Email Marketing Metrics & Improving Performance

Improving Email Marketing Performance

Personalisation

Creating a personalised email for each recipient can boost open rates, click-through and deliverability. Your email software should make it easy to pull in customer data from your list to give each email the distinctive touch.

Optimise for Mobile

With the rise of Smartphones, the majority (51%) of email is now opened on a mobile device (Source Return Path). Optimise your email for mobile by using responsive design, which is easy to read and engaging with a clear call to action.

Segmentation

Once you have built an email database, segment this list into more specific groups to send separate groups targeted campaigns. For example, you should send different emails to customers at various stages of the buying cycle.

Successful segmentation will lead to fewer unsubscribes, a higher click-through rate and increased engagement as you send more relevant content to users.

A/B testing

If you send out a big email campaign, you may wish to perfect the content before sending it. A/B testing allows variations of the email to be trialed on small subsets of users (A and B) before the mail is sent to the main group of users (group C). After sending the variations, your email service provider should then tell you which performed the best using your chosen metrics.

A/B testing can be run on all aspects of an email, including subject line, content and offer type (e.g., fix amount of percentage).

Measuring performance: Email Marketing Metrics

Before launching an email marketing campaign, it is essential to understand your goals to know if your campaign is successful. Several key email marketing metrics can help you benchmark the performance of your campaigns.

List Size and Growth

The more emails collected from customers or captured from website visitors, the more extensive your email database and the more potential customers you can reach to grow sales. Your email service provider should enable you to monitor this vital metric to see how many new subscribers are added on a weekly or monthly basis.

Open Rates

The open rate is the percentage of recipients who opened the emails they received. The average rate varies by sector but is around 15-25% (Source: Campaign Monitor). The following factors influence the rate:

  • Subject line. The subject line, along with the preheader text and the sender’s name, is the first thing your recipient will see when they receive a mail and so needs to be compelling.
  • Preview text. Most email clients show preheader text next to the subject line. With most email service providers, you can control the preheader text to control the preview content seen by readers.
  • Deliver relevant content. If your open rate is below average, you may be delivering the wrong content to the wrong people.

Click-Through-Rate (CTR)

The click-through rate measures how many opened emails received at least one click through to the target website. The average click-through rate is 2-3% (source: Campaign Monitor). This should be higher than the average website conversion rate as the emails are sent to people who have opted to see your content (e.g., past website customers).

CTR is a measure of how engaging your email content is. The email content, including images and calls to action, obviously plays a significant role in performance. If your open rate is reasonable, but your CTR is low, the content is underperforming.

Deliverability

Email deliverability refers to the proportion of emails that end up in the recipient’s inbox instead of bouncing or classified as spam. When mailbox providers receive an email, they will run reputation checks on the email to decide whether the message is SPAM. They base this decision on their analysis of the sending email address’ historical performance, the domain, and the email’s content. Factors considered will include:

  • The reputation of the server or IP address used to dispatch the email.
  • Domain reputation of links in the content
  • Email bounce rates
  • Spam complaint rates for sender, domain, and server

To keep deliverability high, it is essential to have a good sender reputation. This is achieved by keeping your list up to date. This involves:

  • Removing old emails. If an email has not interacted in a long time, consider removing it. Remove any emails which bounce.
  • Opted-in subscribers only. Only send emails to subscribers who have given specific contact permission.
  • Quality content. Avoid the use of spammy titles, e.g., GET RICH QUICK!!!!!!
  • Unsubscribe option. Always include a clear unsubscribe option.

Be careful as many email service providers consider a 0.1% complaint rate to be the maximum acceptable threshold.

Revenue

The goal of most email marketing is to drive sales. If email marketing is working well for your business, then a reasonable goal is 20% of your sales coming from this channel.

Benchmarking

Whilst the performance of email marketing is individual to each business, an eCommerce business whose email marketing is going well might look like this:

  • 20% open rate. This indicates that you are sending relevant emails to the right people with interesting subject lines.
  • 5% click-through rate. This suggests that the content and offers in your emails are compelling enough to click.
  • 20% of website revenue from email marketing. This says email marketing as a channel is converting first-time customers and upselling existing customers enough to warrant further investment.

