific test and control groups. Consider the variables you wish to test, such as subject lines, email content, segments, or send times. Then compare the performance of the test group to the control group, so that you can measure the impact of your changes.
Analyse the data
One of the most crucial steps is to collect and analyse the data from your experiment. Make the most of your email marketing and analytics tools to track these results, considering metrics from open and click-through rates to conversion and revenue generated.
Last but not least, it’s time to delve into the data to gain insights and learn. So that this step is easier, we recommend testing one or two variables in each experience so you can determine what has had an impact on your results, and refine your strategy and campaigns accordingly.
At Jarrang we are advocates for the importance of measurement as part of your overarching email strategy.
Without a solid measurement process in place, it is near-impossible to understand the impact your efforts are making not only on marketing targets but also wider business objectives.
If you want to gain deeper insights into how your email marketing is performing, or are looking to embed the principles of measurement into your marketing strategy, then get in touch.
Our team of email experts can help you join the dots to understand your email successes and limitations, and how they impact the wider business.