Email Marketing KPIs Every E-commerce Seller Should Track

As businesses compete in today's fast-paced digital market, email marketing has become an essential tool for establishing customer relationships, brand loyalty, and, ultimately, increasing revenue. However, with the continuous growth of the email marketing industry, measuring the effectiveness of email campaigns has become increasingly vital. We also provide you with a complete guide to email marketing for your business.

According to Statista's recent forecast, the number of email users worldwide is expected to reach 4.3 billion in 2022 and is set to increase to 4.6 billion in 2025. This means that email users will make up more than 50% of the anticipated world population. Given this statistic, it is evident that brands should take advantage of email marketing as an effective opportunity.

To help you stay on top of your metrics and to maximize your campaigns' success rate and ROI, in this article, we will give you insight into the most important key performance indicators (KPIs) that every e-commerce business should track when it comes to managing their email marketing efforts.

Email Marketing

But before diving into the KPIs, let’s review some email marketing fundamentals. First, we’ll give a quick overview of what email marketing is and what it entails.

Email marketing is a cost-effective and efficient way for businesses to connect with their customers and build lasting relationships. This is done through the use of campaigns that send personalized emails with updates, promotions, product releases and more.

With email marketing, any e-commerce business can target specific groups of people based on their interests, preferences, or purchasing history, thereby increasing the chances of converting leads into sales.

A few of the many benefits of email marketing include:

1. 1. It is one of the most inexpensive forms of marketing available, making it especially attractive for small and medium-sized businesses with limited resources.

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2. 2. It allows businesses to personalize their messaging, tailoring the content to specific audiences. This can help improve the customer experience and increase engagement.

• 3. It is trackable, meaning businesses can measure and analyze how well their campaigns are performing. By tracking open rates, click-through rates, and other key metrics, businesses can refine their strategies and improve outcomes.

Customer Lifetime Value (CLV)

Customer Lifetime Value (CLV)  refers to the estimated total value a customer will bring to a business over the course of their relationship. This value is determined by a variety of factors such as purchase history, engagement with marketing content, and overall loyalty to the brand. The goal of any e-commerce business should be to maximize CLV, meaning that customers should remain loyal and continue making purchases over time.

By tracking CLV, businesses can better understand which of their strategies are generating sales and retaining customers in the long run. As a result, they can make adjustments or refine future campaigns accordingly.

Hence, the role of KPIs is to help you better understand your customers, track their behavior and preferences, and convert existing customers and new subscribers into loyal, long-term paying customers.

What are Key Performance Indicators?

Key Performance Indicators (KPIs) are important metrics used to measure specific aspects of an email campaign's success. They provide marketers with valuable insights into campaign performance, enabling them to optimize their email marketing efforts, tweak messaging, and increase ROI.

Here are the most important KPIs every e-commerce seller should track:

Open rate

Open rate is the percentage of recipients who have opened your email out of the total number of recipients who have received it.

A high open rate signifies that your emails have captured the attention of recipients and that they are interested in your brand, products, or services. On the other hand, a low open rate means that your email content is not resonating with your audience, and you need to work on optimizing your campaigns.

As a KPI, it indicates the campaign's effectiveness since an opened email shows that the recipient received it and was intrigued by the subject line or content.

Click-through rate

Click-through Rate (CTR) is a marketing metric that measures the number of clicks an email campaign receives divided by the number of emails sent. It represents the percentage of subscribers who clicked through to your website, social media, or other digital channels via the links you included in the email. The average click through rate when it comes to an email marketing campaign is typically between 2%-5% on average.

CTR is a great indicator of the effectiveness of the email campaign in terms of driving traffic to your website and converting leads into customers. That said, a high CTR indicates that your email content, design, and call-to-action (CTA) resonates with your subscribers and motivates them to take action, usually by clicking a link that redirects to your website or landing page.

As a KPI, the CTR shows how effective your email marketing strategy is in driving traffic to your online store and achieving the desired conversion goals.

