Email Marketing Metrics That Every Small Business Owner Should Know

Email marketing remains one of the most cost-effective strategies for small businesses looking to engage and retain customers. But to get the full impact, closely tracking key email metrics is essential.

Monitoring open rates, clickthrough rates, conversion rates, and other metrics allows you to optimize campaigns over time and improve results.

This guide explores some of the most important email metrics every small business owner should be tracking. It outlines the benchmark targets to aim for and also provides tips to improve each metric.

Why Email Metrics Matter

Email marketing analytics give valuable insights into audience behavior and engagement. Without tracking metrics, you miss out on data to significantly improve the performance of your emails. For example, low open rates may indicate problems with subject lines or send times. Or high bounce rates could mean your list needs cleaning.

Optimizing is an ongoing process. You need to continually track metrics over time to identify trends and refine your approach – it’s this consistent optimization that gives you a competitive advantage.

Below are some of the key metrics every small business should be tracking:

Keep Close Tabs on Open Rates

The open rate shows the percentage of recipients who opened your campaign. It’s calculated as:

(Opens / Total Emails Sent) x 100

This reveals how appealing your subject lines and previews are to subscribers.

According to a September 2023 Constant Contact study, the average open rate across industries was about 34 percent (1), so aim for at least this figure.

If your rates fall short, try these optimization tips:

• Test different subject line lengths and styles.
• Personalize subject lines using first names.
• Use recognizable sender names.
• Add calls-to-action in previews.
• Optimize for mobile.

Continually A/B test subject lines to discover what resonates most with your audience.

Click-Through Rates Reflect Engagement

The click-through rate (CTR) shows the percentage of recipients who clicked links in your email. It’s calculated as:

(Clicks / Emails Sent) x 100

A higher CTR indicates your content is providing value that readers want.

According to the previously mentioned study, the average CTR across industries is 1.33 percent.

To boost CTR:

• Place important links near the top of emails.
• Use action-driven call-to-action copy.
• Only include one or two links to avoid overload.
• Make links visually distinct.
• Test different link text and placements.

Pay attention to which links get the most clicks. This reveals the offers and content that resonate most with your audience.

Monitor Conversion Rates

The conversion rate shows the percentage of subscribers who took your desired action after receiving your email. This could include:

• Purchasing a product.
• Signing up for a webinar.
• Downloading content.

It’s calculated as:

(Conversions / Emails Sent) x 100

Average rates vary widely by industry. For small business retail, 2-5 percent is a decent range to aim for.

To increase conversions:

• Personalize with names, company names, etc.
• Send cart abandonment reminders.
• Make CTA buttons prominent.
• Test different thank you/receipt pages after signups or purchases.
• Optimize signup forms and CTAs for mobile screens.

Closely monitor conversions on promotions, lead magnets, and calls-to-action. This reveals what converts readers most effectively.

Growing Your Email List

Having a larger email list expands the reach of your campaigns. However, rapidly expanding your list with disengaged or uninterested contacts can backfire. If your list grows too fast, it may indicate many of the new additions are low quality leads or subscribers that won’t actually engage.

According to a Data and Marketing Association study, the average list growth for email marketers is 2.5 percent (2).

To calculate list growth rate:

1. Subtract unsubscribers from new subscribers.
2. Divide that number by total emails.
3. Multiply by 100.

There are a few ways to boost growth:

• Offer lead magnets in exchange for emails.
• Provide exclusive discounts or freebies for subscribers.
• Use quality content to attract sign-ups.

Avoid buying lists, as those contacts lack connections to your brand.

Focus on building genuine, personal relationships with new subscribers to improve retention and engagement.

Track Engagement Metrics

Metrics like opens, clicks, and shares indicate interest. But also monitor negative indicators:

Bounce rate: Percentage of emails failing to deliver due to invalid addresses. Aim for under 5 percent.

Unsubscribe rate: Percentage who opted out of your list. Aim for under 0.2 percent per campaign.

Spam reports: Percentage marking emails as spam. Your goal should be under 0.1 percent.

Monitoring engagement reveals issues and maintains list health.

Deliverability Matters

Deliverability is the percentage of emails reaching inboxes. To maintain high deliverability:

• Keep bounce rates low.
• Build a good sender reputation through engagement.
• Avoid spam trigger words.
• Slowly increase sending volume when using a new email address.

The reason to gradually increase sending from a new email address is because inbox providers will see that address as an unknown sender at first. So it’s best to slowly ramp up sends to build a good reputation, rather than blasting out a ton of emails right away from the new address.

Aim for at least 85 percent deliverability. Use email verification tools to catch issues before sending.

Strong deliverability means your emails actually reach subscribers. Don’t let deliverability problems reduce open and click rates.

Calculating Return on Investment (ROI)

Analyzing campaign costs versus revenue generated provides your ROI. The formula is:

ROI = (Revenue – Cost) / Cost

ROI gives you hard numbers on your campaigns’ financial performance.

Tools like Mailchimp and Omnisend calculate ROI based on costs and sales data, eliminating profitability guesswork.

A/B test different segments, offers, and content to find what provides the highest ROI. Eliminating unprofitable campaigns can improve overall ROI.

Key Takeaways to Remember

• Closely monitor open, click, and conversion rates to optimize campaigns.
• Track engagement and deliverability metrics to gain insights into list health.
• Regularly calculate return on investment to gauge profitability.
• Use industry benchmark data to evaluate email performance.
• Test subject lines, content, timing and segments to boost results.
• Promptly cut unprofitable efforts dragging down ROI.
• Maintain list health by vigilantly monitoring engagement.

Next Steps

Begin by researching benchmarks for your niche so you can set realistic goals. Audit your email marketing efforts to identify areas lagging behind that need improvement.

Initially focus on one or two of those lagging metrics. Brainstorm fresh ideas to test, like new subject line styles, engaging content approaches, or different segmentation strategies. Closely track performance data to see what’s working. Testing small tweaks consistently over time can drive major gains. Stay laser focused on metrics and keep refining your campaigns. With this results-driven mindset, any small business owner can more effectively connect with customers through email.