Measure and Optimize Results

Measuring results boils down to one question: How much does it cost to get a purchase through cold email?

If your cost of acquiring a customer (CAC) is less than the amount of money you make from each customer, you’ve validated a channel and you’re ready to scale up.

Below are additional metrics that will help you increase your cold email performance, and, thus, decrease your CAC.

Time Spent Per Purchase

Gather a rough estimate of how much time it took you to source, send and respond to all of your initial emails.

For example, say it takes you:

• 4 hours to source 100 email addresses.
• 3 hours to send and personalize them.
• Another 3 hours to respond before closing.

You spent 10 hours total. If one person purchased out of all of those emails, You’ve spent 10 hours per purchase.

You can use hours per purchase to figure out whether it’s worth hiring a salesperson or a sales team. Be sure to factor in costs for tools (like Hunter.io or Lemlist). While relatively marginal compared to labor, they should be included in your ROI calculation.

An average account executive in the United States costs about $100,000 per year including benefits—that’s about $50/hour.

If it takes 10 sales hours per purchase, it costs you $500 per purchase to hire an Account Executive.

If your product’s profit exceeds that, it’s worth hiring.

Note: All percentages below are a percentage of the initial cold emails sent. Numbers are drawn from our experience sending thousands of cold emails for 50+ startups. Percentages will vary based on your business type and your audience, but these are rough benchmarks.

Open rate

The percentage of emails opened.‌

In cold outreach, open rate is a measure of how enticing your subject line is.

You can improve your open rate by A/B testing your subject line. Before you email your entire prospect list, send a portion of your list (say, 100 people) two different subject lines. Then send the rest of your list the subject line that had a higher open rate.

We’ve sent thousands of cold emails for clients, and we’ve found the following metrics to be true:

Average open rate: 20-30%. Good open rate: 30-50%. Outstanding open rate: 50%+.

Click-through rate

Click-through rate (CTR) is the percentage of emails sent where the recipient clicked an embedded link.‌

This is a measure of how enticing your email body is, whether you’ve included a clear CTA, and whether you’ve emailed the right people.

Note: Keep in mind that using software to track your click-through rate will impact your deliverability—internet service providers (like Gmail) don’t like tracking software. So recording anything more than opens can hurt deliverability.

Our suggestion: Start with tracking. Get a handle on your numbers. Then decide if using tracking is worth the potential decline in deliverability.

Average CTR: 3-5%. Good CTR: 5-10%. Outstanding CTR: 10%+.

Response rate

Response rate is the percentage of your list that responds to your emails.

This is a measure of how enticing your email body and website are combined with how well you created your targeted prospect list.

In addition, response rate is higher when targets already know who you are (e.g. pre-targeting covered below). If the goal of your cold outreach is to book meetings, this is the most important metric—you need booked calls to close sales.

Average response rate: 5-10%. Good response rate: 10-20%. Outstanding response rate: 20%+.

Purchase Rate

Purchase rate is the percent of cold contacts who eventually purchase from you.

For most cold outreach, this metric measures your end goal of acquiring customers. Even though purchases may take a lot of back-and-forth and take longer than a week, make sure you’re tracking this diligently—this is how you prove your cold outreach ROI.

If you see high response and click-through rates, but low purchase rates, you’ll want to improve your sales funnel after the initial email.

Average purchase rate: 0.5%-1%. Good purchase rate: 1-2%. Outstanding purchase rate: 2%+.