Who’s this article for? Small business owners who want to find out whether their outsourced email marketing specialist is worth the investment.
Is email marketing working? Is your specialist worth it?
Do you truly know?
Is email marketing working for your small business?
Or do you have a gut feeling that it isn’t? Or is it too early to tell?
How do you prove that email marketing is making you money, or not?
Is outsourced email marketing specialist worth the investment?
This article will give you the knowledge as a small business owner, to answer these questions and make key decisions about the future of your email marketing.
What are your email marketing goals?
When evaluating your email marketing, you must first understand what you and the agency/company/freelancer providing your email marketing service are trying to achieve.
Typically, a small business would have the following general goals for their email marketing, to:
- Get in front of your ideal buyers as often as possible.
- Create emails that your ideal buyer loves and engages with.
- Provide human, helpful, valuable experiences to your contacts.
- Send great emails that nurture your contacts into happy customers and helps to grow your business.
But many small businesses get it wrong.
They simply send emails out in hope – a scattergun approach without any strategy – without getting deep inside the mind of their target customer.
Their sole goal is to send emails, because that’s all they think they should do.
If you hire in-house or outsource email marketing expertise, you should be in a much more informed place.
You should know that simply sending emails to your customers and prospects will not bring you success.
Success comes from sending the right emails, to the right people, at the right time – and that is much harder than it sounds.
If you crack that, you will have a database of contacts with whom you have strong online relationships. You will build trust, get more conversations, leads or online sales and increase revenue and profit.
But relationships aren’t built overnight – you probably won’t generate a sudden flow of online sales or conversations/leads early on.
Success like that takes regular rhythmic email marketing activity as part of a solid strategy.
You need to build strong email relationships and keep you and your brand in front of your ideal buyers. The more you do that, the higher the likelihood they’ll get in touch with you when they’re ready to buy.
If you only send a couple of emails a month, that relationship will be hard to build. If your content is focused on providing value, one email a week will give you a better chance.
Being able to judge how your email marketing is doing early on can be hard, so what do you need to look for?
Is your email marketing going in the right direction?
How do you know if relationships with your audience are improving? Are you building trust?
Here are some ideas about the direction your email marketing should be going.
Compare your email marketing to the world of dating and you can see similarities in how relationships blossom over time.
Imagine you’ve found someone you’re really attracted to:
- Your first dating goal is to get someone to agree to a first date, a coffee or something small – [the email equivalent is to get them on your email database and get your email delivered to them].
- Your challenge is then to get them to turn up to the date – [email equivalent: opening and reading all of your first email].
- Hopefully, they will want to find out more and agree and turn up to a second date – [email equivalent: opening and reading all of your second email].
- Your date might ghost you, and not reply to you after that – [email equivalent: If they don’t like you, some contacts may unsubscribe, or never open your emails, that’s usually the case if you’ve sent the wrong email to the wrong person, at the wrong time.
- For those that are still engaging, the relationship hopefully continues to flourish and becomes long-term – [email equivalent: consistent engagement with your messages over time – more emails, messages and conversations).
- Of course, it can potentially be a very long time before you become ‘official’ (boyfriend/girlfriend/spouse) – [the equivalent in the world of email marketing might be becoming a conversation, lead or the actual sale].
What we know is that building relationships is not easy, it’s all about building trust with your contacts and nurturing those relationships.
When you’re starting to work with your email marketing agency/company/freelancer, you may get some quick wins, but the real value will be in how your emails build the trust and relationships over time.
The pot of gold at the end of the rainbow is a database of contacts where their trust for you and your brand is undeniable.
When your contacts are ready to purchase, you’re the one they will get in touch with first.
Sometimes the only one.
A database with that power can be one of your company’s most valuable assets.
Is your company moving towards building a healthy list of contacts who trust you?
How to judge progress in the early days of working with your email marketing specialist
It’s very hard in the early days to judge whether your new approach to email marketing is working.
