Email Marketing Metrics: How to Build Effective Benchmarks
There are three different tiers of email marketing benchmarks, horizontal, vertical, and historic. Horizontal statistics are gathered from industry groups, such as MarketingSherpa, or analysts, such as the Gartner Group. They survey hundreds or thousands of companies and millions of emails to gather, interpret, and produce email marketing data across industries and scopes. Vertical statistics compare data across one industry and sometimes even go so far as comparing data between like campaigns. While these first two methods provide useful information on the data collected from other companies, this information should only be used as a high level guide and not as a standard that you must hold yourself to.
The third tier, however, is based on your internal historic data gathered from actual campaigns you created and deployed. These benchmarks are an average of your campaign data over time and they give you unequivocal proof that your campaigns are either over- or under-performing.
To build your benchmarks, you must first identify the areas you want to study, such as the growth rate of your subscriber base or your conversion rates. Next, you must specifically define how you will gather information, select a control group, and determine the amount of time to conduct your study. Finally, you must research key factors and variables you will use to measure the benchmarks.
For example, if you are benchmarking your subscriber growth rate per month, you must determine your growth strategy and you must closely monitor the rates that subscribers are opting in and out of your email list. The first two weeks of the study should be used to simply monitor the amount of people that naturally opt in or out of your list, without any marketing pieces or other outside influences that could cause spikes in the data. This will give you a good idea of the number of subscribers and unsubscribers that you could expect on a normal business day.
The third week of the study should include an announcement or email newsletter so you can gauge the spike in subscriptions and opt-outs. The final week of the study should include a special offer for contacts that forward the email to a friend to encourage them to sign up. These two weeks will give you the data you need to compare the results from the first two weeks where data was gathered naturally. Analysis of these figures will allow you to accurately set your benchmarks.
It is important to remember that benchmarks are not static; they are always changing and must be monitored, reviewed, and updated continuously. Outside factors, such as the time of year, can greatly affect these numbers. As you build subscriber profiles and generate campaigns that are tailored to specific groups rather than your entire list, the benchmarks will help you quickly realize the campaign tactics that work best.
Knowing what your benchmarks are for the metrics that directly affect your budget, profit, and business processes will help you make accurate projections for future campaigns.