Measuring Performance

One of the biggest advantages to using a marketing automation solution to manage your emails is the ability to track and evaluate the results. Measuring metrics such as open rates, click rates, and bounce rates can help you measure the effectiveness of your emails, marketing lists, and calls-to-action.

To consider an email marketing campaign successful, most organizations strive to achieve:

High deliverability High open and click-through rates Low unsubscribe rates High conversion rates (clicks that lead to a purchasing action) High return on investment (revenue generated by the email)

Deliverability Metrics

Deliveries

A “delivery” is counted when ClickDimensions gets an acknowledgement from an ISP or mail server that it has accepted an email message that was sent to one of its customers.

However, even if there were 100 deliveries for an email, this does not necessarily mean that the email made it into 100 inboxes. After the ISP acknowledged receiving the email, there are still a number of reasons why an email might not make it into someone’s inbox such as spam filters, a mailbox that is over its size quota, mail server rules, and even in some cases an invalid email address – though in most cases the ISP would have returned an invalid recipient message instead of an acknowledgement of receipt.

Note: While these metrics are fairly standard, the methods described in this chapter are how the ClickDimensions solution measures and reports email statistics. Data sets may differ slightly if you are using a different email provider.

Excluded emails occur when ClickDimensions does not try to send an email to a person for one of the following reasons:

Blocked

The recipient’s email address hard bounced on an email you previously sent to this person, the email address had too many soft bounces from emails you previously sent to this recipient, or the person marked your email as spam and has a spam complaint.

Missing Email

The recipient does not have an email address in the email field.

Unsubscribed

The recipient previously unsubscribed from all of your emails, or from the subscription list associated with the marketing list you sent to.

Bounces

In email marketing, “bounce” is the term given to any email that returned an error stating that the email did not make it to the recipient. The terms hard and soft bounce are commonly used and it is generally accepted that a hard bounce is a permanent failure whereas a soft bounce is a failure that could be temporary. Thus, it makes sense to immediately remove all hard bounce email addresses from your mailing lists and monitor the soft bounce addresses and remove them if the soft bounces continue. ClickDimensions does this automatically through a feature we call Service Protection. This feature ensures that our customers receive high deliverability.

Examples of Hard and Soft Bounces

HARD BOUNCES include:

DNS failure

The email address is invalid

No recipient could be determined

SOFT BOUNCES include:

The recipient’s mailbox is full

The message is too large for the recipient

The message was blocked by the recipient (spam, prohibited content, attachments, etc.)

Opens

How do you know when someone opens an email?

When you compose an email and send it through ClickDimensions, our system inserts a tiny, transparent, 1x1 pixel GIF image into the email. This GIF is hosted on our system. When we insert the GIF into an email, we also insert a unique identifier at the end of its address. That unique identifier corresponds to the recipient to whom you’ve sent the email.

So, for example, if the GIF is hosted at http://files.mycompany.com/ tracking.gif, we’ll add a unique ID for each and every email recipient to the end of the address in the email’s HTML. Now the URL for the tracking GIF might look like this: http://files.mycompany.com/ tracking.gif?_id=1234567890. (This is simplifying things a bit, but you get the idea!)

Now, when the recipient views the email you’ve sent, our web server sees the request for that transparent GIF and the attached ID, and now it knows who viewed the email. When ClickDimensions sees that Joe opened an email, we record an “open” email event in your CRM. Now you can see that Joe opened the email you sent.

Tracking GIFs are a proven and widespread method for tracking whether someone opened an email. They are used by nearly every email provider. Occasionally, however, the tracking GIF is not 100% reliable due to several reasons:

Many email applications block the display of images by default

This is true of desktop email applications like Outlook, as well as webmail providers like Gmail and Hotmail. If images are blocked, a recipient can actually open and read your email without it being possible to count the “open” event. The recipient would need to click Outlook’s informational message to download all the pictures for the email, including your tracking GIF. In some email

Open Rates Defined

% Open Rate:

The percentage of the number of messages sent where the email was opened at least once.

Sent emails where opens > 0 / messages sent

Unique Opens:

The number of people who have opened the email at least once.

Sent emails where opens > 0

Total Opens:

The total number of times every recipient opened the email combined.

applications, if the user adds the sender to the “Safe Sender” list or whitelist, then images will always be displayed automatically in emails from that sender.

An email can be forwarded

So what would happen if a person received an email, didn’t tell Outlook to download all the pictures, and forwarded it to their sister whose email client shows all images automatically? Well, in that case, the pictures would be displayed in her email client and the tracking GIF would be downloaded. But the unique ID that was appended to the tracking image is still correlated to the original recipient. So ClickDimensions would think that the original recipient opened that email.

Some people don’t clean out their inboxes

There are some people (we won’t name names!) who don’t have great inbox management habits. You send them an email and it stays in their inbox for months, or even years. Each time they happen to scroll past it and the email is displayed in the preview pane, the tracking GIF is loaded, and an open event is counted.

The potential for missing real opens, or counting opens that shouldn’t count, is why ClickDimensions also tracks “unique” opens – how many people opened your email as opposed to how many times your email was opened.

Since we know that the open rate may not be 100% accurate – it’s likely quite a bit higher– then what good is it? Well, the trend is your friend! Looking at your unique open rates over time can give you an idea if you are getting better or worse at reaching your audience with relevant messaging.

