You may be asking yourself ‘if this article is about marketing and I’m in Customer Success, why am I using my precious time to read it?’ That would be a valid question. But the answer may not be what you think. It’s not about inter-departmental cooperation or collaboration, or even about learning from your peers. It’s about gaining insight into customer engagement to understand how they’re interacting with your company.
Marketers regularly rely on email metrics because that data tells them who is ready to move down the funnel, and maybe even talk to a salesperson. Customer Success organizations can and should rely on those same metrics to tell an entirely different story – to understand which customers are engaging with your company through this crucial channel, and which are not. Would it surprise you if I told you that customers who read your emails are much less likely to churn than those who don’t? Well, it’s true. Email metrics serve as customer engagement metrics, which are incredibly powerful predictors of churn. The higher the level of customer engagement, the lower the likelihood of churn.
The four basic metrics that I recommend utilizing to gain insight into your customer base are Bounce and Delivery Rate, Open Rate, Click Through Rate, and Unsubscribe Rate. They’re all simple calculations that by monitoring, can make a big impact. Keep reading to understand what each metric entails, and how you can use that data to your advantage.
Bounce Rate and Delivery Rate
To understand who is receiving your emails (and perhaps more importantly, who isn’t), you can utilize either Delivery Rate or Bounce Rate. Each of these metrics is essentially the inverse of the other. Delivery Rate indicates the percentage of people who actually received the email you sent, whereas Bounce Rate is the percentage of people whose email server ‘bounced’, or rejected, your email, and therefore they did not receive it. Email bounces can happen for a whole host of reasons, including an invalid email address, spam and security filters, or temporary technical issues with either the sender or the receiver.
While Bounce and Delivery Rates don’t technically measure customer engagement, they are the precursors to that. If people aren’t getting your emails in the first place, there is absolutely no way for them to engage with you through that channel. Bounce and Delivery Rates should remain relatively constant from one email send to the next, with a low Bounce Rate (under 1%) and high Delivery Rate (over 99%). If you see changes over time in these metrics, or if your bounce to delivery ratio is higher than that 1:99, it may be a sign of an issue that needs addressing.
The most likely culprit is invalid email addresses. Inaccurate contact data isn’t uncommon, regardless of how much emphasis you’ve placed on keeping your CRM clean. This is particularly common when you first begin sending automated emails to any list in your database. Contacts change roles and companies all the time, so you’re bound to have some number of emails (and phone numbers) that may have been accurate when they were added to your system, but have since changed or become outdated.
Be sure to remove any bounced email addresses from future email sends. Depending on the tool you’re using, the system may do this automatically, or you may have to manually remove those bounced contacts. If invalid emails is the source of the bounces, you should see Bounce Rates drop and Delivery Rates rise each time you send a new email without those bounced contacts. You should also consider the implications of having an invalid email address in your contact list. Was the email address invalid because of a typo? Double check name and email domain spelling! If that person is no longer with the company, who is our new contact? Do you have their name and contact information?
If removing bad email addresses doesn’t get you within that 1:99 bounce to delivery ratio you’re aiming for, then it’s probably worth having a conversion with your IT team. Has your email sending domain been configured correctly? Are other teams within your company seeing similar issues with email deliverability? Can they help identify any additional information about the reason(s) for the bounces? While relatively simple on the surface, the true reasons behind email bounces can be very technical and complex. If you find yourself in this scenario, IT may even thank you for identifying an issue that could potentially negatively impact the entire company’s ability to send emails to customers, prospects, even employees! You may have just saved them a big headache by catching it early.
Once your email has been sent and delivered (hopefully at that 99% rate!), the next step is, of course, for your customers to open and read that email. After all, you wouldn’t be sending it if the information inside wasn’t valuable, right?!
That’s what I thought.
