Businesses of all types and sizes have embraced email marketing as a core marketing strategy. Email is incredibly effective, beating social media in customer acquisition and other metrics. This gives businesses a lot of good reasons to use it.
However, not every business experiences all the benefits of email marketing. This is especially concerning considering that the success of your email marketing campaigns can significantly affect your marketing’s effectiveness. The best way to know if your email marketing efforts are paying off is to keep an eye on important metrics. This starts with knowing how to benchmark your email marketing efforts.
What are Email Benchmarks?
Benchmarks are an important part of seeing how well your email marketing efforts are doing. They provide you with valuable data, information, and metrics. Marketers typically consider email benchmarks critical performance indicators that can help enhance marketing performance and results.
Benchmarks tell you how you are doing against your competitors and your industry as a whole. Studying your industry’s benchmarks can also provide insights into which areas to focus on.
But how can you create benchmarks that can help you with all this?
Determine Your Key Metrics Before You Benchmark Email
You need to work backwards to understand which email metrics are important for your business. You start by looking at your business goals, the objectives that help you meet these goals, the strategies that help you reach your objectives and then the metrics you need to measure.
For a retailer, that might look like this:
- The goal – Sell more men’s attire
- Objective – Increase traffic to an online retail store or e-commerce platform
- Strategy – Send promotional emails to customers that link to the website
- Metric – Email click-through rate
For such a business, knowing how many people are clicking on the email and the CTA can help it optimise to support and improve the other parts of this strategy.
Determine which metrics are essential for your business based on your goals. Some goals might include new email subscriptions, donations for a course or event registrations.
Set Specific Email Benchmarks
Once you have determined the most critical and impactful metrics for your business and its goals, you need to set the values you work towards. If you have a new mailing list or do not have past campaigns to compare against, it is essential to look at your competitors and the wider industry.
Even though industry averages will give you something to work towards, it is also important to keep an eye on trends and results that you get from your past campaigns if you have run one in the past.
For the retailer we discussed above, the click-through rate might be only 15%, but they know it should be higher. They can find new ways to improve click-through rates, such as by leaving out the price of the clothes they market and adding a picture, description, and some customer testimonials. These might be enough to get people curious enough to click through and see how they can get that attire.
Use Past Data to Benchmark Email
If you have run campaigns in the past, you should have data that you can use as a starting point. Try as much as you can to continuously improve the metrics you deem important from doing the exercises discussed above.
You can take emails that have performed well in the past based on your important metrics and dissect them to see why they worked so well. Once you identify what made them work so well, you can try to replicate that in your new campaigns.
Understanding and Beating Email Benchmarks
Before you can beat industry-wide benchmarks, you must understand which benchmarks and metrics to focus on. We discuss different types of metrics below.
Email Open Rate
This is the percentage of people who open your email after receiving it. While it varies across industries, the benchmark for email open rates is 30%. One thing to understand is that this metric does not tell you what happened after the recipients opened your email. Because of this, you should consider the email open rate in conjunction with other metrics to know how well your email marketing is doing.
The email open rate only accounts for emails that were received. This means you need to subtract the number of bounced emails from the number of sent emails to get the number of received emails. You can then use the latter number to calculate the open rate.
The email open rate metric is always changing, and you should too. As your email list grows, your email open rate will fall. This is because the percentage of people not interested in some of the emails you send will increase. The best way to deal with this is through segmentation.
Segmenting your email list and sending the most relevant and helpful emails to different customer segments (groups) will yield the best results.
You might also consider how your subject lines come across various segments. One segment might appreciate quirky or humorous subject lines, but another might only want serious subject lines that use business jargon or language.
Email Click-Through Rate
The click-through rate is the number of people who clicked on your call to action after opening the email. The average click-through rate is about 2%, but this varies by industry and reason for sending the email. For example, the click-through rate for e-commerce abandoned cart emails is about 10%.
The click-through rate will always be lower than the open rate because only a fraction of recipients open your emails, and only a fraction of those people will click on your call to action.
Your click-through rate can be used as an indicator of how efficient your email is. This encompasses your messaging, offer, email copy, call to action and design. Improving all of this will help you improve your click-through rate.
To understand what is working, what to change and what is working after changing it, you should do A/B testing. Set up different A/B tests with each variable and combination of variables changes to see what would work best.
Click-to-open Rate Benchmarks
You should complement your open rate and click-through rate benchmarking with click-to-open benchmarking. The click-to-open benchmark is the percentage of people who opened your email (not the full number of recipients) and who clicked your call to action. The average click-to-open rate you should target is 10.5%, but this number also varies by industry.
Because this metric is of the people who opened the email, it can be a more significant indication of your email’s effectiveness than the click-through rate. Click-to-open rate is such a strong metric because it measures conversions, actions and opens at the same time. To calculate this metric, take the number of recipients who clicked on a link or call to action, divide that number by the number of recipients who opened your email and multiply that by 100.
Because the aim is to increase call-to-action clicks, you should optimise both your copy and call-to-action. As with the click-through rate, you can do A/B testing to see which combination of design, copy, and call to action works best with your audience.
Benchmark Mail Bounce Rates
Email bounces refer to the percentage of emails sent that did not end up in a subscriber’s or email address inbox. You should try to keep your bounce rate lower than 2%. There are several reasons why emails bounce. Hard bounces happen when the recipient blocks you, marks you as spam, or an email address no longer exists, A soft bounce occurs when a recipient sets their address not to receive an email, their inbox is full, or the address or person is temporarily unavailable.
The best way to know your bounce rate is to rely on your email service or automation service provider. They will typically give you this number so that you know how you are doing and whether different interventions are required.
There is nothing you can do about soft bounces, but there are various strategies for keeping your hard bounces as low as possible. First, set your email marketing platform to remove all addresses that cause a hard bounce from your mailing list. This way, you do not keep sending emails to addresses that cause a bounce.
Second, leverage double opt-in features. Double opt-in is better than single opt-in because people who do the former are more likely to remember your business and are completely sure about receiving your emails.
Conversion Rate Benchmarking
A conversion means something different for different businesses. Most people think of it as clicking on your call to action, but you can have other conversion metrics, such as how many people reply to your email after asking. While there is no global conversion rate because of the numerous types of emails a business can send, you can use your past data to know if you are converting below, at or above your usual rate.
Email benchmarking is an essential part of improving your email marketing efforts. Once you understand what metrics are necessary for your business and how to benchmark and improve them, you should see better performance and results from your email