Which email marketing KPIs should I track? Part 1

Which email marketing KPIs should I track? Part 1
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KPIs are something that all C-suite executives request to see across marketing channels, but seldom do email marketers know what to track or how to gauge the success of their email program.

Which KPIs should I track over email?

This is a great question that can be quite nuanced and complex to answer depending on the brand you’re working with.

This is going to be a two-part series of articles due to the inherent complexity of this question and the variables at play.

For the first instalment, I’m first going to tell you what NOT to track:

  1. Don’t look at email as a % of revenue and obsess over some arbitrary amount (i.e. 40%) and use that to justify increasing email frequency or pat yourself on the back.
  2. Don’t look at Revenue Per Recipient (RPR) and exclusively judge the success of email based off of each send.

Let me explain why both are flawed.

Revenue % attributed to email

If your revenue % attributed to email is too high, it likely means you have an acquisition problem.

A brand that is excessively dependent on email to drive revenue is not a brand that will survive in the long-term.

Even with an exceptional level of retention (say, 35-40%), the fact remains that you cannot keep all customers. They buy from multiple other brands, the competition is fierce, and they often don’t use your products and yes, sometimes stop buying from the category altogether (and even die).

To counteract this, you need a constant stream of new customers in order to keep growing an eCommerce brand, irrespective of which stage you’re at in your business.

Therefore, email revenue as a % of total revenue is the wrong thing to focus on. If it’s too high, it means you’re not doing an effective job at acquiring new customers.

And while “owned revenue” is certainly healthy (and I would never downplay this), don’t fall into the trap of thinking that you’re in control of a profitable beast just because email % as a whole skews high.

Revenue Per Recipient (RPR)

I wrote a post at the beginning of this year dispelling the notion that Revenue Per Recipient should be held up as a benchmark for email success.

It’s worth repeating again my logic for disregarding this metric on the whole:

“One metric/benchmark I'd like to see Klaviyo leave behind this year is Revenue Per Recipient (RPR).

While I love the software and have built a business around it, RPR doesn't provide meaningful insights for most businesses and can be grossly misleading at worst.

If you want to boost your RPR, it can easily be manipulated by creating a bunch of discount codes and blasting your list.

It doesn't mean you'll have a profitable business to show for it, however, and it can lure you into a false sense of security that your email marketing program is effective.

Not every email needs to sell, and agencies and marketers who pursue CRM strategy that delivers content, engaging value and touchpoints beyond sales-focused emails need to be praised for using the platform's full capabilities, not penalised by being benchmarked against another business with a high RPR.”

Now, let me caveat this by saying that there are SOME uses for Revenue Per Recipient, but it can be very difficult to objectively measure the total success of a campaign using this metric based on how complicated unit economics are.

During sales campaigns (such as Black Friday Cyber Monday), I am not against using RPR (assuming control over margin) to key segments to gauge the effectiveness on a campaign-level of your promotion.

But even that, it can be distorted incredibly easily and you can lose sight of what matters (total revenue/profits per campaign).

To illustrate my point, RPR can be extremely high if you were to email your VIP customers with a 50% off coupon (obviously, they’re going to take you up on this).

However, if you cast a wider net to include regular customers and winback segments, your RPR will drop significantly, but total revenue will increase dramatically.

There have even been times when we’ve taken over a client account, total RPR has dropped (due to scaling back on discounting and implementing our Email Marketing Methodology), but total revenue and profitability of the account has increased.

Starting to see its limitations?

And this will bring me nicely on to what metrics I consider worth tracking in the next instalment of this series, but you’ll have to wait for next week until I reveal these!

Concluding Thoughts

Unfortunately, platforms like Klaviyo perpetuate the notion that these metrics are key drivers of email success, and they feature them heavily in their “Benchmarks” which are produced on a monthly basis to judge the performance of your account.

I believe this is to justify the investment in their software and because email is siloed to producing revenue from most people’s viewpoints.

I get it: at the end of the day, this is eCommerce, and revenue matters; you wouldn’t have a business otherwise. But looking at these metrics in isolation is dangerous, inefficient, and not conducive to measuring the success of your email marketing program.

Next week, I’ll tell you what we actually believe is worth tracking.

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