Secret #6:  Track Your Results

Respect the four magic TLAs (Three Letter Acronyms)

If I ask you to, "Go from here to there," you won't be able to do it unless you know where "here" and "there" are. Knowing whether your email campaign worked is exactly the same. You need to know where you're starting from, track what happens when you email, and gauge where you end up in order to know whether you were successful, or failed. For every campaign, I always track these Four Magic TLAs:

1. CTR: Click-Through Rate. CTR is calculated as the percentage of people who respond to your email by clicking though to your site. This is the first gauge of whether your campaign lives or dies. You must measure both the overall response to your mailing and also look at sub-sets of data, list-by-list and link-by-link in your email letter.  I give each link in the letter a unique URL and track every unique click through a mail server. I want to know which part of the email attracted the most response. I will frequently test multiple offers or upsells this way to quickly determine the best mix of offer, creative and list for any campaign. One factor I never waste time with is "Open Rate". It's a useless, misleading and entirely unrealistic email campaign performance gauge. Don't ever fall for it as a success measure and don't even bother tracking it. Many tracking systems count an email as allegedly opened, when all that really happened is the recipient's email client had the preview pane open and the email flashed for a split second on its way to the deleted folder. No one really saw it in that case.

2. CTB: Click-to-Buy. CTB is calculated as the percentage of people who convert to customers from among those who clicked through to your site. This is the all-important revenue gauge. It requires accurate tracking of clicks from the email to actual sales at the website. I also look at CTB over time. I can conclude from the time study whether an email campaign had an overall influence on sales. People often investigate on the first few visits before they finally purchase. After the initial visit, most returns come directly to your website and not through the email link. Therefore, it would adversely skew the effectiveness analysis of the email campaign if you don't take that behavior into account.

3. AOV: Average Order Value. AOV is calculated as the amount customers buy on their average order with each visit to your site. This gauge measures whether the customers you're acquiring are spending appropriately, or just grabbing your free offer and running. Current customers usually produce the highest AOV. First time buyers typically purchase less. The Internet industry average first-time purchase is $25 or less. What I want to see is whether newly acquired customers ramp up to higher AOV quickly and maintain that level every time I email them. This gauge is an important measure of list atrophy, website selling power and much more.

4. LCV: Lifetime Customer Value. LCV is calculated as the product of AOV over time. This gauge tells you whether customers are loyal and how often they return for repeat purchases. It also sets a value on customer acquisition that is fundamental to email campaign budgeting and build pro forma (before the fact) revenue models.

But wait, there's more

The chart below shows you a winning long copy test that was tracked by click-through on each separate link in the email. It has the characteristic "triple-hump" response curve that I typically see in my long copy emails. The important thing to notice is that over 25% of the response came through AFTER the first five email links. Most inexperienced email marketers, who don't appreciate the power of long copy, stop short after just one or two links. If this campaign had followed that common wisdom, it would have thrown away a large portion of its potential response. As it was, the mailing pulled in a 20% click-through rate, 18% click-to-buy ratio and generated average order values in excess of $60.

The pink bars show The Hot Zone where most of the response comes in. The green bars show The Pick-up Zone where we picked up an additional 25% of the response. The blue bars show The End Zone where I usually put links to an additional offer sweetener that was promised early in the copy. I can gauge the strength of an offer by the ratio between The Hot Zone and End Zone offer links. So, long copy costs not one penny more yet it always gives more of just about everything:  response, sales, order value, customer acquisition and loyalty.