Types of email marketing campaigns

There are three main types of eCommerce emails:  transactional, promotional and lifecycle emails.

  • Transactional emails. These are functional emails that send order information to individual customers as part of the purchasing process. Emails include order confirmation and reviews emails.
  • Promotional emails. Promotional emails advertise a specific deal or promotion. This can be across the whole product range of just a subset. For example, Black Friday or Cyber Monday email offers.
  • Lifecycle emails. Lifecycle emails are also known as automations or ‘triggered’ emails because they are sent based on the user’s action or where the user is in the customer life cycle. For example, an abandoned cart email is sent after a customer leaves products in their cart for a specific time without paying.

Transactional Emails

Transactional emails may be functional, but they have an extremely high open rate. The average unique open rate for transactional emails is over 47% which is more than double the 22% open rate for non-transactional emails (Source: IBM). Transactional emails also have a much higher click-through rate of 9% versus 3% for non-transactional emails.

Due to their high engagement rate, these emails are an excellent opportunity to promote your business. They should be well crafted and contain carefully targeted marketing messages. Options include:

  • Product upsell. Suggest accessories or add the option for subscription purchase.
  • Promotional codes. Offer a time-limited incentive for a second purchase. This is known as a bounce-back offer.
  • Get Social. Invite your customers to a Facebook group or ask them to follow your social media accounts.

Other ideas for improving your order processing emails include:

  • Order tracking. Include a direct link to the order progress, including any tracking details. This will reassure the customer and cut down on customer service queries.
  • Refer a friend. Encourage word-of-mouth marketing by implementing a referral program with rewards.
  • Relevant product suggestions. Suggest products that complement a customer’s purchase.

Note: In the EU, under GDPR, promotional messages are not permitted in transactional emails.

Zalando order confirmation email featuring order info, upsell and social links.

Merchant and Product Reviews

Customer feedback was pioneered by marketplaces such as eBay but is now available to stand-alone websites using services such as Reviews, Trustpilot and Feefo. Collecting feedback is an excellent way to reassure customers that you are a reputable business.

Feedback should only be requested once a customer has had time to receive and use the product they ordered. The services above are 3rd party apps that collect details of the user’s experience. This is a convenient solution for feedback collection. However, placing the review or survey on your site offer more opportunity for upselling to the customer.

If you are collecting feedback, it is vital to monitor it and deal with any unhappy customers.

Promotional emails

Promotional emails are sent to all or part of your email subscriber list or. Sending to part of your subscriber list is referred to as segmenting. Examples of promotional emails include a new product launch, email newsletters, time-limited offers or seasonal promotions. For maximum impact when sending a promotional email, you should carefully target the content to the subscriber segment to which you are sending. Types of promotional email include:

New Product Launches

Customers love newness! When launching a new product or range of products, you could send the details to a segment of customers who have purchased related products in the past.

Time-Sensitive Offers

Everyone loves a deal, so a successful strategy is sending time-limited offers to customers who have shown interest in these products in the past.

Exclusive Subscriber Discounts

If you send out a regular newsletter, give readers a reason to stay subscribed by offering exclusive discounts and offers. Email-only offers are a terrific way to keep subscribers interested and build loyalty.

Seasonal Promotions

A tried and tested form of email marketing is running exclusive offers based on upcoming events and holidays. Examples include a Black Friday sale, a January sale or fathers’ days.

Newsletter

A regular newsletter can educate your customers and reinforce your brand. Customer case studies and informative articles are a way of staying in contact with customers without relying on discounts or promotions.

Example Black Friday Deal Email from Amazon. Customer will know that Black Friday is on its way, and this email is an invitation to visit the store and get buying.

Lifecycle emails

Lifecycle emails target a small segment of your subscribers with relevant messages based on their behaviour. Their targeted nature means they can include a carefully tailored message to improve engagement.

Effective lifecycle emails include abandoned cart, welcome series, second order, and win-back emails. These emails can be configured in your email marketing software to be automatically sent based on triggering events. The sending sequence of these emails is referred to as a ‘flow’.

