Despite many predictions that the email will disappear one day, it is alive and well. When the average consumer checks either work or personal email several times a day, it is one of the most reliable ways to communicate. Unlike a ringtone, emails can be answered to suit the recipients. So it’s no wonder that email marketing is a huge incentive to profit. However, this becomes even clearer when you look at the following email marketing statistics: (see My mail from email marketing statistics sources of this information)
In the first place, email marketers earn $ 40 in sales for every $ 1 spent on sending email. This is a lot of potential profit even if you don’t have a large mailing list. And it’s not likely that your marketing email lists will stay short for a long time because 77% of customers want email for access-based marketing messages. Given how convenient it is for consumers to read emails as time allows, this is probably not surprising.
Of course, your email marketing program is highly scalable, even if your business or customer base crosses international boundaries. One reason for this is it there are 3.9 billion daily email users. This is a huge percentage of the planet’s adult population. Along with it there are 400 million more email users than social media users, email marketing can make a lot of money. With that in mind, how can you measure your company’s email marketing ROI?
What is the ROI of email marketing?
Knowing the return on investment for electricity marketing requires an understanding of this term and what it measures. First, ROI refers to “return on investment”. Simply put, ROI is calculated as return divided by investment dollars. The hardest part here is measuring your return on the dollar value. If your definition of revenue is sales growth relative to baseline, this is easy. However, other benefits of email marketing, such as brand awareness, are harder to appreciate.
As with the ROI, calculating ROI for email marketing can be simple or complex, depending on the definition of “return”. In this case, your ROI is expressed as the value of your email marketing divided by the cost you spend on your email marketing campaign. Investments may include staff time, email software services purchased and all other used. Let’s look at the benefits of email marketing that can be counted as part of revenue.
Email marketing increases sales
The clearest measure of email marketing ROI is sales growth. One reason why email gets such a high return on investment is that it is very effective. Actually, 59% of people say email directly influences their purchasing decisions. In addition, studies have shown it buying by email leads to a purchase that costs 138% more than orders placed by customers who do not receive marketing messages.
Together, these statistics show that email marketing not only increases sales, but also significantly. In other words, both access to a customer’s inbox and awareness that you’re offering a campaign (or releasing a new product) will give you an edge over your competitors. Sometimes something as simple as regular customer communication is very effective.
Email marketing improves the effectiveness of your marketing efforts
Even in addition to immediate sales growth, there are many other ways to create an email marketing ROI. Once again, statistics tell us that sending emails increases the effectiveness of your marketing efforts. Getting customers to your website is half the battle unless you do email marketing. To get a customer buy-in, you still have to get them another way.
One way to attract people to your website is through social media marketing. This approach can include paid social, organic messages, or influencer marketing. However, when you receive that email address, email marketing conversion rates are three times that of social media marketing.
Commitment is also easier with email. For example, email average CTR is six times the average organic social media engagement. People tend to browse Facebook to get news about their friends and family. On the other hand, emails are checked for commercial content. That’s probably no wonder your message is five times more likely to appear via email than on Facebook. Other social media networks have similar results. Actually, you get a 6x more likely clickthrough rate from email than from Twitter.
Likewise, marketing messages are very effective when your customers discard their shopping cart before making a purchase. In one study 50% of email users who clicked Shopping Cart Bounce Emails bought. And this is not the end of the story, as more than one email will increase the efficiency of your email. The researchers found it Sending three emails to cart rejectors generates 69% more orders as if only one were sent.
Email marketing helps in your marketing efforts on social media. Actually, your email subscribers are 3.9 times more likely to share your content on social media. While we may not know why this is, it’s easy to imagine email subscribers excited about your products and services. In addition, everyone likes a lot, and offers are often shared with other people.
How do you calculate your ROI in email marketing?
With email being such a powerful marketing tool, it’s easy to see why email ROI is so high. However, this does not replace knowledge of how these figures are calculated. Fortunately, it’s always easier if you know your marketing goals. For most companies, sales targets are hard dollars or a percentage increase over the last reporting period. When calculating your ROI, it is important to understand your email marketing goals in conjunction with your overall sales goals.
Ultimately, however, the return on investment depends on what you hope to get from email marketing. Sales numbers are easy to calculate, but other metrics such as brand awareness or customer loyalty are more difficult to measure. However, some measurements exist, such ascustomer life cycle value. “Remember that customers’ ongoing sales grow over time.
Calculate your consumption
The first step in determining the ROI of email marketing is, of course, to know how much you spent on email marketing. These numbers can be calculated per year, per month, or per campaign. However, in each case yours email marketing costs should include all costs. This includes:
Every email marketing campaign requires staff. While this is just one person who manages freelancers or other outsourcing options, you have to pay that salary. Some people working with emails may have significant expertise.
Creating emails and related content also costs money. Examples include graphic design software and freelancer fees.
Email Program Fees
Most email marketing software costs money, usually on a subscription basis. Sometimes they charge you a month. In other cases, email marketing customers will be charged based on the size of your email list.
If you are an ecommerce site, then lead magnets are often discounts on future orders. For other companies, it could be something like a paper book or a book chapter. Your choice depends on the type of products and services you offer.
Depending on your jurisdiction, you may incur compliance costs. In the U.S., you need to have a way for people to opt out of your emails. California has increased its privacy rights, as has the European Union. There are programs that can help you meet the requirements.
Calculate your winnings
On the other side of the email marketing ROI equation is the value you get from your businesses. Ideally, you will have more accurate numbers for your management team than “sales increased by X.” However, achieving this accuracy requires a few extra steps.
Using Google Analytics allows you to measure a wide variety of website traffic changes. For example, you know how many visitors you have to your website and how many repeat visitors. Analytics can also tell you where your customers are from. This tool is particularly effective in measuring factors such as changes in brand awareness and (to a lesser extent) consumer loyalty.
Compare customers with subscribers
Another technique you can use is to see how many people on your email address list actually buy stuff. If you integrate CRM or subscribe to databases with your email provider, this is relatively easy to see. In addition, you can find out how many of your first customers sign up for marketing messages.
Together, these and other factors will help you calculate your company’s email marketing ROI. With this number, you can compare actual results with your company’s goals. Equally important is that you can give an accurate picture of how well your efforts have paid off.
Once you’ve determined your ROI on email marketing, you can further improve your sales. First, you can optimize your email marketing to get a better return on investment. One way to do this is to clean up your email list every now and then. People change email addresses and discard old ones, leaving you unproductive subscribers. There is no reason to continue sending them emails. Other methods to reduce email marketing costs can also increase your ROI.
Another way to take advantage of the high ROI of email marketing is to transfer part of your budget to email from other channels. Which marketing line item discount should depend heavily on where else you get a good return on investment. The lower the rate of return on investment, the less you should spend on something.
Try using an email marketing ROI calculator
Finally, there are some calculators on the Internet that can help you determine your ROI on email marketing more easily. Check this first Sleeknoten calculator. Instead of having to fill out a form, it tells you which items to associate to determine the value. Then you do the math yourself. Another option exists this automatic format. It’s on the website itself, but the authors have left detailed instructions on how to use the calculator. Just remember that the results of these calculators need to be confirmed by internal figures.
Knowing the ROI of email marketing is one of the most important ways to measure the effectiveness of your marketing. Whether you’re trying to increase sales, get more customers, or just increase brand awareness, everything has monetary value. Fortunately, calculating these numbers is easy with these tips and a few analytical figures.
Hero image: Omer Haktan Bulut on Unsplash