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Evaluate email newsletters: key performance indicators

March 31, 2015

This article describes the basic factors and indicators used in newsletter marketing, and their meaning as a statistical evaluation.

To be able to measure and evaluate a carefully conceived email newsletter that uses all the tricks of the trade, a plethora or tools are usually available. If understood correctly, this information can accurately convey the effectiveness of a given newsletter campaign. But there are differences between short-term and long-term goals. Short-term goals, such as generating turnover by advertising a single product  or group of products via active dialogue created by customer actions, can be evaluated both quantitatively and qualitatively to great effect. The effect of individual newsletters on long-term goals such as customer retention and branding cannot easily be ascertained from the following statistics.

Key performance indicators in newsletter evaluation

The open rate (unique open rate)

This statistic describes the number of newsletters read by recipients (no. recipients who opened the email at least once) in relation to the total number of newsletters sent (successfully delivered). Newsletters that could not be delivered (bounces) are not included in this number. Equally, if a newsletter is opened multiple times by a recipient then only one ‘open’ is counted. Example: if a newsletter is sent to 2050 people and 500 people open the newsletter, but 50 of the emails could not be delivered to the inbox, the open rate is 1/4 or 25%.

The open rate is a central statistic in newsletter campaigning. The unique open rate is, however, not to be viewed as an exact number, but more of a situation indicator. Furthermore, it indicates the lower limit of the open rate, as some email opens do occur without them being tracked.

The click rate (Click-through rate / CTR)

The click rate / CTR is a more informative statistic with regards to the interaction actually achieved with the customer.  It is calculated the same way that the open rate is calculated, except that instead of newsletter opens, the ‘clicks’ (on links contained within the newsletter) are shown in relation to the number of successfully delivered newsletters. Whilst the open rate is very useful, it can be inaccurate due to the settings of individual email clients. The click rate, by contrast, is a clear representation of interaction with the reader. And it ensures you that the reader has received the email, clicked on some content and read at least one part of the newsletter.

The click rate or click-through rate is therefore the most important measuring tool in email marketing. Up-to-date newsletter software allows the CTR to affect the open rate and therefore helps to cancel out any statistical inaccuracies.

The bounce rate

The term bounce in newsletter marketing indicates an item that could not be delivered. Possible reasons for a bounce include: an email address may no longer exist; technical problems with the recipient’s email server; or the configuration of the receiving email server.

The bounce rate describes the relationship between the number of bounces that occur and the total number of newsletters sent. There is a difference between permanent errors (hard bounces) and temporary errors (soft bounces). The bounce rate can also vary, depending on the definitions attributed to it. Possible reasons for variations include the time elapsed since the newsletter was sent, the technical quality of the bounce recognition (email server configuration and delivery attempts), the quality of the address data, as well as the maintenance of the database (bounce clean-up).

The terms ‘bounce clean-up‘ and ‘list hygiene‘ indicate that erroneous addresses are deleted from the address database. Removal from the database normally occurs after three hard bounces are registered. A high bounce rate is a clear sign of a poorly maintained recipient list and can damage the IP reputation of the newsletter sender (SPAM classification).

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