Abandoned Cart Emails

An abandoned cart is where a product is added to a cart, but the customer never completed the purchase. 60-80% of shopping carts are abandoned, which is a lot of lost sales.

Abandoned cart emails are automatic messages sent to these website visitors to remind them to complete the purchase. These emails typically recover between 5-11% of missed sales, which is a straightforward way to boost revenue. To improve conversion, many retailers include offers, though this can encourage shoppers to abandon their carts to get a discount.

A simple yet effective abandoned cart email.

Welcome Email Series

Welcome emails are a series of emails sent to customers after they subscribe to an email list. The purpose of these email is to welcome customers to the brand and build a long-term relationship (starting with a second purchase).

Welcome series emails have a high average open rate of 45%, so they are highly effective (Source: Omnisend). First purchase automation produces 3-6 times more sales than regular promotional emails. A three email welcome series might look something like this:

  1. 1st Email – Encourage purchase. Say hello and thank them for subscribing to the newsletter with a 10% discount voucher.
  2. 2nd Email – Build a relationship. Invite the subscribers to connect on social media where they can learn more about the brand.
  3. 3rd Email – Re-engage and drive traffic back to the store. Send reminder to customers who have not yet purchased that there is a discount waiting for them.

In this example, email soap maker Lush highlights their products with fantastic imagery and product showcase. Recommending products from the start drives traffic back to the site to get people shopping again.

Welcome emails should be sent shortly after sign-up (especially if you are offering a sign-up bonus) and include a clear call to action. The emails should provide value upfront (e.g., discount, promotions) as you only have a brief time to make a good impression.

Second-Order Campaign

Most customers will only buy one product and then go elsewhere unless you take active steps to get them back to your site. A second-order campaign aims to get single-order customers to return to the site by highlighting complementary products they might want to buy.

These emails increase customer lifetime value and reduce the number of customers going to a competitor for their add-on purchases. Ecommerce leader Amazon gets 35% of its business from email follow up emails (Source: McKinsey).

Win-Back Series

Win-back email campaigns encourage lapsed customers back to the site. For example, if you know that 90% of customers who make a second purchase do so within 45 days when 45 days have passed, you know it is unlikely you will ever see that customer again. After a customer has been inactive for 45 days, you could send out a targeted offer to the customer to entice them back.

Building an email marketing list

Customer Opt-in

You need permission to add emails to your list, not just from a marketing standpoint but also legally. Receiving unsolicited marketing emails (i.e., spam) is annoying for customers and, in many places, is against the law. To give consent to be contacted, subscribers need to ‘opt-in’ to receive marketing messages from you. Permission is usually obtained by ticking a box at checkout.

A business which neglects their legal obligations can get heavily fined. To avoid this fate, you should consult the relevant legislation:

  • CAN-SPAM. Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 governs email usage for commercial purposes in the USA.
  • GDPR. The General Data Protection Regulation is legislation aimed at protecting personal data within the European Union.
  • CASL. Canadian Anti-Spam Legislation set out the regulations for communicating with Canadian customers.

Opt-in forms

To get people to sign up for your newsletter, you need to ask. There are several places on your website where you can invite users to subscribe. As visitors to your website, they are likely to be interested in your products and within your target market. Requesting a subscription can have a reasonable response rate, especially if you provide an incentive to sign up like a first-time customer discount. The following are popular methods for implementing forms:

  • Tick box at checkout. Invite customers to sign up as part of the checkout process. Pre-ticking the box will increase sign up but is sneaky and against the law in many countries.
  • Sign up box. This can be in the header, navigation, or footer. Although the conversion rate is likely to be low, over time, the subscribers will add up.
  • Pop-up box. Pops-ups can be triggered after a specific time or by signs the customer is leaving. A signup incentive may encourage them to make a purchase.

