Measuring metrics and establishing marketing benchmarks are critical to improving performance and understanding return on investment (ROI). But over 47% of email marketers say that measuring performance is one of their top challenges (Source: Insider Intelligence Oct 27 2022, Ascends2 and OMI, “Email Marketing: New Research for the Enterprise Marketer”). Email marketing has lots of components and most marketers are unsure of what to do and how much benefit each option brings.
Benchmarking is an important discipline for marketers to assess their current performance and identify priority areas for improvement. One of the mistakes that many companies make is they focus too much on less meaningful tactical metrics:
- Determining the best metrics that are directly linked to a business model is key.
- Linking Key Performance Indicator (KPI) metrics to higher-level business outcomes allows analytics teams to create sensitivity impact models (where modellers can test the impact of changes in the benchmarks on outcomes like revenue or customer engagement).
- Businesses typically use benchmarks in several ways to compare themselves: to a published industry (sector) metric; to a competitor (peer); or to their own performance over a previous period (internal).
- Benchmarks provide a way to measure success relative to others and quantify gaps, whether positive or negative.
Finding the right match
To start, it is important to find a benchmark that accurately represents performance. When evaluating benchmarks, make sure you consider the credibility of the source, sample size, industry sectors, time period, and geographical region. Finding the most relevant benchmark for your business is sometimes like “peeling an onion one layer at a time”. Ideally it is best to peel to the right level of detail for your specific business. Once you’ve selected a benchmark, analyze any variances, and answer the questions “So What? Now What?”. It’s also important to put your performance versus the benchmarks in context.
But be cautious of blindly using an average as your default benchmark. Does your team want to be average? There is a wide variance in performance between the best-in-class companies and those marketers just treating email as a commodity vehicle to “batch and blast” or “pray and spray”. Gartner Research estimates that the top email performers (quintile 1) generate 2x-4x better results than the lowest tier (quintile 5). [Source: Gartner Digital IQ: Email Benchmarks 2021]
Note that email marketing is a highly sensitive medium where small changes and smart strategies can cause big variances in results.
2023 International Email Benchmark
For email practitioners, the good news is that there is a new comprehensive email benchmarking tool available and it’s free. The Global Data and Marketing Alliance (GDMA) created a benchmarking report based on 122 billion emails from 13 Email Service Providers (ESPs) who deployed over 3 million email campaigns for 28,000 companies across 69 countries.
The GDMA’s International Email Benchmark offers an Interactive Dashboard to conduct queries on multiple fields such as: industry, country/region and typical campaign size.
For example, the global benchmark for mixed retail (bricks and mortar and ecommerce) indicates the average campaign size was 53k in 2022. Retail sector open rates averaged 35.2% with a 3.7% Click Through Rate (CTR). But drilling down into the details highlights some interesting findings. Western Europe retailers mostly have similar email metrics to North American retailers. However, Western European retailers who deploy smaller campaigns of 5k-10k have a higher CTR of 4.3% (versus 2.5% in North America and 3.7% Globally). Are those retailers doing something different? Further drilling into the data, there is a big drop in CTR rates for campaigns over 250k in size. What’s the takeaway? It is probably due to either that large retail campaigns are less targeted and relevant, or the larger list has a higher proportion of “Never Actives”, which suppresses the CTR percentage.
The takeaway is that benchmark data creates accountability and prompts marketers to ask questions, probe their current situation and find insights.
Note: Over the last two decades, there has been an eclectic mix of email benchmark reports published. Some studies relied on self-reported survey responses (opinion) and others reported email sending data from a specific region or a single Email Service Provider (ESP). Different ESPs typically cater to different sized clients. Economy ESPs (Mail Chimp, Constant Contact) focus on SMEs while the large vendors (Acoustic, Salesforce, Oracle, Adobe) report on larger enterprise senders. The GDMA is based on raw aggregated global data from a cross-section of 13 ESPs across 69 countries.
Author – Geoff Linton
Based in Canada, Geoff is an email industry veteran and former marketing professor. He founded a leading email agency called Inbox Marketer in 2002 which he sold to Trendline Interactive in 2019. He currently is President of Tekside.io, which is a Marketing Services Provider and Systems Integrator. Tekside.io specializes in intelligent email for clients across North America. Geoff is also the Co-Chair of the MarTech Council for the Canadian Marketing Association and is a representative on the GDMA International Email Benchmarking initiative. Geoff is passionate about benchmarking results and capabilities across various marketing disciplines.