There’s an old adage that goes, “You can’t manage what you can’t measure”. In the email space you’ll often hear the pundits and pros give advice on measuring this, that, or the other thing. What they don’t always share are the formulas that help you measure your different metrics.
So today I’d like to help by sharing some of the basic calculations, and as an added bonus for playing along, I’ll even share with you some of my basic reporting templates.
Let’s get started….
First let’s look at the projected amount of messages delivered. There is a difference between delivery and deliverability. Delivery, or “delivered” is basically the amount of messages that you send less the number of bounced messages.
Sent – Bounced = Projected Messages Delivered
“Deliverability” is the estimated amount that makes it to the recipient’s Inbox and is calculated as a rate or percentage. You’re not going to get a deliverability metric from your ESP or in-house tool, that data is going to come from a 3rd party monitoring service, like ReturnPath or Pivotal Veracity. While your ESP may partner with these monitoring tools, they will usually not be plugged into your basic ESP reporting.
Deliverability tools don’t know how many records you sent your message to, only how many make it to the Inbox, how many make it to the Junk/Spam folder, and how many get “black-holed”. To measure your delivery rate for a given campaign you will need the number of records sent, the number of records bounced, and the 3rd party delivery metric as a decimal number.
(Sent – Bounced) X 3rd Party Deliverability = Estimated Messages Delivered
So if we sent a message to 153,482 records, and 737 bounce, and our deliverability monitoring service shows that 88% of messages made it to the Inbox, our calculation would look something like:
(153,482 – 737) X .88 = 134,416
Calculating percentage of bounced messages is pretty straightforward:
Bounced / Sent = Bounce Rate (Percentage Bounced)
Most ESPs still report an “Opened” message when a tracking pixel is rendered in the message body. Because the term “Render” is more descriptive of what is taking place when a tracking pixel is rendered (there’s that word again) by the recipient when message images are on, I’ll use the term Rendered instead of the term, “Opened”. I’m also going to work with the total renders rather than unique. If unique is more to your liking, just substitute….
Render / (Sent – Bounced) = Render Rate (By Projected Delivered)
This second formula includes the calculations for those using 3rd party deliverability tools that want to include deliverability metrics into their measurement.
Render / ((Sent – Bounced) x 3rd Party Deliverability) = Render Rate (By Estimated Delivered))
Now let’s move on to “clicks” and look at those numbers a couple of different ways. Again, I’m using total number of clicks to a message. To calculate your click rate the base formula is:
Clicked / Metric = Click Rate
So by total number Sent:
Clicked / Sent = Click Rate by Sent
By Projected Delivered:
Clicked / (Sent – Bounced) = Click Rate by Projected Delivered
By Estimated Delivered:
Clicked / ((Sent – Bounced) X 3rd Party Deliverability) = Click Rate by Estimated Delivered
Clicked / Rendered = Click Rate by Rendered
[A quick disclaimer: “Projected Delivered” isn’t an “official term” within the email marketing lexicon, but I needed to call it something…. same with “Estimated Delivered”….]
Now that we have the basics down, let’s look at the money. Revenue is the amount of money that is generated by and/or attributed to a campaign. For our purposes here Gross Profit is Revenue less product, production, and deployment costs.
Our Revenue calculations will look like:
Revenue / Sent = Revenue per Sent
Revenue / (Sent – Bounced) = Revenue per Projected Delivered
Revenue / ((Sent – Bounced) X 3rd Party Deliverability) = Revenue per Estimated Delivered
Revenue / Rendered = Revenue per Rendered
Revenue / Clicked = Revenue per Click
And Profit calculations will look like:
(Revenue – Product Cost – Deployment Cost) / Sent = Gross Profit per Sent
(Revenue – Product Cost – Deployment Cost) / (Sent – Bounced) = Gross Profit per Projected Delivered
(Revenue – Product Cost – Deployment Cost) / ((Sent – Bounced) X 3rd Party Deliverability) = Gross Profit per Estimated Delivered
(Revenue – Product Cost – Deployment Cost) / Rendered = Gross Profit per Rendered
(Revenue – Product Cost – Deployment Cost)/ Clicked = Gross Profit per Click
All but the 3rd Party Deliverability calculations can be found in my a handy-dandy Reporting Template that you can download here. The .ZIP find contains some basic instructions and B2C & B2B Reporting Templates. Both Reporting Templates contained in the .ZIP run a macro that links each sheet in the workbook to an Index page for tab navigation.
The templates will aggregate static and recurring campaign statistics monthly, and load them into “Dashboard” charts that let you quickly glance at month-over-month performance. There are some other calculations that include measurement of ECPM (Effective CPM), amount of residual campaign revenue (really want to know your message shelf-life?), subscriber retention, and some others that I can’t think of right now.
There was a sharp data analyst once that applied a version of this template for projecting forward – I’d never thought of that (Props, Billie!).
Download it and play with it, and if you don’t like it, well, I’ll give you your money back….