Has hiring an email marketing specialist been worth the investment?
It’s honestly not easy to say – your gut-feel will prove helpful here.
Progress depends on how healthy your database of contacts was before you hired your specialist. How strong was your email relationship with your contacts? And of course, how good is your email marketing team?
The first significant challenge is often that your specialist will have inherited a below-par list of contacts (if you had a list).
Relationships with your contacts are not built, or re-built overnight, so if you entered the process with a poor list/database, it will take time.
Even if your email marketing agency/company write your best-ever email, it’s useless if not many people are reading it.
You have to build trust over time so that more people read your email, and you need the right people in your database.
Progress towards your goals will be SLOWER if:
- You have a small list of contacts.
- Your contacts didn’t subscribe to your database/list from a place of warmth and a desire to hear more from you. If you’re the one that put them on your list, it’s going to be harder to build an email relationship.
- You’ve never sent emails to your list before hiring your email specialist.
- You have a larger list, but only a small proportion of people have opened your emails and engage.
- You don’t regularly send emails (once a week or fortnightly).
The more points in the list above that are true, the slower your progress will be. However, more revenue and profit is still truly in reach if you have the right strategy and execution.
What activity should your specialist be carrying out in the early days?
You should see very positive progress in the research and development of your email marketing strategy in those early weeks.
Small businesses must avoid a scattergun approach to marketing at all cost.
If you simply spend money on marketing, hoping for quick wins with little strategy, you won’t be in a much better place in 6-12 months time.
Wasted time and money.
Of course, it depends on how your email marketing company/expert has designed their service, but typically during the first couple of months, it’s about working together with your specialist to help them understand your customers, your audience, your business and your competition, so they can craft an email marketing strategy that’s more likely to get results.
So this period of time is important.
If your specialist is only interested in jumping on board, and sending emails without a decent discovery process, then the likelihood of failure and missed opportunities is going to be higher.
Your email marketing specialist needs to have a deep understanding of your customers and your business.
How deep the discovery process goes will depend on the size and complexity of your business, how many target markets you have, and how much your specialist feels they need to discover before finalising your strategy.
It may not be until the middle to end of month 2 that meaningful emails start to be sent.
But the goal in months 1-2 shouldn’t be about sending emails (of course that can happen), instead it should be about getting the right email marketing strategy in place – the right plans to lead to the right execution.
Check that your email marketing specialist is working on the following:
Creating your database/contact management strategy
Without the right people getting your emails, you’ll never see improvement. Going back to the dating analogy, it’s going to be hard to get a first or second date, if you’re talking to people who will never find you attractive in the first place. That’s why you need to make sure you’re managing a healthy database of contacts, who join your list in a proactive way.
Creating your segmentation research/strategy
A segmentation strategy can help you create and organise the relationships your business is developing with people.
Your specialist should help you to divide your contacts into smaller groups based on similarities, which means you can send emails that are more likely to be relevant and resonate.
Throughout this process, you will also see that your email marketing specialist is asking you the right questions, and carrying out discovery sessions/meetings that will create a powerful email marketing strategy that should make a significant difference over the next 12 months.
In the early days of working with your email marketing specialist, you must be seeing consistent strategy/marketing activity towards creating a powerful marketing asset.
If you don’t see this progress towards forming a plan, and only see the sending of emails, you may miss many opportuntieis.
In the first few months, your email metrics may not improve much, but with a strong strategy in place, you will start to see the basic metrics improve over time.
But what are the numbers/metrics that you need to track in your small business email marketing?
You must know your numbers
Email marketing = creativity + maths
As your email marketing really kicks into gear, knowing your email marketing numbers as a small business owner is critical to your success.
You can trust your gut instinct, but if you follow your gut without the data, you’re in danger of missing real revenue opportunities or conversely you could burn your hard-earned cash.
Data and numbers, with the human factor, really help you make informed decisions.
If you don’t have the right numbers in front of you, it’s easy to get your email marketing decisions wrong.