Clicks

A “click” is recorded when a recipient clicks on a link in an email sent through a marketing automation solution like ClickDimensions. The click rate (also called “click-through rate” or “CTR”) tells you how many people are engaging with your email’s content. More than deliveries and opens, clicks can tell a marketer how well his or her message is resonating with the audience.

Total Clicks

The total number of times every recipient clicked a link in the email combined. If a recipient clicks the same link 14 times, 14 clicks are counted.

Unique Clicks

The number of times a recipient clicked for the first time on a link in the email. For example, if you clicked on three different links in an email you would generate three unique clicks. However, if you clicked on one link three times, that would only be one unique click.

Click Rate

The click rate is the percentage of people who clicked on at least one link in the email. This is calculated by dividing the total number of sent emails that had at least one click by the number of messages sent.

How are clicks recorded?

When you send an email through ClickDimensions, our service looks through the email’s HTML and converts any links it finds into trackable links. For example, if a template has a link to http://www. clickdimensions.com, when the email is sent through our system, we convert it to a longer link with tracking data included. Now, when the recipient clicks the link, their browser will actually first go to an email like http://elink.clickdimensions.com/c/1/?aid=2385960 &requestid=5038869 before being rapidly redirected to the website the marketer put in the email.

In the trackable link, there is a contact ID that lets us tie the click back to the contact in CRM so we know who clicked the link. You can even track clicks to websites that are not under your control. If the website doesn’t have the ClickDimensions tracking script on it, you can still see the “click” and who did it because of the information passed in the trackable link. You can set up ClickDimensions so that the trackable links are branded with your domain. Instead of starting with http://elink. clickdimensions.com, you can have them start with http://link.mycompany.com or something similar. To do this, you’ll need to make some changes on your domain’s DNS as explained in our CNAME setup guide.

Monitoring open rates and click rates will help you analyze what is and is not working in your email campaigns. Higher click rates typically lead to higher conversions, which leads to higher sales. However, ultimately, marketers want to know that the money they spend on email marketing will generate a high return on their investment.

Determining return on investment (ROI) on email marketing is the same as determining any ROI:

Earnings (typically revenues or profits) – Spend / Spend

If you have a very direct sales and marketing process, it may be easy to calculate ROI. Add up what you spent on your email marketing (email service provider, staff hours, etc.) over a period of time and compare that to the revenues that were generated from the email marketing campaign during that same time period.

For most of us, however, it’s not that easy. The tricky part is determining what sales were directly influenced by the email marketing campaign.

For businesses where sales are completed offline (retail, restaurants, dry cleaning, etc.), you will need to have a way to track onsite sales back to your email campaign. Some possibilities include:

Presenting the email

The recipient either prints the email or shows a copy of the email on their mobile phone at the time of purchase. Emails are collected and/or tallied as customers use them.

Using a coupon code

The recipient is given a word or phrase that they must use to redeem the offer from the email (i.e. “Grocery50”). Each code is unique to a specific email campaign, so it is easy to track the effectiveness of each email.

$ 40 Average return on investment for every $1 spent on email marketing Direct Marketing Association

Creating a unique offer

Create a discount or offer that is only advertised via your email campaign. Any customers that inquire about the offer clearly learned about it from the email.

Each of these methods requires the business to somehow link the email directly to the purchase on the backend. This will be unique to each business based on its method of processing sales, handling receipts, tracking point-of-purchase information, etc. It may take some time and effort to implement, but it can be done!

Online sales are easier to track. Marketing automation tools can combine email marketing with web tracking to get a clear picture of what actions were taken by the customer after clicking a link in the email. The key is to make sure your tracking links contain all of the information needed to associate an email click with a campaign, and then track any conversions generated from that campaign consistently through your sales cycle in CRM (lead – contact – opportunity – account).

Whether sales generated from email marketing are tracked online or offline, ROI can be calculated using the following data:

Cost of email

Include any relevant costs such as email service provider fees, salary costs for marketing staff that created the email, etc.

Total revenue generated by email

The total dollar amount allocated to all email marketing (or to a specific email campaign). If needed, this number can be estimated by multiplying the number of sales generated by the email by the company’s average revenue per sale.

Profit margin (optional)

ROI can be calculated using gross revenue or profits depending on your preference or business purpose.

(Revenue [or Revenue * Profit Margin] – Cost) / Cost = ROI

For more information about creating URL parameters for web tracking, visit https:// support.google.com/analytics/ answer/1033867.

For example, let’s say that an online bookstore spent $5,000 last year on email marketing, which included their email service provider costs and staff time used to create the emails. Online sales were tracked in the store’s CRM using a campaign called “Email,” and the total revenues generated from sales associated with the Email campaign totaled $200,000. The store has a 10% profit margin, so the ROI for their email marketing last year is:

Costs: $5,000 Revenues: $200,000 Profit margin: 0.10 (10%) Profit: $20,000 ROI: 300%

That’s a pretty good return! A high rate of return is one of the appeals of email marketing. It is easy to reach a large number of customers at a fairly low cost. $ 0.08 Estimated revenue per email Experian Q1 2015 Email Benchmark Report