The success of email marketing campaigns is usually measured by the engagement of users with the content sent by a company – by means of open rate and click rate – and the revenue they generate. Another factor that regularly weighs in is the “friction” created by a specific email, simply measured by the unsubscribe rate, i.e. the number of users who decide to opt out from an email database after receiving an email.
Following up on a recent post published on the topic of unsubscribe rates, and why they should be key in evaluating the performance of your email marketing campaigns in the long term, we will now look at the other KPIs you should be tracking in order to understand why your users opt out. This will subsequently help you optimize your campaign performance.
More insightful metrics
Realizing the frustration the unsubscribe paradigm could bring to fellow marketers, we decided to craft our own approach to the notion of churn and come up with our own, more insightful tracking metrics.
1. The “unsubscribe-to-open” rate
UTOR = # of users who unsubscribed / # of open emails
The “unsubscribe-to-open” rate (UTOR) measures the number of users who decided to leave your database, after having seen the content you shared with them. A high UTOR means that you’ve either sent irrelevant content or that your targeting was flawed. In most cases, it’s a bit of both.
2. The “unsubscribe-to-click” rate
UTCR = # of users who unsubscribed / # of email clicks
The “unsubscribe-to-click” rate is a great way to evaluate the relevance of the email content you’ve sent to your users compared to the landing page you are directing them to on your website. It is in other words, it measures the cost of driving traffic to your website.
3. The “$ per unsubscribe” metric
RPUn = sales in $ / # of users who unsubscribed
The “$ per unsubscribe” metric (or “Revenue Per Unsubscribe” or RPUn) measures how much revenue each campaign drives every time it leads 1 contact from your list to unsubscribe. It is a metric you will want to maximize.
A KPI for each occasion
Rightly assessing what each of those metrics can mean for your business can be key in optimizing the content and the targeting of the email campaigns you regularly send out to your users. Each of these measures responds to a specific business objective:
- The measure of the “unsubscribe-to-open” rate is essential if you are running a visibility campaign, building brand awareness, or launching a new product. A high UTOR tells you that users didn’t like what they saw and that you should take this into account in order to optimize your next campaign. In the table above, Campaign 2 is doing a way better job than Campaign 1 which has the same unsub rate.
- The “unsubscribe-to-click” rate is best used in the context of traffic generation when your primary objective is to drive users to your website, down your funnel, and have them purchase your product or service. In the table above, Campaign 3 is doing 2x better than Campaign 1. Again, the unsub rate indicates the opposite.
- The “$ per unsubscribe” metric focuses on revenue, but with a twist, enabling you to better assess the risks associated with a certain campaign.
Now that you’ve made it this far, will you add these 3 metrics to your reports?
Back to what matters 💸
At the end of the day, marketers will always be incentivized on the revenue they generate and every lost user will be one less user regularly spending money for your product or service.
In the final post in our series on unsubscribe rates, we will explore how you can calculate the lifetime value of your customers, and the actual cost of any of your customers, unsubscribed or acquired.
This way, you will be able to assess what you must lose in order to gain and manage risks more efficiently.