Email marketing continues to reign supreme as one of the most cost-effective and profitable channels for businesses of all sizes. According to a 2020 report by Litmus, email generates $42 for every $1 spent, providing an astounding 4,200% return on investment.
However, with the average office worker receiving 121 emails per day, cutting through the noise and driving real results with email is easier said than done. That‘s where tracking your email conversion rate comes in.
In this comprehensive guide, we‘ll break down exactly what email conversion rate is, why it‘s a critical metric to measure, and how to calculate it step by step. We‘ll also share proven strategies for optimizing your emails to boost conversions and generate more revenue for your business.
Defining Email Conversion Rate
Before we dive into the nitty gritty of calculating email conversion rate, let‘s make sure we‘re on the same page about what this metric actually measures.
Email conversion rate is the percentage of recipients who completed a desired action after opening your email. That desired action is typically a key step towards becoming a customer, such as:
- Making a purchase
- Filling out a lead generation form
- Registering for a webinar or event
- Downloading a whitepaper or other gated content
- Starting a free trial
- Booking a sales call
Essentially, a "conversion" is any measurable action that a user takes to move further down your marketing and sales funnel. The definition of a conversion will vary depending on your specific business model and campaign goals.
The Importance of Email Conversion Rate
You might be wondering, "Do I really need to track email conversion rate? Isn‘t open rate or click-through rate enough?"
While open rate and click-through rate are important top-of-funnel metrics, they don‘t give you the full picture of email campaign performance. Here‘s why conversion rate is the metric that matters most:
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It proves the ROI of your email efforts. Conversion rate ties email opens and clicks directly to bottom-line results like leads generated and revenue earned. By tracking conversion rate, you can definitively prove the value of email in driving business growth.
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It helps you optimize for the metrics that matter. Vanity metrics like open rate and click-through rate can be easy to inflate with tricks like clickbait subject lines or misleading CTAs. But conversion rate keeps you honest and focused on what really counts: turning subscribers into paying customers.
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It enables better personalization and segmentation. Tracking which types of content and offers drive the most conversions helps you create hyper-targeted campaigns for different audience segments. You can double down on what‘s working and scrap what‘s not to create more relevant, high-converting emails.
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It identifies gaps in the customer journey. A low email conversion rate can signal issues with your website experience, product/market fit, or sales process. Analyzing your email conversion funnel can reveal key areas for improvement beyond the inbox.
How to Calculate Email Conversion Rate
Now that you understand the importance of email conversion rate, let‘s walk through exactly how to calculate it.
The formula for email conversion rate is:
Email Conversion Rate = (Number of Conversions / Number of Delivered Emails) X 100
Here‘s a breakdown of each component:
- Number of Conversions: The total number of recipients who took your desired action (e.g. made a purchase or filled out a form) after clicking through your email
- Number of Delivered Emails: The total number of emails that landed in recipients‘ inboxes, excluding bounces, unsubscribes, and emails marked as spam
For example, let‘s say you send a promotional email to 5,000 subscribers. After removing bounces and unsubscribes, 4,500 emails are successfully delivered. From those delivered emails, you get 500 clicks to your product page and 25 purchases.
To calculate your email conversion rate, plug those numbers into the formula:
(25 Purchases / 4,500 Delivered) X 100 = 0.56%
So in this case, your email campaign achieved a conversion rate of 0.56%.
Email Conversion Rate Benchmarks by Industry
Of course, a single campaign‘s conversion rate doesn‘t tell you much in a vacuum. To truly gauge your email performance, you need to benchmark your metrics against your own historical averages as well as industry standards.
Below are some average email conversion rates by industry, based on data from a 2022 report by GetResponse:
| Industry | Conversion Rate |
|---|---|
| Education | 3.34% |
| Retail & Ecommerce | 2.18% |
| Real Estate | 2.06% |
| Health & Beauty | 1.48% |
| Online Advertising | 1.35% |
| Financial Services | 1.17% |
| Software & SaaS | 1.04% |
| Travel & Hospitality | 1.00% |
| Publishing & Media | 0.74% |
As you can see, average conversion rates range quite a bit across sectors, from over 3% for the Education industry to under 1% for Publishing & Media.
However, it‘s important to take these benchmarks with a grain of salt, as your business‘s unique product, audience, and goals will heavily influence your results. Whats considered a "good" conversion rate will also depend on the type of conversion you‘re measuring (i.e. purchases vs. form fills).
Tips to Improve Email Conversion Rate
Want to achieve conversion rates that leave your industry benchmarks in the dust? Here are some expert tips for optimizing every element of your email campaigns:
1. Write Irresistible Subject Lines
Your subject line is like the headline of a blog post or the storefront of a retail shop. Its job is to catch the eye and entice the reader to go deeper.