For example, without the right numbers you might:
- Wrongly, invest in your email marketing specialist for too long with little to show.
- Wrongly, bail out too quickly and miss out on revenue opportunities.
- Wrongly, stay with the status quo, not investing additional funds when the maths supports the opportunities.
- Wrongly, increase your email marketing investment, when the maths doesn’t support it.
The key is to judge your email marketing from a place of knowledge rather than hope.
Navigating Email Marketing Metrics
“The bottom line? Be smart about which metrics you’re tracking, and make sure you’re able to effectively measure your individual email performance, the health of your email list, and your progress toward your overarching goals. As long as you’re able to determine each of those, you’re on the right track for more effective email marketing.” says Hubspot.
How to Know Which Email Metrics to Track, Based on Your Goals
Hubspot goes onto say: “The goal of your email marketing may be very different from the goals of another company like yours, and may even vary within your own company over time. But again, it’s crucial that you determine exactly what it is you’re looking to achieve with your email marketing before you begin (or continue) to send and measure your emails.”
How do I get the ‘right email marketing numbers’?
We know that we need the right email marketing metrics in front of us to make key decisions.
But what are these numbers? Where can we find the metrics?
Your email metrics allow you to listen to what’s going on with your email marketing, and will allow you to make refinements to your entire email marketing strategy.
Hopefully, the analysis of the numbers is part of a conversation that happens with your email marketing specialist every month.
“Analysis of the numbers PLUS improvement is what will keep your business growing.”
So here we go……
The Top 8 Email Marketing Metrics
Let’s take a look at the metrics you should be paying attention to in your email marketing efforts.
We’ll start with the metrics every email marketer should be tracking, and then we’ll take a look at how to tie certain metrics to your specific goals.
- Clickthrough Rate
- Conversion Rate
- Bounce Rate
- List Growth Rate
- Email Sharing/Forwarding Rate
- Overall ROI
- Open Rate
- Unsubscribe Rate
1. Clickthrough Rate
- What It Is: The percentage of email recipients who clicked on one or more links contained in a given email.
- How to Calculate It: (Total clicks OR unique clicks ÷ Number of delivered emails) * 100
- Example: 500 total clicks ÷ 10,000 delivered emails * 100 = 5% clickthrough rate
2. Conversion Rate
- What It Is: The percentage of email recipients who clicked on a link within an email and completed a desired action, such as filling out a lead generation form or purchasing a product, or starting a conversation.
- How to Calculate It: (Number of people who completed the desired action ÷ Number of total emails delivered) * 100
- Example: 400 people who completed the desired action÷ 10,000 total email delivered * 100 = 4% conversion rate
3. Bounce Rate
- What It Is: The percentage of your total emails sent that could not be successfully delivered to the recipient’s inbox.
- How to Calculate It: (Total number of bounced emails ÷ Number of emails sent) * 100
- Example: 75 bounced emails ÷ 10,000 total emails sent * 100 = 0.75% bounce rate
4. List Growth Rate
- What It Is: The rate at which your email list is growing.
- How to Calculate It: ([(Number of new subscribers) minus (Number of unsubscribes + email/spam complaints)] ÷ Total number of email addresses on your list]) * 100
- Example: (500 new subscribers – 100 unsubscribes and email/spam complaints) ÷ 10,000 email addresses on the list * 100 = 4% list growth rate
5. Email Sharing/Forwarding Rate
- What It Is: The percentage of email recipients who clicked on a “share this” button to post email content to a social network, and/or who clicked on a “forward to a friend” button.
- How to Calculate It: (Number of clicks on a share and/or forward button ÷ Number of total delivered emails) * 100
- Example: 100 clicks on a share/forward button ÷ 10,000 total delivered emails * 100 = 1% email sharing/forwarding rate
6. Overall ROI
- What It Is: The overall return on investment for your email campaigns. In other words, total revenue divided by total spend.
