Optimizing Email Performance Using New KPIs

Posted by Sebastian Kluth on

Email marketing is the most effective online marketing channel that consistently delivers the highest ROI (Return on Investment) of all digital channels. I therefore see email marketing as performance marketing, though some of my industry peers may disagree.

Email marketing is performance marketing

Let’s take a look at the reasons why I consider email marketing to be performance marketing:

  • In email marketing, KPIs (Key Performance Indicators) are used as a basis for measuring success
  • Email marketing campaigns can be benchmarked, just like other online marketing channels
  • The primary goal of email marketing is to generate sales and profits
  • To a large extent, email campaigns are used to drive sales
  • By measuring email marketing performance ROI can be established

Clearly performance measurement and KPIs stand out here as the most important keywords. And as email marketing evolved, new KPIs have arisen to make it easier to assess the success of an email campaign.

Currently, performance measurement is mainly carried out using traditional KPIs such as open rate, click-through rate, and conversion rate. These are clearly important metrics, and will remain so moving forward. However, as the focus shifts to assessing engagement along the customer life cycle, the KPIs need to evolve as well in order for e-marketers to accurately evaluate email success.

The “black hole” in email marketing

First of all, the measurement of email performance should not only start at the moment it is opened. In my opinion, there is still too big a gap between the number of emails sent as part of a campaign and those opened. To understand the email subscribers in the customer life cycle, it’s necessary to analyze how a subscriber truly engages with an email.

Between “delivered” and “open”, there are a number of other actions that are worth noting – and measuring. Between transmission via the email delivery system and the email being read by the recipient, the ISP (Internet Service Provider) has significant influence on the email. If opens are measured, then the email:

  • Has already made its way into the inbox
  • Has not been deleted unread
  • Has not been marked as spam
  • Has not been ignored i.e. has not simply been left unread
  • Has not been moved to another folder, lying there unread
  • Has not got lost on the way to the inbox

New KPIs for greater relevance

At Return Path, we use additional KPIs to fill the void between “delivered” and “open” with insights and data:

  • Inbox Placement Rate (IPR)
  • Spam rate
  • Read rate
  • Deleted without reading
  • ISP-marked spam
  • User-marked spam
  • TINS (“this is not spam”) – categorized by the user as “not spam”
  • Forwarded

For more information on the email intelligence that I am referring to here, I’d recommend the following page http://www.returnpath.com/solution-content/inbox-insight/

At the heart of these new KPIs is relevance. What is interesting and/or relevant for the recipient? Has the ISP evaluated the email as being relevant? Does the email meet the standards for certification and whitelisting? These KPIs provide the necessary insight into the “black hole” before the mail is opened.

How do I increase the open rate of my email campaigns?

When analyzing email campaigns, opens and clicks are the metrics that most marketers focus on. But looking at things another way, analyzing why an email was opened or clicked through as a way of improving performance is flawed logic. What everyone should be asking themselves is: “Why are my emails not opened?”

This question can only be answered properly by leveraging the KPIs listed above. Everybody agrees that when users mark a newsletter as spam that they subscribed to just weeks or months before, this is a significant data point. Likewise knowing how many emails are left unread in the mailbox, or emails that were deleted without reading are metrics that need to be measured and analyzed in order maximize open rates and campaign performance.

One example

Clearly, the end goal of any email marketer is to improve engagement with recipients who have previously ignored their messages, deleted them or marked them as spam – in order to increase open rates. To do this, marketers need to understand which factors drive engagement with emails.

The subject line is crucial as an influencer of open rate.

Let’s assume that an email has passed through all the filtering mechanisms and is now waiting to be read in the inbox.The aim is to determine what to focus on in writing an effective subject line, in order to minimize deletions and spam complaints and increase the open rate.In order to learn more, I analyzed 120 subject lines from Germany’s largest mail order company, together with the KPIs.

Number of characters in subject lines

Does the number of characters in a subject line have an influence on email deletion?

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The average length of the 120 subject lines was 49 characters; the maximum length 98 characters, and the minimum length 17. In this analysis, it’s clear that as the length of the subject line increases, so does the number of emails that are deleted without reading. One reason is likely to be that the subject lines are truncated by the ISP if they exceed a certain number of characters.

The difference between short subject lines (approx. 4% of these get deleted unread) and long ones (deleted unread rate jumps to 11%) is about seven percentage points. This means that for a campaign which is sent to 1 million recipients, a total of 70,000 potential recipients will not open the email due to a longer subject line. Without opening the email they won’t enter into the sales funnel and assuming average conversion and average deal sizes, potential sales of $450,000 (and more) may be lost.

Tip: Keep it short and get to the point in a few words.

Impact of day of week

Are there particular days of the week when email campaigns are more likely to be deleted unread?

dwor2

Based on the evaluation, the above diagram sets out Wednesdays and Fridays as the days on which most emails are deleted unread. Mondays and Sundays are two other days when the largest numbers of emails are deleted without being read.

One possible conclusion might be that users only check their inbox every other day in order to view the emails received.

Another conclusion may be that senders dispatch their email campaigns at the same time on these days so that the recipients’ inboxes are even more crowded.

The good thing on knowing the Deleted Without Reading % is that you know these users still use their inbox. They are checking their emails, but your content seems to be irrelevant to them. This is your chance for improvement and testing.

Inactivity and reputation

The number of emails which are left unread or are deleted unread is a highly important indicator of the addressees’ activity (or inactivity if only looking at open rate as indicator), and has a significant impact on the sender’s reputation at the mailbox provider.

Emails that have not been read and which are then deleted can no longer be opened. The ISP remembers this behavior based on the address and the IP from which the mail has been sent, records the negative reaction, and concludes that the incoming email is of no relevance to the recipient. If such action becomes more frequent among the recipients, this will negatively affect the reputation of the sender and increase the risk that all future emails will be classified as spam, and will no longer get as far as the inbox.

Outlook

In this first blog, my aim has been to share a little insight into the evaluation of email programs using new KPIs.

If you like to get to know more about the KPIs I mentioned during my blog post, please see the blog post of my colleague Gabriel Gastaud: http://blog.returnpath.com/blog/gabriel-gastaud/the-email-marketing-metrics-for-decision-making.

Over the coming months, I will be writing blog posts on a range of topics relating to email marketing trends and insights from my work as a Return Path email consultant in Germany, and I welcome any comments or questions that you may have.


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About Sebastian Kluth

Sebastian Kluth is an Email Strategist at Return Path. He has been with Return Path since July 2014. He uses email intelligence data to provide customized solutions for deliverability and email optimization. He built his experience as a Senior Key Account Manager and Project Manager working for major German brands, agencies, and an email service provider and was responsible for implementing e-mail marketing campaigns as well as consulting and project management. Connect with him on LinkedIn.

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