Author
Vladislav Podolyako
Published
Dec 13, 2021
Reading duration
11m

When you look for a marketing channel with the most steady and predictable return on investment, you look no further than email marketing. Aside from being extremely manageable, it also gives you back 42$ for each 1$ spent on campaigns. This means that the estimated ROI of email marketing can reach at least 4200%. Compare it to other marketing channels, social media, for example - only 34% of marketers can adamantly say that they can calculate their success while using social media to generate sales and customer relationships. Meanwhile, they invest around 48$ in every advertising campaign on average. 

If you're less of an opportunist and more of a person who prefers certainty and consistency, you know your priorities. In this blog post, we will help you understand how your email marketing ROI works - and how to make it work even better. 

What is email marketing ROI, and how to calculate it?

Email marketing ROI covers the value you gain from your email campaigns compared to the value you spend on them. This is how you know when your campaign is effective, contains the right message, and attracts the right type of buyers - or when it's time to stop and try another, more beneficial approach. 

You can figure your ROI out through a rather simple formula:

Let's say, you spend around 10 000$ on fine-tuning your mailboxes, crafting templates, and sending marketing emails to your users - this is your Spent Value or the number of funds you invest in your email marketing channel. That includes the price of email service, email research tools, the salary of your email marketing team, and every other expense related to creating an email outreach channel.  

In a month, you earn 300 000$ from the customers converted through your campaigns. This is your Gained Value aka your earnings from your email marketing campaigns within a certain period of time. There, you got your two main components, and now the magic can start. 

So, as the formula shows you, your average ROI from your marketing campaign is 29$ for each dollar you paid. Multiply that number by 100. Now you know that spending 10 000$ on marketing campaigns brought you a 2900% increase that led you to earn 300 000$

What makes email marketing ROI so important?

There is an obvious reason - you must know that you receive more than you give. You have funds to manage - and if a sales channel doesn’t perform as you expected or turns into a money-sucking void, you must cut it off before it starts affecting your budget. 

Understanding your return on investment allows you to:

  • Get an accurate image of your buyers. When you know which email marketing strategy works, you know what motivates your prospects and pushes them to make a buying decision. So, you make fewer mistakes when pinpointing your buyer personas or crafting marketing messages - and reduce the time necessary for prospects to proceed further down the sales funnel.
  • Boost your website traffic. When you want to get more visits to your website, SEO is the first thing that comes to your mind. However, SEO takes time and tons of work before it starts driving results. Email marketing campaigns can introduce your target audience to your online portal quickly and easily by offering something of value to each recipient, prompting them to look you up and explore all sources of information about you and your brand.   
  • Segment your target audience. The more you know about your potential customers, the easier it is for you to create targeted content and offer something exclusive to each group. It may consist of new buyers or long-time subscribers, and you can select the most responsive clients and encourage the most proactive buyers. That means you'll be able to build up your conversions and click-through rates easily.
  • Discover more personalization opportunities. Personalization matters a lot in the profitability and success of email marketing campaigns. According to Smarter HQ, around 72% of customers only interact with personalized marketing emails.

Best practices for increasing email marketing ROI

Your ROI isn’t set in stone, is it? It can be adjusted and increased by taking the appropriate measures. So, once you get a satisfactory ROI, you can start working on building your success by figuring out the strongest points of your email marketing campaigns and injecting more value into them. There are many ways to do it, and we shall shed some light on the most popular practices out there. 

1. Harness the power of data

You can't read the thoughts of your target audience - and if telepathy was possible, we would still be strongly against it. You don't need to invade the private space of your potential clients to learn what they want and how to appeal to them. All you need is located in two data pools. Both of them are available to you and contain valuable insights into your prospects' behavior. 

  • Website visitor data. Users who come to your website and study each page can become your best customers - provided you manage to figure out what caught their interest and give them what they want. To do this, you must have an outline of their key goals, their demographics, and their priorities, and use that knowledge to tailor your templates. You can study your daily visitors via Google Analytics - a must-have tool for anyone who wants to learn more about where their visitors come from (Google search engine, link on the guest blogging platform, social media, etc.), which page they view most frequently (service pages, the pricing page, blog posts), whether they are one-time visitors or return every day or week. With such information on your hands, you'll have a better idea about igniting your target audience's interest and turning visitors into subscribers.
  • Campaign data. Never neglect the information that previous campaigns can provide you with. Some tools show you:
  1. The type of device used to view your message;
  2. When users are the most proactive while interacting with your emails;
  3. What links generated the largest engagement;
  4. The number of buyers that got converted;  
  5. The purchases made by converted buyers.

 

That data lets you give the most accurate evaluation of your performance and secure dynamic communication between your recipients and you. This brings us to the next practice for boosting email marketing ROI.

2. Prioritize deliverability 

You can’t talk about ROI until you are confident about your deliverability. It won’t build itself - instead, you need to work on multiple factors to achieve great performance and see your campaigns drive results. The more mailboxes you send to, the more challenges you’re guaranteed to encounter. So, if you want to improve your marketing ROI, ask yourself: 

  • Have I configured my email verification protocols according to my email marketing goals?  
  • Did I run enough warm-up campaigns?
  • Is my sending list clean enough?
  • Do I have all KPIs in my sights?
  • Do I have a tool for scanning blacklists? 

Of course, it takes time to achieve high deliverability. Your current results may be just enough to get a good ROI, but if you want to go better, faster, stronger, you should keep an eye on your progress, be ready to take extra measures, and never give up on your warmup. 

