What does ‘email marketing ROI’ mean?
Simply put, the term ‘email marketing ROI’ refers to the amount of money you make for every dollar you spend on an email marketing campaign.
If you want a more in-depth understanding of this topic, check out the FAQ section below:
Question #1: How do I measure my email marketing ROI?
There are several ways to measure your email marketing ROI. It all depends on the type of return you want to keep track of (e.g., leads acquired, opens, or other conversion events). But for the sake of simplicity, we will only focus on actual monetary returns today.
To calculate your email ROI, simply subtract the total cost of your campaign with the total revenue it generated, divide the result by the total cost of the campaign, and multiply the result by 100:
(Revenue generated – cost of campaign) / cost of campaign x 100 = email marketing ROI
So, if, for example, you spend $5,000 on an email marketing campaign that ends up generating $10,000 in revenue, using the formula above, your email marketing ROI would be 100%:
($10,000 – $5,000) / $5,000 x 100 = 100%
Question #2: What is its average?
Different sources claim a different average email marketing ROI. Some say it is $36 for every dollar you spend. Others say it is $46—which is a whopping 4,500% based on the formula in the previous section! But there are also those who claim more modest returns of about 120%.
So, which one is it?
Well, it should not really matter. As long as you see positive returns and you keep working on bumping them up over time, then you should be fine. But if you really want a specific number to shoot for, then the best way to go about it is see how your top competitors are doing. This is the best way to arrive at a number that actually applies to your specific business.
Question #3: How can I boost my email marketing ROI?
There are many ways to boost your email marketing ROI, including:
- Qualifying your leads better
- Improving your targeting
- Improving your subject lines
- Improving your offers
- Improving your calls to action
- Improving your pitch
- Personalising your marketing emails
Let us take a look at each one in more detail:
The first step to boost it is to qualify your leads better. Instead of focusing on getting as many people to join your email list, concentrate on getting as many people who are likely to buy what you are selling to join.
Keep in mind that having 100 leads who have money to spare and are interested in what you are selling is always better than having 10,000 leads who are ‘just looking’.
The second step is to improve your targeting. The goal is to send the most relevant marketing emails to leads who are most likely to respond to it and take the action you need them to take.
The third step is to write subject lines that make your target recipients want to check out the rest of your marketing emails. Remember that no matter how relevant your marketing emails are, if nobody actually opens them, then they are still practically worthless.
The fourth step is to provide your leads with better, more compelling offers that are actually built around their personal preferences and buying habits.
The fifth step is to support these improved offers with clear, equally compelling calls to action.
The sixth step is to tie everything up with a strong, persuasive pitch that clearly highlights the benefit of converting for the recipient. The goal is to make them not want to miss out.
Finally, to boost the effectiveness of your marketing emails even further—and, as a result, your email marketing ROI as well—try to include a touch of personalisation. It can be something as simple as addressing each recipient by name instead of using something generic such as ‘valued client’.
You can also check this article from WebFx for more information on how to improve your email marketing ROI.