15 min read
If you’re a new blogger, you’re most likely a one (wo)man show and need to find the most cost, work, and time efficient way to handle your business. This will involve a lot of prioritizing and constantly reviewing your data to make sure you’re hitting your goals as well as creating the best processes you can. Sometimes that will mean reevaluating the tools and systems you’ve put in place to grow your business.
As you’re working to create a living online with your products or services, you need to know the economic value of everything you do. Afterall, if you’re spending your budget on a tool, you need to make sure it’s performing well. If it’s not, it’s time to get rid of it.
Whenever you take the time to reevaluate your tools and systems, ask yourself these three questions:
There’s a concept called Jobs to Be Done that originated in the ‘90s at Harvard Business School. The basic premise of the concept is that people “hire and fire” products to do a job for them. For example, you can “hire” a new cake pan to bake your friend’s birthday cake, but if the cake bakes unevenly or the batter leaks out the sides while in the oven, you’re probably going to immediately “fire” that cake pan. You saw that it wasn’t going to do the job you bought it for and therefore you got rid of it.
You can apply this same Jobs to Be Done principle to your reevaluation process. Today, let’s apply this to email marketing. So go ahead and ask yourself those three questions:
In general, email marketing helps you reach a bigger audience and increase your revenue. If that’s true, you need a system in place to show if that’s actually happening– to know if your email marketing is doing its job.
Sure you can get a decent feel of the overall effect of your emails from the amount and quality of any Reply to’s you receive, but that’s not helping you see the real details when it comes to ROI. To truly test, know, and understand the value your email marketing is creating for your business, you need to see how each email is performing. To do this, you need to set up email analytics.
Analytics for your email marketing helps you track what occurs once your visitor has clicked through from your email to your blog. Also called ‘”beyond the click” tracking, the data you collect with email analytics shows the journey your subscriber takes after they’ve clicked a link in your email.
Do they download an incentive? Do they read 10 blog posts? Do they ask for a demo? Do they buy a product? By setting up email analytics, you’ll be able to answer these questions and find out if your email marketing is getting its job done. You’ll also be able to:
I know analytics can seem like an advanced and complicated system, but it doesn’t have to be.
Setting up an analytics system to measure the ROI of your email marketing should lead to a couple of key insights into your business, but the ultimate goal is to understand how many new customers you get from your email marketing efforts.
Once you learn the process for tracking ROI on your email marketing efforts, you should be able to apply a similar process to your other marketing efforts like social media, guest posting, Facebook ads, and other marketing channels you’re using to grow your business.
There are five steps to measure the effectiveness of your email marketing:
Before we move on, if I could embed in your brain just one takeaway from this entire post, it would be this: analytics are only as important as the decisions they allow you to make with confidence. If your analytics aren't helping you make better decisions, then they’re just wasting your time. Now let’s jump in.
First things first, before you worry at all about any kind of analytics, you need to keep one very important thing in mind: if you don’t yet have a product or service for sale, then any metrics you measure are purely vanity metrics.
Because they can’t lead to revenue of any kind, your metrics will simply give you a bunch of hypotheses before you have something for sale. There is no way to know whether your readers and subscribers are interested enough in what you do to become customers unless you give them a chance to become customers. So hold your metrics loosely before you have something for sale, will ya?
If you’re deciding how to spend your time in your business and you have an option of setting up analytics or making a product for sale, hands down you should make a product. For the rest of this post, we’ll assume you already have a way to make money in your business.
We could have a philosophical debate over which of the many metrics tracking software options are the best or we could just be real: for at least 80% of bloggers, you’ll never need anything other than Google Analytics to understand what’s going on with your business.
Don’t research alternatives, just use Google’s free tool and learn how to use it well. If you know it so well that you find that it can’t do something you need it to do some day, then go research alternatives. Until then, it works (we use it at ConvertKit!) and it’s powerful.
Here are instructions on how to install Google Analytics on your site. And if you really want to nerd out on analytics, here’s a link to the Google Analytics Academy. It’s not the most entertaining thing you’ll ever watch, but it’ll help you build expertise if you want it. (Don’t get lost in a rabbit hole — remember that analytics are only as important as the decisions they allow you to make with confidence.)
In order to assign a value to your email marketing, you have to set up a goal in Google Analytics. Setting up a goal allows you to tell Google Analytics how it should know that someone has purchased a product of yours and how much they paid for that product.
Here’s how you do that as of April 2017. We’ll update this post regularly to make sure our tutorial is in line with Google Analytics’ user interface.
When you’re logged into your Google Analytics account, navigate to the admin panel, which should be in the bottom left of your screen.
Now find the Goals Panel under the View column on the far right. Click there.
