Making Money On-line: Understanding Marketing Metrics: Email Click Rates

Marketing metrics are more than just numbers. Without the proper understanding and context, you can’t turn these numbers into the valuable insights you need to make better tactical and strategic decisions.

In this series of posts, we’ll look at a variety of marketing metrics, discuss how to measure and use each one, and how to benchmark your performance. In this post, we’re examining email click rates. We’ll begin by explaining...

How email click rates are measured

Let’s start with clicks, which are registered when subscribers click on any of the links in your emails. Most email service providers (ESPs)—including Oracle Responsys, Eloqua, and Bronto—replace the links in your emails with their own unique links that then redirect to your intended URL. This allows ESPs to accurately track all the traffic from your emails to each URL. Some ESPs will exclude clicks on unsubscribe links from the click count, since this isn’t considered a sign of positive engagement.

To calculate click rates, you divide the number of clicks on the links in your email by the number of emails delivered, which is the number of emails you sent for a campaign minus the number of emails that either soft bounced or were undeliverable and hard bounced.

Click Rate = (Clicks / Delivered) * 100%

When subscribers click multiple times in the same email, it’s a signal of deeper engagement. For brands who send emails promoting many products or pieces of content, this can be a valuable performance indicator. However, it can obscure how individual calls-to-action are performing as well as how you’re doing with individual subscribers.

To get a better view of how individual links are performing, many senders measure unique clicks, which is the total number of links clicked by each subscriber. This calculation doesn’t count multiple clicks on the same CTA by a subscriber. Using that, you can then calculate the unique click-through rate (UCTR) by dividing the number of unique clicks by the number of delivered emails.

Unique Click-Through Rate = (Unique Clicks / Delivered) * 100%

To get a better view of the engagement of individuals, many senders measure unique responses, which is the number of subscribers who clicked at least once in the email. This calculation doesn’t count clicks on multiple CTAs by a subscriber. Using that, you can then calculate the responder rate by dividing the number of unique responses by the number of delivered emails.

Responder Rate = (Unique Responses / Delivered) * 100%

Another helpful way of looking at click rates is by dividing clicks by the number of email opens instead of the number of emails delivered. This produces the click-to-open rate (CTOR), which allows you to measure how openers responded to the body content of your email and see if that propelled them further down the email engagement funnel.

Click-to-Open Rate = (Clicks / Opens) * 100%

Now that we’ve explained how click rates and unique click-through rates are measured, let’s discuss…

How to best to use email click rates

Here are some truths about how click rates should be used and how they shouldn’t.

Click rates aren’t a good business impact metric...for most businesses

Ask any CEO what their key performance indicators are and very few are likely to say clicks. That’s because most ecommerce, retail, service, and other businesses are focused on revenue, bookings, and other metrics.

However, some businesses are correct to use email clicks as a KPI, including many media companies, B2B companies, subscription-based businesses, and CPG and other product companies. In these cases, engagement with email content increases evangelism, customer retention, customer satisfaction, and other goals. If you’re using clicks as an end-goal of your email program, just be sure that a metric farther down the funnel isn’t more appropriate.

“Your email program may also need to lean on clicks as a KPI if revenue attribution is difficult at your company” says Nick Cantu, Senior Art Director for Creative Services at Oracle CX Marketing Consulting.

“Some of our clients have had issues attributing revenue to certain channels,” he says. “In those cases, they were really driven by clicks and traffic that our emails created. We had to create reports that showed traffic trends and see if increases correlated to revenue trends.”

Click-through rates are great at measuring the efficiency of your email creative.

When doing any kind of A/B test on your email copy or design—including from names, subject lines, and preview text—click rates are usually the best victory metric to use. That’s because it shows what percentage of recipients are making the transition from the email to the landing page, which is usually the primary goal of an email.

Click-to-open rates signal how aligned are your envelope content and body content.

When marketers use gimmicky, vague, and mysterious subject lines and preview text that don’t tell would-be openers much about the actual content of the email, they’re sometimes rewarded with higher open rates. Humans are curious creatures after all.

However, just because you tricked or lured a subscriber into opening your email doesn’t mean that they’re going to click. In fact, it generally means they’re less likely to click and, even worse, more likely to ignore your future emails or opt-out entirely. Humans don’t like having their time wasted after all.

Your click-to-open rate tells you what portion of the subscribers who opened your email decided to further engage with your email. A high CTOR demonstrates strong alignment between your envelope content and body content. A low CTOR indicates poor alignment.

Click-to-open rates can tell you how efficient your email’s body content is

This can be used to optimize design at the module or layout level. “It can tell you how efficient the messaging and design are at driving subscribers farther down the funnel”, says Cantu.

“We are really focused on CTOR when we’re testing new designs, content, and templates,” he says. “This should be the design team’s best friend when trying to prove out certain elements of the email.”

A low click-to-open rate can also indicate disconnects in expectations.

“If your open rates are high, but your click rates are low, that generally speaks to a letdown for subscribers,” says Cantu. That mismatch in expectations generally means one of two things.

“First, it can mean that your subject line and body content aren’t aligned,” he says. “Your subject line sets up an expectation—or perhaps is vague and fails to set an appropriate expectation. Then, your body content falls short. Second, it can mean that your audience is interested in your brand but that the email content isn’t triggering them to engage. That’s when we like to start doing more content tests in the email to see if you can get an engagement bump.”

What is a good email click rate?

In general, our consultants see three percent or better as a good click rate. However, that comes with the same caveats that we discussed in our post about understanding email open rates, namely;

Focus on your average click rate over a period of time, rather than fixating on the click rate of each campaign.
Look at click rates across email clients, as low click rates in one email client can signal deliverability or rendering issues.
A good click rate varies by the type of campaign. More personalized and targeted emails see higher click rates, while untargeted emails yield lower rates. For example, our clients generally see welcome and shopping cart abandonment click-through rates of two to six times their average promotional email click-through rate.
A good click rate also varies based on the audience it’s sent to. Campaigns sent to more engaged subscribers see higher click rates and those sent to inactive or at-risk subscribers see lower rates.

“Once you have a good understanding of how your various campaigns are performing based on email type, audience, and messaging strategy, establish that as a bar to beat,” says JT Capps, Director of Strategic & Analytic Services at Oracle CX Marketing Consulting. “Compare new campaigns against that benchmark and A/B test improvements to try to raise that bar over time.”

Want more advice on how to calculate and use email metrics? Check out these related posts:

Understanding Marketing Metrics: Email Open Rates
(coming soon) Understanding Marketing Metrics: Conversion Rates
(coming soon) Understanding Marketing Metrics: Deliverability

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