with the same unchanging budget
For many email marketing managers it’s the scale for success: the number of newsletter recipients who turn into customers. As a newsletter sender, you’ll know the proportion of recipients who buy products after receiving your email by looking at the business key figure called conversion rate. This in turn answers two of your most important questions: Did the newsletter address the group of recipients correctly? Does the newsletter help in developing your sales?
While the conversion rate should be as high as possible, for the key figures called unsubscribe rate and bounce rate, the reverse applies understandably: The lower the better! These two key performance indicators (short: KPIs) also help planning your next campaigns better and better – and thus to getting more out of your annual email marketing budget.
In this article, we examine the reasons for a low conversion rate or a high unsubscribe rate – and how you as the sender of newsletters can have a positive influence on these key figures.
The conversion rate
The conversion rate doesn’t always have to be connected to sales and revenue. All these actions can be useful conversions:
- Ordering/ purchasing an item from the online shop
- Downloading a software or whitepaper
- A new newsletter subscription
- Creating a customer account
- Sending a contact or offer inquiry
In email marketing, the conversion rate refers to the click rate. The click rate refers to the open rate. Both of these figures are explained here in detail.
What the conversion rate tells you
What is a good conversion result? The answer depends on your industry and market segment. Customers are more likely to spontaneously go for affordable clothes with free delivery and 30 days exchange option than an exclusive designer furniture shop that only offers paid overnight delivery.
Are you dissatisfied with the conversion rate of your activities?
- A low conversion rate means:
The offer is not suitable for the customer. Why? Has all the important information for the target group been included in your newsletter? Did the offer/discount fit the circumstances of your customers?
- In addition, a look at the click rate reveals additional information:
- A high click rate with low/no conversion shows: Interest in a product or service was certainly there, but the offer might have been perceived as too expensive.
An A/B test provides clarity. To find out whether your low click rate is due to the price, it’s best to work with offers with different discount codes.
- The combination low click rate and low/now conversion indicates that the needs of your target group have probably been missed. Perhaps the composition of the target group is different than expected.
Here, a customer survey can provide important insights to obtain an up-to-date customer profile.
- The combination of a high click rate and an average conversion value suggests that the offer is currently not suitable for the customer. To improve this, you can create segments or tags (keywords) in the customer profiles or update them.
For example, an online shop for baby and children’s clothing segments their newsletters so parents receive offers based on age and gender of their child. Make sure that these mails are always adapted to the customer’s lifecycle!
It’s also possible that the newsletter was sent at an undesirable time during the week. The best time to send out email campaigns – across all industries – is Monday, according to a study that included around one billion emails; the highest average percentage of all opens is recorded on that day! However: people most often click on the links in this email on Saturdays. Many people like to gather information at the beginning of the week, but only deal with it more extensively at the weekend.
These data are for orientation. Opening times can vary depending on the industry and target group. In this case, we recommend working with A/B tests to determine the perfect delivery time.
What you can do:
- Positively highlight the message contained in your mailings
- Optimize delivery time
- offer better and better content that is always helpful for the target group in the long run
Other success-critical key figures for sending newsletters
Our reports to you, our customers, contain further key figures which we want to describe in more detail here.
The unsubscribe rate
In Germany, it’s easy for recipients of advertising emails to unsubscribe, as the incorporation of an unsubscribe link in the newsletter is prescribed by law. This makes sense for you as a sender: Without an unsubscribe link, recipients would have to write you an email to unsubscribe. This would lead to loads of recipients simply marking your newsletters as spam because that’s just so much easier and faster. In this case the unsubscribe rate would remain low– but in the long run, this would lead to a bad reputation for you as a sender.
There are many reasons for unsubscribes:
- Your emails are too frequent
Check if a lower delivery frequency influences your unsubscribe rate positively. Otherwise, the unsubscribe rate will remain high.
- You have fallen victim to a “getting rid of all newsletters I don’t necessarily need action”.
In this case, too, the content and offers do not suit the target group, or it was just one of those occasions that invite people to reorganize their lives, such as the beginning of the year or the beginning of the month.
- The newsletter’s content is irrelevant or products are no longer interesting
Customers are primarily people whose interests and needs change. Partly because of events during the Customer Journey.
Imagine you are looking for a new apartment and have therefore subscribed to the newsletter of a real estate portal. After you have signed a new rental agreement, you don’t need the real estate offers any longer and unsubscribe from their newsletter.
Or: You are a dentist and one of your top achievements is professional dental cleaning. Increasingly, however, your newsletter has an increasingly high unsubscribe rate. Find out why: Maybe patients, who come to the dental cleaning service regularly anyway, don’t want to be “flooded” with advertising for exactly this service? Instead, it would be more relevant for these people to receive newsletters about the correct brushing technique or which electric toothbrush you recommend as a dentist – including information about your individual toothbrush consultation. New customers, on the other hand, continue to be well advised with information about your professional dental cleaning – so, it’s also worth for the dentist to divide their customers into segments or customizing and creating mailing campaigns.
The bounce rate
A bounce is a mail that is returned by the recipient’s mail server as “undeliverable”. Too many bounces have a negative influence on your reputation as a sender. As a rule of thumb, the bounce rate should be below 5%.
There are two kinds of bounces: A soft bounce is a message that has made it to the recipient’s mail server, but not beyond; it occurs when there’s a full mailbox, an overloaded server, or a message that is too large. A hard bounce is a mailing that can’t be delivered at all. Either the email address no longer exists or the sender mail server is blocked. Since too many bounces are a bad signal for your sender’s reputation, make sure you maintain your email distribution list and throw out old addresses. Double-Opt-In additionally increases the quality of your newsletter subscriptions.
How to achieve better results without changing the budget:
These examples show: The reactions of the recipients help to determine which measures make sense for your email marketing in the future – and also how even small changes can affect the success of your campaign and thus the budget. It makes sense to check your email strategy from time to time and to think of the following questions, for example:
- Should I send more or fewer emails?
Not only in fashion, less is sometimes more – a too high frequency of newsletters can lead to more unsubscribes. Find out by taking an A/B test and, if necessary, reduce the frequency of your emails.
- Is my segmentation beneficial for the customer and profitable for myself?
Send your recipients content tailored to their preferences. That sounds more elaborate than it is. Create personalized newsletters easily and fast with CleverReach– and THEA , our easy Automation tool.
- Should I send my newsletters on another day of the week and/or at a different time?
The following also applies here: Find out by running an A/B test. You can also investigate other questions about preferences and habits.
- Is it possible to save a lot of time and personnel with email automation?
In most cases, this can be answered with a clear “yes”. Of course it takes some time and work to create automated email campaigns – but once created you’ll save a great deal of time.
The answers to these questions will help improve the results of email marketing campaigns. Because each of the key figures discussed in this article influences the result of your budget.
Evaluate the findings from your reporting, optimize your key figures and get more customers who buy more frequently and buy more often and thus increase the conversion rate!
Use your control options – it’s worth it!