Email is one of the most powerful marketing tools out there. It generates an average return on investment (ROI) of $42 per dollar spent, making it more profitable than any other marketing channel.
Did you know that 60% of consumers report having made a purchase because of a marketing email? That’s nearly five times more than the number of people who say they’d use the “buy” button on social media.
There’s no doubt that your marketing emails have great potential, but how do you know if they’re reaching that potential?
Benchmark email marketing is the solution. It’s a way of measuring and analyzing the results of your email campaigns so you know:
- How you stack up against the competition
- How your email marketing performance changes over time
- How well your messaging and branding resonates with customers
At first, benchmark email marketing can seem like it’s just for SEO experts and the high-budget marketing departments of major corporations. Not so. With a marketer-friendly email service provider, you can track your campaign performance over time and start driving more traffic with your emails.
What makes a campaign successful?
A successful email campaign:
- Strengthens subscribers’ relationships with your brand
- Prompts subscribers to interact with the message, usually with a click
Benchmark email marketing lets you gauge your success in both categories. It allows you to compare your performance against others in your industry and against your own past performance.
It’s the best way to gauge whether you’re reaching audiences, short of contacting each subscriber directly and asking for their thoughts.
How to benchmark your email marketing
There are two phases to benchmark email marketing:
- Collecting and processing performance data
- Comparing that data to a standard or your own past performance
When you first start out, you’ll need to measure against others in your industry. After a few campaigns, your original data becomes your benchmark and you start to measure against that.
Tracking your campaign
Campaign tracking is the most important step in benchmark email marketing. It tells you things like:
- How many people opened your email
- What percentage of people clicked through
- Whether people unsubscribed from that email
- Whether people reported it as spam
This data tells you how effectively your email reached its target audience. For example, a high open rate says good things about your engagement factor and the quality of your subject lines. A high click-through rate says your copy is effective and you’ve chosen the right offers for that audience.
The only way to track your campaigns is with tracking software. Top email service providers will usually include it with your subscription.
Comparing yourself to others
Once you have your key data, you can compare it with email marketing benchmark data. Pay particular attention to average results in your industry. This will tell you how you’re doing against your competitors.
For example, the campaign above earned an open rate of 39% and a click rate of 13%. Those are great numbers in general. But they’re much further above average if the company is an automotive services provider (average open rate 10.25%) versus an animal services provider (average open rate 22.37%).
Comparing yourself to yourself
Once you have your first data set, you can compare each email campaign’s results with your own past performance.
By comparing your latest campaigns against previous campaigns, you’ll be able to see which metrics are improving, stagnating, or declining.
What are the most important metrics for an email marketing campaign?
The email marketing world has come up with dozens of metrics to gauge campaign performance. Some, like the geographical origin of clicks, are merely interesting, while others are vital to designing good campaigns.
Here’s a list of the stats that fall into the second category.
Bounce rate measures how many subscribers didn’t get your email. There are two kinds of bounces:
- Soft bounces: Temporary issues like a full mailbox, disabled server, or outsized attachment
- Hard bounces: Permanent errors, such as invalid or nonexistent email addresses
A high bounce rate might mean that your subscriber list needs some cleaning up.
If that doesn’t solve the bounce problem, don’t worry! Here are recommendations for multiple types of bounces.
This email marketing benchmark tells you how many people opened your email long enough to read it. An email counts as open when someone has viewed it and kept it open at least until the images have loaded.
The formula for calculating your open rate manually is:
Number of unique opens / (Emails sent – emails bounced)
Say you send a marketing email to 200 subscribers. If 60 people open the email and you get 5 bounces, your open rate is 60/(200-5), or just under 31%.
Notice that you calculate the open rate using something called “unique opens.” That means the number of people who have opened your email, not how many times the email was opened. If one person opens your email 50 times, that still only counts as one unique open.
Unique opens are important in benchmark email marketing because they tell you how many people engage with your content.
It’s great when subscribers read your marketing emails, but in the end, it’s not enough. You ultimately want them to take action. That’s what click-through rate measures.
Click-through rate (CTR) tells you which links people clicked and how often.
The higher your click-through rate, the more effectively your email content engages customers. That includes the body of your email as well as your calls to action.
If one link is getting tons of clicks and another gets hardly any, you might want to streamline and have fewer possible actions in your message.