Signup Incentives

Unfortunately, ‘please sign up to our newsletter’ is frequently not enough incentive for a customer to bother subscribing. Creating an offer can incentivise for visitors to share their email. Options include:

  • Deals and discounts. Discounts are a double-edged sword as they increase sales but hit margins. It is a judgment call whether it encourages customers who would otherwise purchase anyway.
  • Competition or contest. Although contests can generate many signups, many entrants will be just looking for free stuff (a ‘comper’).
  • Educational content. Many consumer products benefit from sharing additional content with customers. An example could a food manufacturer emailing tasty recipes which utilise their product and come back for more.

Real World Email Requests

Emails can be collected where you physically interact with your customers. Examples include:

  • Physical stores. If you have a shop, you can ask customers to sign up at checkout or give an incentive such as a competition to collect details.
  • Packaging inserts. These can include discounts or offers for customers who return to your site.

Choosing email marketing software

Unless you have a tiny email list, sending an email marketing campaign requires specialist email marketing software. You will also need a strategy for building your list in a way that does not alienate your customers and or falls foul of the law.

Choosing Email Marketing Software

Email marketing software is a dedicated software tool for managing email marketing campaigns. There are many on the market, such as Mailchimp and Klaviyo, and you can always change provider later. Functionality includes:

  • List building. Forms for collecting emails addresses.
  • List management. Managing lists, including unsubscribe requests.
  • Broadcasts. Email campaigns sent to all or a segment of your list.
  • Flows. Rule-based automatic emails.
  • Analytics. Reporting on your email campaign performance.

As an online retailer, you should use a system that specialises in eCommerce. Factors to consider include:

  • Cost. Email software is usually charged by the number of names in your list or the number of outgoing emails.
  • Usability. The system should enable you to create emails without the need for coding and highly configurable flows.
  • Integration. Choose a system that integrates with your current eCommerce system. This will enable you to push customer data directly into your email, allowing for a more personalised experience.

Why email marketing is important

Online, switching suppliers is only a Google search away. If you are not doing anything to encourage repeat business, then your customers will go elsewhere. Your return customer rate can be the difference between a failing and a thriving business, and recruiting new customers is expensive.

Staying in touch with past customers via email is a highly effective strategy for encouraging repeat purchases and building your brand. The emails can be used to send transactional, promotional informative and sales life cycle messages.

Why Email Marketing is Important

Unless you have a strategy for promoting repeat purchases, most new customers will buy once and never return. Building an email list and sending compelling email campaigns gives you a way to retain your hard-won customers by providing subscribers with a reason to stay in touch.

If your eCommerce business has not invested in email marketing, you are certainly losing sales by missing potential customers. Email marketing has the following advantages for eCommerce businesses:

Drives Repeat Business

Return customers are essential for eCommerce businesses because it keeps the cost of sale down. Search engines and social media are great for recruiting new customers. However, once a customer is acquired, email plays a pivotal role in encouraging the second purchase and beyond.

Effective Sales Channel

Research from the leading eCommerce platform Shopify shows that email traffic had the highest order conversion rate during peak periods. 80% of businesses rely on email as their primary channel for acquisition and retention (source Emarsys).

Improves Sales Performance

There are only three ways to improve revenue: increase the total number of customers, increase the total number of purchases per customer, or increase the average order value (AOV). Email can improve performance in all three areas:

  • Automated welcome and abandoned cart emails can boost conversion rates.
  • Win-back campaigns boost the number of purchases a customer makes.
  • Lifecycle campaigns and promotions can automatically highlight high-value products to targeted customers, increasing AOV.

As your email marketing campaign matures, your list will grow performance should improve. Therefore, it is never too soon to start email marketing.

Full Control

Platforms such as Amazon, Google and Facebook are growing in importance for online retailers. Whilst these platforms are a vitally important part of the marketing mix for any eCommerce business, they have several disadvantages:

  • Charges. To acquire customers through platforms requires payment, either on a commission (e.g., eBay or Amazon) or advertising charge (e.g., Google).
  • Do not own the customer. With marketplace platforms, you do not own the customer and cannot market directly to them.
  • Potential for exclusion. If you break the platforms rule for actual or perceived infringements, you can get barred either temporarily or permanently.

With email, you own the customers, and the cost of running an email campaign is low (price of email system and any promotions).