Which e-mail metrics are you overlooking?
Overlooked e-mail metrics
This article shows you how to interpret and optimize the conversion rate of your various e-mail list segments to drive meaningful revenue improvement.Sustainable e-mail marketing doesn't burn out your list by over mailing, or addict your subscribers to unprofitable discounts. Instead, it balances revenue generation with reasonable email frequency and quality offers for your subscribers.
For this article, e-mail conversion rate (or conversion rate) is defined as the percentage of website visitors who make a purchase after opening or clicking an e-mail. As we'll see, e-mail conversion rate is a direct measurement of the overall health and revenue potential of your list.
Typically, you'll measure conversion rates with your web analytics tools. See Part 1: Effective Post-Click Measurement for more about integrating your e-mail marketing with your web analytics.
Conversion rate vs. e-mail interaction metrics
High open and click rates are good, but they don't necessarily mean you are driving revenue or long-term engagement with your e-mail. Conversion rates give you direct measurement of the end goal of your e-mail marketing.
Conversion rate vs. gross revenue
You don't have to generate revenue from each subscriber right away – just sooner or later. Conversion rates are more important than gross revenue in the long term, because a subscriber who converts once is far more likely to convert again than a subscriber who's never converted at all.
A consistently high conversion rate indicates a steady stream of purchase behavior that will generate consistent revenue over time.
Conversion rate of unengaged subscribers
Mailings to an unengaged customer segment display a lower than usual click rate, but a higher than normal conversion rate that is often two to three times your engaged subscribers. Unengaged subscribers habitually ignore your mailings, but a small percentage will notice a win-back offer. Given the discounts associated with win-back offers you might not make much profit from this first conversion, but once you've moved a subscriber from unengaged to engaged, you have the opportunity to greatly increase their lifetime value.
If your win-back offer is successful then when an unengaged subscriber clicks through to the site they tend to have a short path to purchase and a high conversion rate – they are “on a mission” to take advantage of the offer. A less successful win-back offer will have a lower conversion rate that is more in line with your typical subscribers, because the subscriber is clicking to browse rather than take advantage of the offer.
Watch conversion rate for the long-term health of your e-mail program
To avoid burning out your e-mail list, move your thinking from generating maximum revenue on every mailing to long term, which works to generate steady conversions from a mix of offers with different profit margins.
For the upcoming third article in this series, we'll talk about the conversions that could have been but weren't – aka cart abandonment rate.