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For small businesses that want to understand their customers' online behaviour, it's crucial to choose the right tools for the job.

Web analytics tools, like those covered in a recent four-part Web Strategy series, can provide a helpful birds-eye view of how customers use your website. But often, it's difficult to zoom in and see what any one individual is up to. You may get a good picture of the forest, but not much detail about the trees.

E-mail analytics, on the other hand, allow small businesses to drill-down to individual customers with surprising precision. For example, e-mail marketing service MailChimp offers "a real-time report for every subscriber's e-mail activities: when they opened, what they clicked, and when they came back."

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MailChimp isn't alone in offering this kind of personalized tracking.

MadMimi, Campaign Monitor, and Direct Mail, among many others, tout their tracking features prominently.

Some services offer the ability to track not only who opens a message, but also where they open it. For example, Direct Mail offers an interactive mapping feature, which, according to their website, allows customers to "see the geographic location of your recipients when they open or click on your message – in real time!"

This kind of location-awareness enables new possibilities for targeting and personalization.

"We can do weather-based promotions," says Matthew Weinberg of Vector Media Group, a New York-based marketing agency. "It seems a little bit silly, but it's very, very effective. Things like, 'Hey, we know it's raining where you are. Get this product to help.'" According to Mr. Weinberg, e-mail analytics allow small businesses to personalize an existing opt-in customer relationship. "Because you have information about individual users, it's easier to send things that are relevant to them."

Most e-mail marketing services offer online analytics dashboards with impressive graphs, visualizations, and reports. "Warning, reload button can be addictive," says Campaign Monitor's features page, half-jokingly. Indeed, it can be exciting to send out an e-mail newsletter and watch in real-time as customers open it.

But Tim Richardson, who teaches marketing and e-commerce at the University of Toronto, warns small businesses not to "obsess" over analytics. E-mail analytics can be useful small business tools, but "you still need to focus on running the business, too," he says.

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When faced with a dashboard full of analytics, it can be difficult to figure out which numbers are worth paying attention to, and what exactly you're supposed to do with them.

Mr. Weinberg suggests that small businesses pay close attention to two metrics in particular: the open rate – how many people opened up your e-mail – and the click rate – how many people clicked on a link within the body of your message.

"Your open rate is a judgment of your subject line. Your click rate is a judgment of your content."

He says small businesses should look at these two numbers in relation to one another. "If you have a great open rate and a very low click rate, that suggests you had a great subject line that got people interested, but they didn't find anything of value in the e-mail. Or, vice-versa, if you have a really bad open rate, but a really great click rate for those who open, that suggests people weren't interested by your subject line."

Tracking when a message is opened can also be useful. "What times are people looking at your e-mail?" asks Mr. Weinberg. "Are they opening it at 10 a.m. on a Wednesday? To me, that suggests they're at work, and you can tailor your message for that."

Dev Basu, CEO of Toronto-based internet marketing agency Powered By Search suggests that small businesses make use of tracking and customization features for their newsletters and mailing lists. "Make sure it's as personalized as possible," he says, "'Dear Client' is not as great as 'Dear Tom' or 'Dear George.'" At the same time, it's important for small businesses to recognize that many customers don't know the extent to which their e-mail is tracked and reported on. "The average user has no clue," says Mr. Basu.

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From his office in New York, Mr. Weinberg agrees. "The last thing you want to do as an e-mail marketer is bother people. If you bother people, they have a one-click way to get you to never talk to them again. So, if you abuse tracking data, and you do it in a creepy way, you only end up hurting yourself. They'll unsubscribe, and you lose that relationship forever."

Other stories can be found on the Web Strategy section of the Report on Small Business website .

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