Bounce Rate

The bounce rate is a metric that indicates the percentage of emails that could not be delivered to the recipient's inbox. This can happen due to a variety of reasons, such as an invalid email address, full inbox, or technical issues with the email server.

It is important to track the bounce rate as a KPI because it provides insights into the health of your email list and the effectiveness of your email campaigns. A high bounce rate can negatively impact your email deliverability, which can in turn result in lower engagement rates and lower sales conversions.

There are two types of bounces: soft bounces and hard bounces.

In such cases, the email is queued for delivery at a later time. Soft bounces are not considered harmful as they do not affect your email deliverability rates.

• 2. A hard bounce, on the other hand, is more serious. It occurs when an email cannot be delivered permanently. This may happen when the email address is invalid, the email server has blocked your email address, or the domain doesn't exist.

Hard bounces are harmful because it can negatively impact your email deliverability rates and can result in your emails being marked as spam.

To keep your bounce rate low, it is important to maintain a clean and updated email list. This can be done by regularly removing invalid email addresses and keeping track of email address changes. Another way to reduce your bounce rate is by using double opt-in procedures, where subscribers confirm their email addresses before joining your email list. This way, only those who are interested in your emails can join, resulting in a lower bounce rate.

Conversion rate

Conversion rate is regarded as one of the most essential KPIs. It measures the percentage of recipients who have taken a desired action, such as making a purchase or signing up for your newsletter.

A high conversion rate indicates that you have succeeded in creating engaging content, effective targeting, and nurturing leads through the sales funnel. It signifies a strong focus on implementing strategies that generate sales and a solid ROI.

As a KPI, low conversion rates indicate several factors such as poor email deliverability, low email open rates, or poor user experience on your website. The conversion rate metric can help you to identify which areas need improvement and pinpoint the strategies that bring maximum ROI.

Spam rate

One of the biggest challenges in email marketing is being labeled as “spam”. Spamming not only affects a business's brand image but can also negatively impact its email deliverability rate. This means that emails sent from your business may not get delivered to the recipient's inbox, resulting in low open and click-through rates.

The spam rate is defined as the percentage of emails that are marked as spam by email clients or Email Service Providers (ESP). There are common reasons why emails are marked as spam:

• 1. High frequency of sending emails
• 2. Poor email content quality
• 3. Inappropriate language
• 4. Using misleading subject lines and sender names

A high spam rate suggests that you need to adjust your email campaigns. Start by reviewing your content and subject lines, as well as make sure that all emails are sent at an appropriate frequency. Also ensure that you provide subscribers with an easy way to unsubscribe if they no longer want to receive emails from you.

Unsubscribe rate

The unsubscribe rate refers to the number of subscribers who have chosen to opt out of receiving emails from a particular business.

A high unsubscribe rate indicates that a business is failing to engage with its audience effectively. It highlights that the email content is not relevant, engaging, or valuable to the subscribers. As a result, they choose to stop receiving emails from your business.

On the other hand, a low unsubscribe rate is a positive indicator that a business has a healthy email list. It suggests that subscribers are interested in your content and engaged with your emails.

The unsubscribe rate can be used to measure the overall performance of an email campaign. It is important to track this KPI and take necessary steps to reduce the rate by providing relevant content and improving email deliverability.

Email Marketing Metrics Made Easy for Any E-commerce Business

Email marketing metrics are essential for any e-commerce business. These KPIs measure the performance of your email campaigns and help you identify where you need to improve to increase engagement and ROI.

The ability to track these key metrics is essential to optimizing email marketing campaigns and increasing ROI. With email marketing remaining a critical channel for businesses in today’s digital age, e-commerce metrics offer a sound basis for decision-making and investment in email channels.

Overall, e-commerce metrics offer a crucial foundation for any business looking to stay competitive in the email marketing arena. By monitoring metrics regularly, businesses can make informed decisions, optimize their email campaigns, and boost revenue-generating opportunities.