Understanding Open Rates

One of the best features of any email marketing service is tracking and reporting. When people are first introduced to email marketing, they are thrilled to find that they can see who is (or isn’t) opening their emails and what they’re clicking on.

After experiencing the initial delight that comes with discovering this helpful tool, the next reaction can be one of disappointment. I’ve heard questions like, “Why is it that only 40% of my list opens my emails?” or “When I first started sending, I had a 60% open rate and now it’s dropped to 37%. What happened?”

Gail Goodman, CEO of Constant Contact explores the topic of open rates in this interesting article. By the end of it, you will have a better idea of what they are, how they are determined, how to feel about yours, and what you can do to improve them.

What is an open rate and how is it determined?
Your open rate tells you the percentage of those on your list who opened your email campaign (bounced addresses are taken out of the equation). The reporting feature of your email marketing service tracks the number of “unique opens”, which means that no list member is counted twice, no matter how many times they open the email.

How does the service know who opened? What is being measured? Each email campaign you send contains a small (one pixel by one pixel) image called a “web beacon.” You can’t see it. It is in the HTML code that is “behind the scenes” and is written like an image, so it is recognized as such. As soon as your list member views your email campaign, a message is transmitted to your service’s tracking mechanism and is recorded. It is then updated in your account, and voila!, you see the total number of recipients who opened that campaign to-date.

When are opens not counted?
There are several reasons why an opened email might not be represented in the count you see. Web beacons do not work when images are not displayed in your recipients email account. This means that if you send text-only emails, they are not tracked. Also, if you send HTML emails, but your list members have the images turned off (whether by choice or default) or if they read your email on a handheld device like a Blackberry or Treo, their open will not be counted.

A percentage of emails sent to corporate addresses cannot be tracked. This accounts for the lower open rates that are experienced in B-to-B communication, versus B-to-C. Some business domains have email management tools in place that block the web beacons so senders can’t know if their emails were opened or not.

Is your open rate accurate?
Your open rate report gives you a very good representation of the number of people who are seeing your email, but because not all opens are registered, your rates are probably higher than they are reported to be.

Also, there is a good chance that it’s not the same people opening your emails every time you send, even if your rates are consistent. Take yourself as an example. You may not open every email that a business or organization sends you. You may open a newsletter from the local food pantry in January and not in February, while your neighbor opens it in February and not January. You are both staying connected with the pantry even though you aren’t opening their emails every month. If this was the case, the sender would see a higher open rate if he or she measured it over a two month period.

Judging your open rates
How should you feel about your open rates? You can start by comparing them to the industry standards. According to the MarketingSherpa’s Email Benchmark Guide 2006, the most common range for B-to-C open rates for 2004 and 2005 was 30% – 39% , while the B-to-B range was 10 % – 29%. Also, open rates vary by category (travel, retail, business services, etc.). According to the Harte-Hanks Postfuture Index for January-June 2006, restaurants had the highest open rates of any of the 13 categories considered during that period; retail had the lowest.

So, according to industry standards, if you have a 35% open rate you are doing well. But don’t just judge your open rate against these stats, judge it against your past performance. To examine your own results, map out your business’ open rate trend line. Over the past 12 months, when did you get the best open rates? Look at those campaigns you sent and ask, “what did I do that made this successful?”

Why open rates decline over time
There are several reasons why open rates decline. For starters, it is very normal for this to happen after the first few times you send. When list members get your first few emails, they are curious because they haven’t received anything from you before. After you’ve been emailing for a while, the curiosity factor is curbed (this is a great argument to make a good impression right off the bat!).

Rates have fallen over the past few years as a result of the issues addressed above-images turned off and email read on handheld devices. Another reason for declining open rates is that inboxes are increasingly getting fuller. Take your own inbox for example-think of all of the emails you get from businesses. Your time to read messages is not unlimited. You have to pick and choose what you want to look at and read. This is true for your list members too, and is a compelling reason to make sure your content is valuable to them. Which leads me to the good news-there are some things you can do to get those open rates up again!

Five things you can do to improve your open rates

1. Send more targeted emails – The better you know your list members and their interests and the more your emails cater to them, the higher your open rates will be. Have you thought about how you can segment your list into interest groups? It’s worth the effort. Don’t you love it when you get an email about something you are truly interested in? You are more likely to open it.
2. Improve your subject lines – A good subject line will get a campaign opened. Lead with a benefit that let’s the receiver know what’s in it for him or her. Make it interesting and try to pique the reader’s curiosity. You want them to feel compelled to find out more. Here are a few more tips that can help your emails make it into the inbox and get opened — remember to avoid all caps, exclamation points, and words like “free” and “sale.”
3. Test your sending times – Try a different day or a different time of day to see if you achieve a higher open rate. We’ve seen accounts improve their rates from 15% – 20% by changing when they send. Tuesdays and Wednesdays have reportedly been the best days to send, but a report released by eRoi at the close of the second quarter of 2006 showed that open rates were higher on weekends—37% on Sundays and 38% on Saturdays, with Monday being the best weekday at 35.7%. What we can learn from this is that every sender has to figure out what works for his or her list.
4. Check your “from” name – Is your “from” name easily recognizable? Will your list members know who they are receiving an email from? Put the name that your receivers are most familiar with in your “from” line. In most cases, this is not your name (or the name of the person in your office who sends out your email campaigns). Best practice would be to use your organization’s name. Most emails that are quickly deleted are those with an unrecognizable “from” name or address.
5. Evaluate how often you send – You might send too often or you might not send often enough. Consider asking your list how often they want to hear from you. For example, give them the option to sign up for weekly or monthly emails.

By using email marketing to connect with your customers or members, you have the benefit of knowing who is interested in what you are saying or selling. And every time someone opens your email, you are planting a seed, reminding them, “I’m here when you need me.” With tracking and reporting, you can know how many seeds you are planting and you can watch them as they grow.