Email marketing is an essential aspect of any e-commerce business, and it's important to have the right metrics in place to measure the success of your email marketing efforts.
One of the most important (and often overlooked) steps in executing a successful email marketing strategy is analyzing how your customers respond to your emails and applying what you learn along the way.
But most companies only track open and click rates or the total revenue coming from their emails. The problem is, this doesn’t paint the full picture of how their email marketing is directly affecting their bottom line nor provide actionable insights to improve email performance
Here are the most 6 important email marketing metrics that e-commerce brands should be measuring to ensure that their campaigns are effective and driving revenue:
1. Percentage of Revenue
Let’s say you’re making $10,000 from email every month. That sounds pretty great right?
Maybe.
It is, if your ecommerce store is generating $30,000 in revenue per month. But it's a sign of underperformance if your ecommerce store is generating $150,000 in revenue per month.
Most ecommerce stores make the mistake of only tracking total email marketing revenue.
Instead, monitor how big a slice of your revenue pie is coming from email marketing and adjust your strategy accordingly. A good benchmark is to have 20-30% of your total ecommerce store revenue coming from email, with about 10-15% coming from flows and 10-15% coming from campaigns.
And what should you do if your email revenue isn’t hitting the mark?
Run an audit on your email marketing performance so you can take a look at what’s underperforming. If it’s your flows, you need to take a look at which ones you might be missing that could be critical for your business. If it’s campaigns, you might need to adjust how often you’re sending them.
2. Revenue Per Recipient ($/recipient)
This metric measures the revenue generated by each recipient of your email campaigns. It's important to track this metric because it allows you to see which groups of customers are generating the most revenue, and how effective each email is at generating revenue.
Most companies only track the total revenue an email campaign generates. But as your list size and business grow, you’ll naturally see that revenue increase and it doesn’t give a good indicator of whether you’re making the most out of your list.
For example, imagine generating $10,000 from a campaign sent to 5,000 people versus generating the same amount from a campaign sent to 1,000,000 people. That $10,000 made from 5,000 people reflects a much more successful monetization of your list.
And if you’re finding that the revenue generated per recipient is low, you’ll need to make your list more effective by analyzing your messaging, finding out if you’re sending emails to the right people at the right time, and perhaps doing some list cleaning.
3. Average Order Value
This metric measures the average value of an order placed by a customer after receiving your email campaign.
Email AOV is generally higher than on-site AOV since email customers are better nurtured and better understand the value of your products. A good rule of thumb is that email AOV should be about 15-20% higher than your on-site AOV.
It's important to track this metric because it allows you to see how well your campaigns are driving high-value purchases and whether your efforts to nurture & educate customers result in them spending more money.
If your email marketing efforts are producing a low AOV, you likely want to examine how effectively you’re communicating value to your customers. As yourself, is your messaging is relevant and valuable to your audience? Are you addressing customer FAQs and pain points? Are you demonstrating social proof? Look for ways to ease any friction that your customers might experience within your email sales funnel.
4. Open Rate
Open rate is a key metric to track in email marketing because it measures the effectiveness of your subject line and sender name in capturing the attention of your audience. A high open rate indicates that your subject line and sender name are resonating with your audience, while a low open rate may indicate that your subject line and sender name need to be improved.
For e-commerce companies, a benchmark open rate is typically around 20-30%. However, this can vary depending on factors such as the industry, the type of audience, and the quality of the email list. It's important to note that open rate alone is not a complete indicator of the success of an email campaign. It should be considered alongside other metrics such as click-through rate and conversion rate.
If your open rates are low, spend time A/B testing different subject lines to determine which subject lines resonate with your audience and get more people to open the email. However, don't forget to also evaluate the topic of your emails and your segmentation to make sure you're sending emails that are relevant and interesting to your audience.
5. Click Through Rate
Click-through rate (CTR) in email is a metric that measures the number of people who clicked on a link within an email campaign, divided by the number of people who received the email. It's a key metric to track in email marketing because it measures the effectiveness of your email content and call-to-action in driving engagement.
A high CTR indicates that your email content and call-to-action are resonating with your audience and encouraging them to take action, while a low CTR may indicate that your email content and call-to-action need to be improved.
For e-commerce companies, a benchmark CTR is typically around 2-5%. However, this can vary depending on factors such as the industry, the type of audience, and the quality of the email content and call-to-action. It's important to note that CTR alone is not a complete indicator of the success of an email campaign. It should be considered alongside other metrics such as open rate and conversion rate.
If your click-through rate is low, evaluate your email layout to ensure it's optimized for conversion. This includes factors such as the number & placement of call-to-action buttons, header design and copy, product recommendations and more.
A tool like Backbone can also help improve your clickthrough rate by producing conversion-optimized email layouts.
6. Purchase-Through Rate
Purchase-through-click rate (PTC) in email is a metric that measures the number of people who made a purchase after clicking on a link within an email campaign, divided by the number of people who clicked on the link.
PTC is a less common, but much more useful, metric than the typical purchase rate that most ecommerce brands track.
It's a key metric to measure the effectiveness of your email campaign in driving sales and revenue. A high PTC rate indicates that your email campaign is effectively converting clicks into purchases, while a low PTC rate may indicate that your email campaign needs to be improved in terms of content, call-to-action or targeting.
If you have a low purchase-through rate, evaluate your email content to ensure you have persuasive and relevant copy that would encourage potential customers to make a purchase. It is also effective to audit the types of products that are being recommended within your email to ensure it is relevant to your audience.
The Bottom Line
Tracking the right email marketing metrics is essential for any ecommerce store to ensure that their campaigns are effective and driving revenue.
By measuring these 6 basic email metrics, you'll gain valuable insights into the performance of their email marketing campaigns and make data-driven decisions to improve them to drive more revenue for your ecommerce store.
Because when you know how your customers are responding to your emails, you’ll be able to optimize your email performance through A/B testing subject lines & email content, as well as improving segmentation and strategy.
But tracking and analyzing these metrics can be time-consuming and complicated. You can use a tool like Backbone to improve your email marketing performance by having optimized email marketing calendars and email layouts generated for you, automatically.