- How to Calculate It: [(£ in additional sales made minus £ invested in the campaign) ÷ £ invested in the campaign] * 100
- Example: (£1,000 in additional sales – £100 invested in the campaign / $100 invested in the campaign) * 100 = a 900% return on investment for the campaign
7. Open Rate
What It Is: The percentage of email recipients who open a given email.
Typical open rates:
Typical email open rates aren’t too helpful, because so much is determined by the health of your list, but an average open rate would be something like 20%.
I’ve had consistent open rates of as high as 90% with a list of contacts consisting mainly of customers with whom the client had a weekly face-to-face relationship.
If your list consists mainly of customers, I’d expect a higher open rate than 20%. 50%+ open rates would be impressive.
If you’ve been working with your email marketing specialist for a long time, and you’ve implemented the majority of their recommendations, and your open rate is less than 20%, then it’s concerning.
Below 20% open rate, the database doesn’t have much trust for you and your brand. It’s then important to consider the number of people opening the email, not just the rate. 20% of 100 is very different to 20% of 10,000.
PRO TIP: Don’t expect to suddenly improve your open rates. But with the right strategy in place, the health of your list will improve and open rates should improve too.
8. Unsubscribe Rate
What It Is: The percentage of email recipients unsubscribe from your send list after opening a given email.
Here’s how Hubspot suggests you can align your specific goal with key metrics.
Lead-to-Customer Conversion Rate
“Let’s say you want to focus more toward the middle/bottom of your marketing funnel, and convert more of your existing leads into customers, or more repeat customers. If this is your goal, the emails you’re sending will likely provide content more closely related to your business and your product or service. Your calls-to-action may include “Get a demo,”, “Book 10-15 min call”, “Watch a Video of Our Product in Action,” or “Start a Free Trial.” If this is your goal, you should be tracking changes in your lead-to-customer conversion rate.”
Subscriber List Growth Rate
“If your focus is on growing the top of your funnel — attracting more visitors to your site, signing up more blog subscribers, getting more people to use your free tools, that kind of thing — your goal will probably be growing your subscriber list. Individual one-off emails will likely contain calls-to-action such as “Subscribe to Our Blog” or “Join Our Weekly Email List.” So of course, the most important metric you should be tracking for this goal is the growth rate of your subscriber list. “
“Just as you want to track and grow your subscribers, it’s also important to keep an eye on your unengaged subscribers — and consider removing them from your list altogether. Why? Because sending emails to people who aren’t engaged with your emails (called “graymail”) can hurt the deliverability of your email overall. Email clients might get tipped off by low engagement rates and deliver email from known-graymail senders straight to recipients’ “junk” folders, meaning your emails will technically get sent and delivered, but won’t necessarily be seen.”
Number of New (or Total) Leads Generated
“Maybe instead of focusing on subscribers, you’d like to work on growing lead generation. If this is the case, you should be sending emails that offer lead generation content — in other words, content that requires the viewer to fill out a lead capture form in order to access it.
If the goal of your email marketing is lead gen, you should be tracking how many leads you’re capturing every day, and every month. You can decide to focus on all leads generated, or only new ones added to your database, depending on your priorities. “
Once you have the right numbers, you can start to answer the right questions…
Every month you need to work with your specialist to get the data to allow you to make the really important decisions about your email marketing.
- Is the health and value of your email database increasing?
- Do you need to invest less money, the same or more in your email marketing and your specialist?
- What return on investment are you getting?
Are you confident that you can answer the key questions above accurately and back them up with real numbers?
Your next step is to work with your email marketer to get the right numbers and the right answers in front of your every month.
My name’s Mark Reynolds, the owner at ProfitReach. If you’re feeling overwhelmed with marketing, maybe you’re not sure what you should be doing to get more customers, well please don’t worry. I’m here to give you the guidance to generate a more consistent and predictable flow of customers in 2024. I’ve been helping ambitious individual UK entrepreneurs/small business owners get more customers since 2002, so maybe I could help you too? Learn more here.