Opening an email is what I consider ‘level 1’ of customer engagement. It’s the first sign that someone values what you have to say, so they take the action to read it (okay, at least skim it). The formula for calculating Open Rate is the number of people who opened your email, divided by the number of emails delivered. Notice I said delivered, not sent. If an email bounces and that person never actually receives your email, then there is no way they could open it (even if they wanted to), so those bounces should not be included in your Open Rate calculations.
Open Rates are typically highest during onboarding, with an average of a staggering 57.8% according to some sources. Don’t be alarmed if your Open Rates aren’t this high, as they can vary by industry, and be impacted by factors like your total mix of communication channels. It’s also quite common for Open Rates to fall off once customers exit the onboarding phase of the customer journey. Onboarding is typically when customers are most excited to use their shiny new product, so a downward trend once the honeymoon phase is over is to be expected.
The biggest variable in your Open Rate is usually your subject line. The better the subject line, the better the Open Rate should be! While that’s obviously easier said than done, there are a variety of strategies to try that can help increase Open Rates. For example, use personalization! If the tool you’re using to send emails has the ability to include first name personalization in subject lines, I highly recommend giving it a shot. Other subject line best practices include:
- Keep it short – typically under 50 characters
- Use limited punctuation and use emojis sparingly
- Avoid ‘spammy’ words like ‘free’ or ‘guaranteed’
- Make it relevant to your audience and their needs
- Show urgency – don’t forget that most people experience FOMO!
If you’re struggling to come up with something catchy, check out HubSpot’s list of 31 of the Best Email Subject Lines We’ve Ever Seen to get the creative juices flowing. In addition to subject line, the day of week and time of day that your emails are sent can impact Open Rate. Test different days and times to see what resonates best with your audience.
Click Through Rate
This is my absolute favorite metric to measure customer engagement. Once someone has opened your email, are they taking the next step that you want them to by clicking on your call to action (CTA)? Maybe that next step is clicking a link to activate their account or schedule a meeting with their CSM. Maybe it’s to watch an informative video that your team created to explain a new product feature. Maybe it’s to update their billing information. Whatever the action is that you want your customer to take (aka: the reason you sent the email), they need to ‘click’ to do it.
So, while opening an email indicates ‘level 1’ customer engagement, taking the additional action to click on a link in an email bumps someone up to ‘level 2’ customer engagement in my book. It means they’re doing the thing you want them to! That should be music to your ears.
To calculate Click Through Rate (CTR), divide the number of people who clicked your email by the number of people that opened it. This calculation is important, because it can be easily confused with Click Rate, which is the number of people who clicked your email divided by the number of people that received it. Confusing, I know. Click Rate can be a valuable data point as well, but I prefer Click Through Rate because it focuses on the people who actually had the ability to click on a link in your email. If they didn’t open it first, there’s no way they could click, so I prefer to narrow it down to the ‘possible universe’ with CTR.
If a company is sending you what feels like a million emails, how fast will you click the ‘unsubscribe’ button? (Hint: the answer is pretty darn fast.) We all know what it feels like to be bombarded by messages from a company, whether they’re trying to sell us something, or we’ve already purchased and now they’re trying to get us to use it. A high Unsubscribe Rate will tell you if you’re being that company.
Mathematically, Unsubscribe Rates are the percentage of people that clicked ‘unsubscribe’ in your email, out of the total number of emails delivered. But in practice, they act as a ‘you’re being annoying’ alarm. Craft your email strategy thoughtfully and holistically, so you don’t overwhelm or irritate your customers.
High Unsubscribe Rates can also be a sign that you’re sending messages to the wrong people or that your messages aren’t valuable to your audience. If you see Unsubscribe Rates increase, re-evaluate the why behind your messages. Are they relevant? Are you sending them to the right contacts or personas?
The Big Picture
When it comes to building strong customer relationships and predicting churn, it’s all about having as much information as you can possibly gather about your customers, their behavior, and their engagement with your company. So take advantage of every data point you have access to, including borrowing a strategy from your friends in marketing and utilizing email metrics as one measure of that customer engagement to help inform your larger strategy.