3. Build a highly-focused list

This strategy is particularly relevant for B2B email marketing. In this very active and busy area, you have no time for guessing games. When you send a message to someone, you want them to be the right person, worth investing your time and effort in, capable of truly benefitting from your offer. There is nothing worse than sending email after email to someone you pegged as a decision-maker only to find out that they no longer work at the targeted company! The more irrelevant addresses there are on your list, the lower your engagement rate will go. You'll be setting yourself up for long sales cycles without any tangible results. 

Gathering more exclusive data with sales intelligence tools and thorough researchers allows you to keep your sending list clean and valuable. Usually, that means that you must do some pre-sale exploration by attending LinkedIn pages of people who look like the perfect decision-makers, collecting and verifying contact data. Of course, not everyone has time for this - good thing that you have outsourced teams to help you out. 

4. Use more than one style and tone

Speaking of personalization, the more you know about each segment of your receiving audience, the more you understand their tone and voice of choice. Some of your prospects may stick to more visual content, while others would prefer a more laconic approach. Some users believe in case studies and social proof, while others need detailed reviews and lots of educational content before they deem you a credible vendor. 

Content lets you express yourself and talk about your services creatively, so don't hesitate to let yourself go and work on different types of content for different types of your prospects, subscribers, and clients. As long as your templates don't break email outreach guidelines, contain spam trigger words, or overflow with unnecessary links, you're good to go. Also, your recipients would appreciate your attention to their preferences. 

Which aspects of your email should always be personalized?

  • Subject line. This is the attention-grabber for all recipients who check their inboxes. The more exclusivity it promises, the higher are the chances of your email getting opened. A truly relevant subject line is a work of art: it's non-obtrusive, it's not overly salesy, it tempts you with the promise of unique value, and it's very clear about the person who sent the email and their goals. This is why you should practice your subject line writing skills regularly. 
  • Sender identity. Never provide your recipients with just a from:[email protected] address. Give them your name, your title, the name of your company, and your photo. Regardless of your target audience segment, your prospects must know who they are dealing with. When your email address is all they see, they might start thinking that they're talking to a bot. 
  • Visuals. You can tailor your content to meet the user’s preferences in color or even make your email template design more gender-specific (especially if you sell items catering to a certain gender or offer benefits for a certain group). But be careful, though - not all email services support HTML format. 
  • Slang and professional jargon. When you know about the industries and areas your recipients work in, you understand that terminology that rings a bell for them. Therefore, you can inject more familiarity into your templates, showing that you are truly interested in their everyday issues and aware of their priorities.  

5. Keep your outreach optimized for mobile

Since we mentioned preferences, we should acknowledge the mobile age we live in. People don't part with their smartphones and gadgets, using them as a portal to the world of information, content, and entertainment. Buyers and entrepreneurs use their devices for making purchases, managing their workflow, and, yes, checking email. Accordingly, if your emails can't be viewed from a smartphone, you miss out on a great chunk of potential buyers. An average user is anything but patient - if it takes them more than 3 seconds to upload an email or if its readability is less than satisfactory, they will instantly close it and move on to other more optimized messages. 

You can estimate the mobile compatibility of your emails by checking them out with your own smartphone: it’s the fastest way to put yourself in your recipients’ shoes and see how they perceive your email marketing content. 

To make sure that your messages are mobile-friendly, let your web developer and art director take a look at them, see how they can be optimized and made more pleasing to the eyes of your target audience. 

6. Use email marketing automation 

This practice is vital for B2C, especially now, when e-commerce is booming. This is why automation features are commonly offered by a plethora of email marketing services such as MailChimp. These features make it possible to:

  • Schedule emails. Tired of sitting in wait to send newsletters and promotional messages at the right moment? You don't have to. The automation settings allow you to select the right time slot, add the list of contacts and rest easy, knowing that messages will reach your recipients' mailboxes without delays. This lets you remove the human factor from the list of things that can go wrong about your email campaigns and let the system handle all monotonous tasks.
  • Set up transactional emails. Email marketing automation features track the users' purchase history and generate invoices, confirmation emails, notifications, and alerts letting each converted buyer quickly wrap their buyer decision up or continue interacting with the website.
  • Send abandoned cart notifications. This type of message is a powerful remarketing tool that helps you recapture site visitors who didn't make up their minds. Triggered whenever an item is added to a virtual cart but not taken further, abandoned cart emails softly push users to take action and show that their choice matters. 

Conclusion

Email marketing ROI is a very valuable and controllable KPI that can show you your progress with the email marketing roadmap - and how many challenges lie ahead. It lets you distribute your money between sales channels as effectively as possible and encourages you to try even harder. 

We hope that the practices we listed here will help you with achieving your marketing goals and inspire you to go beyond your current results. To optimize your campaigns and make sure no detail slips past you, we suggest trying your practices together with our Folderly tool. It will keep an eye on the most important component of your email marketing - your deliverability by running domain health audits and spam tests. You'll have an entire week to test it, see how much clarity and transparency it gives you, and decide whether it's the right platform for you. 

Good luck, and may the force of ROI be with you!

Vladislav Podolyako
Author:
Vladislav Podolyako
Founder & CEO
Vlad’s decades of entrepreneurial wisdom and business building experience have allowed him to successfully mentor a diverse group of business owners, entrepreneurs in growing their companies. A recognized expert in the areas of transforming organizational culture and leadership development, B2B Sales, Marketing, spent more than 10 years building technology products, with a background in communication networks and electronic device engineering.

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