1. Don't measure clicks, measure the 'the relationship'.

This is really the context of why you measure in the first place. You are growing a community of involved customers and prospects. Consistent, applied measuring will tell you many things over time, such as:

• How rapidly the community is growing or shrinking
• The number of meaningful segments it consists of and how they change
• The level of commitment and involvement of individual members
• The average customer tenure
• The average success rate of converting prospects to customers
• Which email programs are most successful
• The relative appeal of various offers

2. Plan what you will measure

The first step in your commitment to measurement is to communicate it in writing - ideally in the Marketing Plan where you can align email ambitions with overall objectives. Here, you might decide that your email objectives for the fiscal year are to increase the prospect database by 20%, gain explicit email permission from 50% of the customer base, and to grow online sales by 10%. These are measurable objectives that tie directly to overall marketing strategy and, ultimately, feed the sales funnel.

The next place to communicate objectives is the Creative Brief. Every campaign should begin with one so that copywriters, marketing managers, art directors and production coordinators all see the same goals and know exactly how to gauge success.

3. Start with the essentials

At a minimum, marketers should measure each campaign and track the segment impact. Email is a relationship medium so ideally you should track longer-term measures such as most active readers, "engagement tenure" and, of course, sales transactions.

4. Measure cost efficiencies

The most important measure of all is whether your campaigns are worthwhile. Standard campaign reports should contain basic cost efficiency measures that you can compare across campaigns to reveal underlying trends. When calculating actual delivered costs, don't forget to factor deployment charges, agency design fees, and account management time. While deployment fees are pennies per message the actual cost of a 40,000 message campaign typically runs $0.10-$.20 per message.

With email tracking, we can immediately show clients the:

• Cost per Message Opened (CPO)
• Cost per Message Clicked (CPC)
• Cost per Response (CPR)

5. Don't forget ROI

Of course the ultimate goal is to measure the incremental revenue and attributed ROI associated with your campaigns. This requires good information flow between Marketing and Sales so that you can reliably track a lead as it converts to a sale, or a message to a customer as it prompts them to purchase. (The larger the company, the more challenging this task.)

A solution we recommend is maintaining a very robust, online marketing database that shares some common fields with the customer database. That way, the two can share information without compromising the other, and you can link cause (marketing message) with effect (sale). The need for this grew so apparent with our customers that we began hosting such a database for them (please see separate sidebar 'The essential online marketing database'.)

6. Watch the leaders

If you run short of ideas on what you should measure, just keep an eye on the leaders. Some we have spoken to recently are now focusing on Lifetime Value (LTV) and making calculations based on longitudinal tracking of retention and spending. LTV will be a very accurate assessment of the value of your email programs. Leading marketers are also tracking:

• Sequential Email Streams
• IMC programs
• Size & Growth of Opt-in Base
• Segment activity and migration

Benchmarks are useful is assessing your relative performance but must also be taken with a grain of salt. Averages vary considerably among industry sectors, so you should benchmark versus your own sector as much as possible.

We reference a cross section of sources including email vendors, research reports, and conferences and compile these into an Inbox library of industry cases. Here is some sample information on the publishing sector, for example:

• Average publisher captures email permission from 30% of subscribers
• 60% of publishers use email to renew subscribers.
• Cost per web generated subscriber is $2.19 vs $9.26 for mail
• Emails are more cost efficient at driving online sweeps entries (24% response for email vs 1.5% for postcards)

8. Observe best practices

Another way to stay abreast of the latest trends in measurement is to subscribe to some free email newsletters that focus on best practices. Among them are: ClickZ (www.clickz.com), and our own Inbox Marketer (www.inboxmarketer.com).