Email conversion rates are the essential measuring stick of how effective your email marketing efforts really are. But, many do it yourself email marketing people have not figured out how to use email conversion rates to improve their effectiveness.

Email Conversion Rates: What You Will Learn

Email conversion rates tell you how much are your email newsletter subscribers are worth in dollars. Once you know how much your email newsletter subscribers are worth to you you also know how much you can spend to acquire more.

Most email services or off-the-shelf software solutions allow users to track open and click rates. Knowing how many opens and clicks your email promotion generated is “good to have” but knowing your conversion rate is “must have”. Your most important tracking metric for email promotions is actually your conversion rate. This conversion rate can only be determined by tracking the visitors activity on your actual website pages.

Most of us are not sending out emails for the fun of it. No, we send out emails with the intent of getting the recipients to perform a specific action or set of actions. These desired actions lead toward what is commonly called a goal or a conversion. Examples might include: making a purchase, registering for a seminar, contacting a sales rep for a quote, downloading collateral material and so forth.

Use your web analytics package to track email conversions

To track what your email subscribers do once they get to your website you must add information to the links you put in the emails you send. This information works with your web analytics package to track what your email subscribers are doing on your site.

Let’s take a look at how this is done using Google Analytics, a very popular (and free) web analytics tool.

Here is an example of your link without tracking:
http://www.yourdomain/landing-page.html

Here is what your link would look like with the added tracking tags:
http://www.yourdomain.com/landing-page.html?utm_source=newsletter&utm_medium=email&utm_campaign=july__09

Google Analytics gives you a total of 5 parameters for tracking activity on your website (we are only using three in the above example). See chart below with example values:

When you add these parameters to the links in your outgoing email newsletters and promotions you will be able to use the Google Analytics package to see how much of the traffic to your site is coming from your emails. Plus, you will see how successful you are at getting that email generated traffic to make additional purchases, request quotes, download collateral material or perhaps some other goal unique to your site.

Email conversion Rates: Determine Dollar Value Of Subscribers

Knowing your email conversion rate tells you how much your email subscribers are worth to you in real terms. And once you know how much your email subscribers are worth you also know how much you can afford to spend trying to get new subscribers.

Here’s an example of how to calculate your email conversion rate:

Now let’s determine the dollar value of your email subscribers. Say your average profit on each conversion was $150. This would give you a total profit of $1,500 for the entire email promotion.

If you then divide you total profit by the number of emails sent you know your profit per subscriber is $1.50.

If each email subscriber is worth $1.50 to you then you know how much you can afford to spend advertising in order to get more email subscribers.

For example: if you spend $500 on advertising to get more email subscribers you would need to get a minimum of 333 subscribers for your advertising to be successful. Anything less than 333 and you are losing money.

To get that target of 333 new subscribers simply divide 500 by 1.50.

When you use your email conversion rate to determine your subscriber value you have opened up a whole new world of marketing opportunities.

Other resource articles you should read:

• Email Segmentation Strategy
• Falling Email Marketing Response Rates