Click-to-open rate (CTOR) is an underused metric in benchmark email marketing. It gives you the number of clicks as a percentage of unique opens. For example, if 300 people opened your email and 75 of them clicked, the CTOR for that campaign is 25%.
CTOR is different and often more reliable than click-through rate, which measures clicks as a percentage of your entire email rate. If the campaign above went to a total of 500 people, your click-through rate would be just 15%.
CTOR shows you what percent of your audience took action. That’s the overall success of your campaign. CTOR gets more specific about the effectiveness of your message. A higher CTOR means more readers felt inspired to take the next step.
Every email you send has or should have a desired action. This is what you want subscribers to do after they read your email, such as make a purchase or sign up for an event.
Conversion rate tells you how many of your email recipients took that desired action. It goes a step further than the click-through rate, which only tells you whether someone clicked on a link.
Say you want your subscribers to take advantage of a promotional offer. If you measure CTOR, you can find out how many people clicked on “Shop Now” or “Use Offer.” Conversion rate goes a step further and tells you how many people made a purchase using the offer.
Marketers usually express conversion rate as a percentage of emails delivered. These numbers can help you calculate return on investment for a specific campaign.
Federal law requires you to include an unsubscribe link in every email you send. Both the CAN-SPAM Act in the U.S. and Canada’s Anti-Spam Law (CASL) state that this link needs to be clearly presented and easy for people to find, so they can opt-out of messaging if they wish.
Your unsubscribe rate represents the number of people who took that option. If you have an audience of 500 and your unsubscribe rate is 1%, then five people chose not to receive emails from you after reading your last message.
Unsubscribes can be disappointing, but they actually have a positive effect on your benchmark email marketing. Someone who unsubscribes usually hasn’t been opening and clicking on your emails a lot. They’re bringing down your key metrics, so it’s better to let them go.
Still, it’s a good idea to keep an eye on your unsubscribe rate. If it’s slowly going up, your email marketing strategy probably needs an overhaul.
If it spikes, you may have put your foot in your mouth. It happens — but you’ll need to do damage control.
List growth rate
Let’s talk about something happier. List growth rate tells you how fast your subscriber list is growing, and it’s more than just a vanity metric.
You can manually calculate your list growth rate by subtracting your number of unsubscribes from your number of new subscribers, then dividing the result by your subscriber total.
Pay special attention to how many contacts you added manually and how many added themselves, organically. Organic additions usually come from sign-up forms, social media, and other list-building tools.
These aren’t the only metrics you can use for benchmark email marketing, but they’re the most important.
What to do with your email marketing results
Whether your stats are going up or down, what you do next is the most important thing.
1. Work on deliverability
When an email goes to someone’s spam folder, it’s much less likely to get opens or clicks. You can keep your emails out of spam folders by:
- Getting explicit permission before adding someone to your list
- Avoiding spam triggers (Check out this helpful list of spam red flags)
- Emailing only when you have something important to say
- Taking unsubscribe requests seriously
Using a reputable email service provider also helps by having all the right authentication factors in place, so you can focus on writing great messages.
2. Send to the right audience
People open and click on emails that they find relevant. Instead of sending the same message to your entire contact list, use an audience segmentation tool to group your recipients.
Audience segmentation lets you send different messages to different people based on their interests. You can segment based on almost any relevant factor including:
- Family status
- Geographical location
- Previous purchases
Segmenting lets you better personalize your campaigns.
3. Craft a great subject line
You only get one chance to make a first impression. Writing a great subject line can improve all of your stats, from open rates all the way to conversion. They might even help you grow your list if they’re exciting enough that someone opens the email and forwards it to a friend.
The best subject lines are concise, descriptive, and personal. Try adding the recipient’s name for that extra touch.
4. Hypothesize and test
Once you’re far enough along in benchmark email marketing that you can track your results over time, look for the variables. Did your click-through rate soar after your latest campaign? Look at what might be different compared to the last campaign.
If you’re not sure, run a test. Take your next email and make one simple change, ideally what you think made the difference last time.
For example, if you think your new embedded video enticed people to take advantage of your offer, create one email with a video and one without. Send the two versions to similar groups of contacts and compare the results.
This is called A/B testing, and it’s the best way to find out what really gets results.
Getting started with benchmark email marketing
Now that you know what benchmark email marketing is and what you want to measure, you’re ready to take your first steps.