So you’ve decided to explore the world of online marketing and you’ve started a blog. Awesome! Now it’s time to find some funds to grow your business and build up a decent audience. How about trying to monetize your content? That’s the key to making money online. Having an audience is great, but even more valuable is the fact that you can then engage with them and sell your products. While this might not seem obvious at first, you’d be surprised how few bloggers actually make money from their efforts.
Let’s take a quick look at the common metrics that you can use to assess the success of an email marketing campaign and how you can use them to plan your next move
Open Rates and Click-Through Rates
The first two stats that you’ll want to learn are open rates and click-through rates. Open rates are the percentage of people who have opened your email, while click-through rates indicate the percentage of people who have clicked on a particular link or button in your email.
You’ll almost certainly be familiar with the term A/B testing, which stands for alternating sets of A and B to see which performs better (A/B testing can be applied to many different situations – this blog post uses the example of testing two email marketing campaigns to illustrate the concept).
What you might not be familiar with is the concept of statistical significance when it comes to online marketing. Simply put, A/B testing is only valid if the results are statistically significant. This means that your sample size needs to be big enough to allow you to draw accurate conclusions.
Before starting any A/B testing, you’ll want to determine how many people you need to aim to reach to make the results of your campaign meaningful. That is the basis of your sample size. When you have that figure in mind, it’s time to get to work.
Email Open Rates
If you’re new to email marketing, the first thing you’ll want to do is set up a campaign. Once you do that, it’s time to track your open rates. This entails making a list of every email that you send out, including the subject lines and copy (what you say in the email).
From that point forward, you’ll want to check your open rates every few days, or at least each week. This is especially important if you’re testing various styles of emails or sending seasonal campaigns. Otherwise, you could miss out on valuable data if you don’t monitor your open rates closely enough.
When you’ve hit upon a subject line or body copy that you think works well, double-check it against your open rates. You never know – you might have accidentally sent out an unpopular email and the low open rates are skewing your results. It is only when you have confidence in the numbers that you can move forward with your next course of action, which in this case would be to try something different.
Clicks Through Rates
Just as with open rates, you’ll want to track the click-through rates of your various email campaigns. This is a little more involved and requires a bit more work, but it is also a lot more important. When someone clicks on a link or button in your email, that is equivalent to them making a purchase (or a similar conversion action) – that is, subscribing to your newsletter or liking your Facebook page).
As we mentioned, getting interested parties to take action is often a key issue when it comes to generating sales from an audience. To get them to click on a particular link or button, you’ll want to make sure that the offer or connection that you are making is relevant to them and that it is something that they’ll find value in.
The goal here is to build interest and encourage action – not just sales.
Cost Per Signup
Once you’ve got your audience, the next thing you’ll want to do is figure out how much it costs you to get a single person to subscribe to your newsletter. This is often a difficult number to come by, but the more you can find out, the better. The cost per signup is typically based on several factors including the size of your audience, the country you’re in, and the type of product you’re selling (bundle offers or one-off products).
For example, it costs a lot less to attract a 100,000 audience in Germany than it does in Thailand. With an audience that size, you can expect to pay around $400 per month for web hosting and around $50 per month for domain registration.
As you accumulate more and more subscribers, it is always nice to be able to report on your cost per unit (sale, signup, or whatever you want to call it). Knowing how much you are spending on each new subscriber is a great indicator of whether or not your efforts are paying off. When you reach a certain point where each additional subscriber costs you the same amount of money, you know that you’ve reached scale and it’s time to branch out into different markets or products.
Conversion Rates (One-Click, Partial, and Verified Subscriber)
Once you’ve got a couple dozen or so subscribers, it is time to start collecting data on conversion rates (the ratio of people who took a particular action (for example, purchased a product) to the number of people who subscribed to your email list).
You’ll want to track these metrics for different actions to get an idea of how successful your different campaigns are. For example, did your newsletter signups lead to a purchase, or did they just generate interest (and therefore more subscribers) without ever making an impact on the bottom line (i.e., product sales)?
You can take this one step further and see how much each action (subscribe, open, or click) is worth. That way, you can put a dollar amount on all your marketing efforts and know exactly how much you are contributing to the bottom line.
Average Order Value
From a marketing standpoint, you might be interested in knowing the average order value of your customers. You can get an idea of the size of your audience, the types of products they’re interested in, and whether or not you are reaching the right audience.
If you are running a retail website, you might want to consider taking this number into account. After all, it takes money to make money. If you want to be able to sell more products and generate more revenue, you’ll need to find a way to get your audience to spend more money. Therefore, it is always a good idea to experiment with various marketing methods and analytics to see which ones bring in the most revenue and advance your business the fastest. In our next blog post, we’ll cover A/B testing and the basics of Google Analytics – stay tuned!