I wrote an article
a few weeks ago that spoke to the importance of having Key Performance Indicators, or KPIs, for e-mail programs. As a result of that article, I had quite a few responses asking for my thoughts on the best KPIs.
So what are the best KPIs? As with so many things in marketing, the answer is... it depends. The KPIs you select must be universal enough to be seen as key business drivers. They will be your means for showing how your e-mail program helps move the needle for the whole business, interpreted into statements and numbers that make sense to all. So, when you brag about your newsletter success--instead of just talking about open rate, or click-through rate, you can align that statistic to a meaningful business result that even executives can understand and value.
Rather than only share my biased view on KPIs, I asked other knowledgeable e-mail marketers to send me some of the best KPIs that they use today. When they first responded, I got the typical list of e-mail metrics. Following is a representative sampling:
General E-mail KPIs:
Campaign over campaign impressions/opens (total/unique/% rate)
Campaign over campaign clicks (aggregate/unique /% rate)
Click to open (% who open the message and click through)
Churn rate (% unsubscribe/opt out/undeliverable)
Send to a friend (viral rate)
ISP domain response (open/clicks)
Commerce-Driven Program KPIs:
Total sales (campaign, month, quarter, segment)
Profit/margin per e-mail sent / source
Sales per e-mail sent
Cost per e-mail sent
Average Order Value (AOV)
Number of orders
Conversion rate (to open/click through)
Number of site visits (page rank)
Number of leads (by product/client type)
Number of downloads
Cost per lead
Cost per visitor
Number of leads by entry page
Heavy user share
Average page views
Length of site visit by source
While all these are useful measurements, the challenge is to isolate the top three to five that mean the most to your business. When I asked my respondents to name their top three, few wanted to commit to so few, as is usually the case, but here are a few that came back universally at the top of the list.
The obvious choices for a commerce-driven business were:
Sales (total sales, sales by campaign/type/segment/cell, per e-mail delivered)
Profit/margin per e-mail sent and campaign level
List growth/churn (size of database, growth month over month, churn rate month/aggregate)
Some companies are driven more by conversion events than pure sales. They want to get a lead into the hands of a partner, call center or salesperson--so they are about efficiencies, rather than sales and/or profit margin.
Cost per lead
Funnel movement (how leads migrate through the funnel stages)
Total reach (how much of the prospect database can be reached at any given time). This includes churn metrics as well.
Notice that the primary KPIs for the two instances above are not about click-through rate or open rate.
When the real focus of the program is purely branding, the metrics seem simpler, but with a deeper definition:
Response rate (both open and click). Brand marketers are increasingly looking at the total reach of their base and less at campaign-over-campaign results. They want to count how many eyeballs were exposed to the brand each month, the resulting interactions and incremental Web exposures.
Site visits and site traffic. Site traffic statistics driven from e-mail are becoming increasingly valuable to see what content and interests are driven from each campaign/program and business division. Depth of site exploration...
List growth. All brands place increased value on the size and relative growth of the database since it represents a potential share of market and voice. It is essentially the lifeline to reach a mass of customers in an efficient manner. This, combined with qualitative feedback, is quite useful in measuring brand attitude, awareness and level of involvement with the brand.
Whatever you take away from this article, do remember:
KPIs must mean something to the folks who manage the program, and be actionable.
Your executives should buy into them.
Your KPIs will evolve, so don't hold them too personally.