First, click on “+ New Goal.” That will take you to a screen where you can tell Google Analytics what kind of goal you want to set.
Now choose the “Place an Order” pre-filled configuration. This goal will make it easy to tell Google that you’re tracking a person becoming a customer by buying a product or service from you. Click continue at the bottom of the screen.
Use this step to give your goal a name. Something like “[Product Name] Purchase” is good. Then select a Goal Slot ID that has not been taken in your account. If you’ve never set a goal in Google Analytics before, then this should be “Goal Id 1 / Goal Set 1.” And then select a goal type of “Destination.”
Side note: Later on, as you become a more advanced Google Analytics user, you might decide to change this goal to an “Event” type goal for accuracy. For now, the “Destination” type goal will work just fine.
Now we’ll establish the details for how we want Google Analytics to track our goal. First off, we need to tell Google what page our customers will land on when they buy your product. Your e-commerce tool should allow a person to purchase a product from you and then automatically redirect that person to a page of your choosing.
Notice that the link you fill in is not a full URL. It’s just the part of the URL that comes after your main site URL. So in the screenshot above, there is no “https://convertkit.com.” Make sure that this page only gets visited when a person buys a product and that the link is not indexed in search engines. That way you won’t accidentally double count revenue from one customer.
Then give the purchase a default value. This should be the amount paid by your customer for the product purchased. If you’re selling a physical product, you might make this value the amount paid by your customer minus your cost of goods sold. It’s really up to you. Just use a consistent number that you understand and that accurately reflects the value of that purchase to your business.
Google has a handy little link right under the goal you just set that says “Verify This Goal.” When you click that link, Google will tell you how many times this goal would have been accomplished in the last seven days if you had already set it in your account. If you know you have no sales in the last week, then skip this step.
Then click save on your goal. You’ve just set your first Google Analytics goal. Good work! You can now do the same for all of your products or services, or for your new email subscribers if you set redirect pages on your forms in ConvertKit.
Next, you’ll need to learn how to use UTM parameters on the links in all of your emails.
UTM parameters sounds like something a NASA scientist would ask for from an astronaut on a spaceship. They’re not. Let me save you a bunch of time and research by making this as simple as possible: UTM parameters tell Google Analytics where visitors to your site came from with absolute accuracy.
Google likes to think they know everything, but in the end their analytics tool can mess things up when you leave it up to them to put your site visitors into buckets. Instead, UTM parameters give you control over how you track your analytics.
In order to to use UTM paramaters effectively, you need to understand a couple of terms:
UTM links use a standard format and it looks like this:
We can break it down to its component parts:
This particular link would tell our ConvertKit Google Analytics account that a site visitor who clicked on the link came from an email we sent to our list about our April 2017 issue of Tradecraft, which is our monthly blog publication (of which this post is a part).
Now that you’re stressed out about how you’re going to remember all of this, I’m going to relieve that stress for you: bookmark this link to the Google URL Builder. That tool will help you build UTM links without having to remember the details of how they’re structured.
Here’s the key: every time you add a link to one of your ConvertKit emails — broadcast or sequence — you need to add UTM parameters to be able to accurately track the ROI of your email efforts. K? K. Glad we got that ironed out.
It’s time to track the results.
Now that you’ve setup Google Analytics, set your goal for product sales, and you’re using UTM parameters in your links, we can measure the value of your email marketing efforts each month.
To do that, login to your Google Analytics account and navigate to the Conversions panel:
Then navigate to the Goals Overview:
Then select the goal you set for your product sales:
Then click on the Source/Medium view:
Then click on “View Full Report” in the screen above, which should take you to a report that looks like this:
This report will use the UTM parameters you set in each of the links in your emails from your ConvertKit account to show you a few key metrics:
To get your total ROI from your email marketing efforts, simple add up all of the values from your product sales in Google Analytics. Then use this equation:
ROI on email marketing = (Total value from product sales from email – (Total monthly cost of my email marketing tool + total cost of any employee or contractor time to manage my email marketing)) / (Total monthly cost of my email marketing tool + total cost of any employee or contractor time to manage my email marketing)
There you have it. A method for measuring the impact of email marketing on your business revenue. You can track all of the metrics you want, but at the end of the day, what matters most is how much money your business makes. Evaluating each of your marketing channels in this same way will give you a great feel for what’s worth your time and what’s not.
It’s important to remember that different marketing channels have different goals, but one of email marketing’s main goals is to turn email subscribers into customers. Now you have a way to prove that that’s true in your business.
Take the time to implement email marketing analytics tracking this month. Then come back here and let us know: what ROI did you get on your email marketing this month?
Download this issue of Tradecraft as a PDF to read and reference at your own pace.