What is Email Marketing? How It Works and Key Performance Indicators (KPIs)

HomeMarketingWhat is Email Marketing? How It Works and Key Performance Indicators (KPIs)

It is a known fact that there are more email users than any other social platform including Facebook, so email marketing is a crucial aspect of digital marketing that every business or organisation must be acquainted with. 

There are over 4.5 billion users of email across the world, email marketing has the highest ROI and even though social media marketing has become popular today, it doesn’t change the effectiveness of email marketing. 

Therefore, if you want to drive sales and revenue for your business, you may have questions like what is email marketing and how it works. This detailed guide will show you everything you need to know.  

What is Email Marketing?

Email marketing is the use of email to communicate and connect with people. It is a very effective strategy for businesses to engage their customers and prospective customers. Email marketing can inform customers, promote specific products and services, and enhance brand awareness. 

There are different types of email marketing campaigns you can utilise for your business; they include:

  • Welcome emails.
  • Promotional emails.
  • Email newsletters.
  • Feedback or survey emails.
  • Lead nurturing emails or re-engagement emails.
  • Milestone emails.
  • Transactional emails, such as confirmation emails or password reset notices. 

How Does Email Marketing Work

Email marketing works by delivering emails to subscribers who signed up to receive emails from businesses or brands. Email marketing has always been very effective and, in fact, one of the top-performing marketing strategies for businesses; it is easily automated and provides a personalised relationship with your audience. 

Email marketing requires these 3 essential elements:

An Email List

With email marketing, you can send emails to people who have subscribed to it, so your email list contains the addresses of your email subscribers, and only those on your list will receive your emails. 

An Email Service Provider (ESP)

An email services provider or software is a platform that helps you manage your email list and sends emails to your subscribers. It can help automate your email marketing tasks and design your marketing campaigns. 

Clearly Defined Goals

To effectively use email marketing, you need to set clear goals that you aim to achieve with your marketing strategy. These goals may be to:

  • Enhance brand awareness.
  • Drive sales.
  • Keep customers engaged.
  • Generate and nurture leads.
  • Increase customer loyalty and lifetime value.

When you have your email list, a preferred email service provider, and your goals, you are good to go. The first step is to segment your email list based on the message you want to send to each group. Then, create an account with a reliable email service provider like Segnivo, create your email, and use the ESP to send the email. You can also monitor your campaigns with the available key performance indicators(KPIs).

Key Performance Indicators (KPIs)

Email marketing offers the most transparent form of marketing where businesses can easily track the success of their campaign and know what their subscribers are more interested in. The metrics used to track the success of an email marketing campaign are called key performance indicators (KPIs); here are the common ones used in most email marketing platforms.

Click-through Rate

The click-through rate is the percentage of email subscribers who receive and click on the links in your email. To get the click-through rate, divide the total clicks by the number of emails delivered and multiply it by 100.

Open Rate 

This is the percentage of email subscribers who received and opened your email. To calculate this, you will divide the number of opened emails by the total number of people who received the email. Then multiply your result by 100.

Conversion Rate 

If a recipient has read through your email and clicked on your link, the next expected thing is that they will convert on your offer, become your client or customer, or follow the action you ask them to take in your email. So, the conversion is the percentage of subscribers that receive your emails, click on your links, and complete your desired action. 

To calculate this, you will divide the number of people who completed your desired action by the number of people who received your email, then multiply your result by 100.

Overall ROI

This is the overall return on investment for your email campaigns; it is the profit you get from your business due to your email marketing campaign. It is calculated by dividing the total revenue generated by the amount spent on the campaign. Then multiply your result by 100.

List Growth Rate

Your list growth rate is the rate at which you gain subscribers for your email marketing campaign; it is essential to monitor the rate at which your email list grows so you can reach a wider audience. 

To calculate this, add the number of unsubscribers to the number of email spam complaints, subtract your answer from the number of new subscribers. Then divide your result by the total number of email subscribers on your list, and multiply it by 100. 

Unsubscribe Rate 

This is the percentage of people or the rate at which people unsubscribe from your email campaigns, which means you can no longer send them emails. This can happen when people are not interested in your emails anymore or when you send too many emails and start to spam them. You can also remove inactive subscribers yourself. 

To calculate this, divide the number of unsubscribed users by the number of recipients and multiply it by 100. 

See also: How to Create a Content Marketing Strategy for Your Business

Email marketing can be very advantageous for businesses and organisations; it is better than every other marketing channel you can think of. First, it is permission-based, which means your audience must have had a slight interest in your business before signing up for your email list. It is more personalised since you will have direct access to your audience, and then email marketing offers you more control. You can measure your results, choose who will receive your emails, and so on. You will be on top of every marketing activity. 

So you can see that email marketing has many benefits; however, one of the most important things you must get right is using a reliable email service provider, and we at Segnivo can give you the best experience even if you are an absolute beginner, so visit Segnivo to get started with your email marketing campaign today. 


Social Media VS. Email Marketing: Which is More Effective?

Social media has grown over the years and is very popular now; it is an essential channel for marketing. However, email marketing is still 40 times more effective than social media marketing because email has a more extensive user base. Everyone who has used the internet most likely has an email, but not all are on social media. 

What Makes Email Marketing so Effective

Email marketing can generate quick results by allowing you to assess your audience directly and go directly to your call to action. Also, it is customisable, permission-based, measurable, and can reach a wider audience.

How can I Ensure That my Emails Consistently Reach the Target Audience?

Email marketing is effective, but you must also apply some good strategies to get your desired results; these few tips will be of help:

  • Use a reputable email service provider.
  • Build a quality email list with opt-in subscriptions.
  • Optimise subject lines and email formatting.
  • Avoid spam triggers by crafting relevant and personalised content.
  • Regularly remove inactive addresses or bounced addresses.

Related Content