Data from a WiseStamp analysis of over 1 billion emails found that subject lines between 5-8 words had the highest conversion rates. Some proven subject line formulas include:
- Posing an intriguing question
- Leading with a shocking statistic
- Offering an exclusive discount or bonus
- Creating a sense of urgency
- Personalizing with the recipient‘s name or interests
2. Segment Your Email List
Not all subscribers are created equal. A one-size-fits-all approach to email will only take you so far.
Segmenting your list based on factors like demographics, purchase history, and email engagement allows you to tailor your messaging for maximum impact. In fact, a study by Mailchimp found that segmented campaigns have 14.31% higher open rates and 100.95% higher click-through rates than non-segmented campaigns.
Some high-impact ways to segment your list include:
- Demographics: Segment by age, gender, location, job title, etc. to tailor content to specific audience personas
- Buyer Journey Stage: Send different types of content to subscribers who are new leads vs. those who are ready to buy
- Purchase History: Cross-sell or upsell customers based on their past purchases
- Email Engagement: Create special offers or "win back" campaigns for inactive subscribers
3. Craft Scannable, Mobile-Friendly Designs
Over 61% of email opens now happen on mobile devices. If your emails aren‘t optimized for mobile screens, you‘re basically leaving money on the table.
To create mobile-friendly emails that drive conversions, focus on:
- Using a single-column layout that scales well on small screens
- Keeping copy concise and scannable with short paragraphs, bullet points, and plenty of white space
- Placing your main call-to-action (CTA) button above the fold
- Using large, touch-friendly CTA buttons (at least 44×44 pixels)
- Compressing images to reduce load time on mobile connections
- Testing your emails on multiple devices and email clients
4. Personalize With Dynamic Content
Personalized emails deliver 6x higher transaction rates than generic emails. But personalization doesn‘t just mean using the recipient‘s first name.
With dynamic content, you can swap out entire sections of email content based on a subscriber‘s preferences, behaviors, or demographics. For example, you could display different product recommendations or offers based on a subscriber‘s browsing history or geographic location.
Other opportunities for personalization include:
- Referencing a subscriber‘s past purchases or interactions with your brand
- Customizing email copy, images, or CTAs based on buyer persona
- Adding a personal touch from an individual sales rep or account manager
- Sending birthday or anniversary emails with special discounts
- Creating post-purchase nurture sequences based on the specific product bought
5. Always Be A/B Testing
Even the most experienced email marketers can‘t predict with 100% accuracy what will resonate with their audience. The only way to know for sure is to test.
A/B testing (or split testing) is the process of sending two slightly different versions of an email to a small portion of your list and seeing which one performs better. Once you have a winner, you send that version to the rest of your list.
Virtually every element of an email can be A/B tested, but some of the highest-impact tests include:
- Subject line
- Sender name or "from" address
- Preview text
- CTA copy or design
- Hero image or video
- Layout and design
- Offer or discount
- Personalization elements
- Tone and messaging
- Send day/time
The key to effective A/B testing is to test one variable at a time, so you can isolate exactly what contributed to the change in performance.
6. Leverage AI-Powered Optimization
Artificial intelligence and machine learning have the power to take your email conversion rates to new heights. By analyzing millions of data points across your campaigns, AI tools can:
- Predict the best subject lines and email content for each individual subscriber
- Personalize send times based on each subscriber‘s previous email behavior
- Automatically segment audiences based on engagement patterns
- A/B test multiple email elements simultaneously and efficiently
- Provide intelligent recommendations for improving deliverability and engagement
Tools like Phrasee, Seventh Sense, and Optimail use natural language processing and neural networks to augment human email strategy and achieve superhuman conversion rates.
Key Takeaways for Calculating Email Conversion Rate
We covered a lot of ground in this guide, so let‘s recap the most important points:
- Email conversion rate measures the percentage of subscribers who took a desired action (like making a purchase) after opening your email
- Conversion rate is the ultimate metric for proving email marketing ROI and optimizing campaign performance
- To calculate email conversion rate, divide the number of conversions by the number of delivered emails and multiply by 100
- Average email conversion rates range from 0.5% to 3%+ depending on the industry and conversion type
- To improve email conversion rates, focus on crafting compelling subject lines, segmenting your audience, designing mobile-friendly templates, personalizing with dynamic content, A/B testing, and leveraging AI optimization
- Even small increases in email conversion rate can have an outsized impact on your brand‘s revenue and growth
By putting these tips into action and continuously monitoring your email conversion rate, you‘ll be well on your way to building an email marketing machine that drives serious business results.
Remember, email marketing is both an art and a science. It takes a combination of creativity, data analysis, and technological savvy to hit your conversion rate goals.
But with the right strategy and tools, you can create email campaigns that not only captivate your subscribers but also drive them to take profitable action. So get out there and start optimizing for conversions!
