Return on investment (ROI) is a common profitability ratio. Email marketing ROI refers to the indicator that assesses the efficiency of the investment in the specific email marketing campaign or to compare the effectiveness of different investments. 


How to Measure Email Marketing ROI

Billions of emails are sent daily, according to multiple resources. Does this mean that all of them have positive ROI?

For each dollar invested in email marketing, most businesses can expect an average return of $32, as reported by DMA in 2018. How can you estimate your ROI? Let’s start with a formula as this is the most common approach for estimating email marketing ROI:

(Gained − Spent) ÷ Spent = Return on Investment represented as a percentage

"Gained" refers to the estimated amount of money that an email campaign has brought. If your email service provider has Google Analytics integrated into their dashboard, it is simple to trace every sale resulting from an email.

"Spent" stands for the cost of the email campaign.

Estimate the value of a lead – it’s the simplest approach. Some SEO tools can help with this task. You can follow this manual method:

  1. Identify a lead. A lead is a qualified site visitor: a user has not purchased your service or product yet, but they are prospective buyers interested in your offer;
  2. Come up with a formula. It might seem a bit complex at first glance. The formula is the average sale × conversion rate. Imagine that you sell USB cables. If an average sale is $150 and your site converts at 3%, the value of a lead would be $150 x 0.03 = $4.5. In other words, every lead your business obtains is worth $4.5. Put simply, every individual who stumbles upon your site – via search, clicking an advertisement, or from social media – possesses a value of $4.5.
    The less frequently used formula is: 

Sales derived from email marketing − Cost of sales derived from email marketing − Email marketing costs) ÷ Email marketing costs

Have a closer look at each element of the first formula. You need to estimate the amount of money that you invested in email marketing campaigns. The simplest way to do this is to consider the time that every email marketing team spends on the creation and conversion of emails. Use a rate per hour for this purpose. In case all expenses of this type come from the ESP and time, the total amount spent will be ESP + team efficiency.

The next factor is simple and quick to calculate for online sellers. Experts recommend integrating Google Analytics with your ESP to see your numbers faster. The most common method used to estimate gain is to take into account the value of a lead:

The number of conversions × Value of a lead

If you cannot accurately track the revenue generated from every email, estimate the average ROI. Do the following:

Number of conversions made via email × cost of an average order

For those who are not sure about the accuracy of their estimations or lack some information, the best way is to try email marketing services that involve analytics.

SendPulse provides reports and deep analytics for each campaign that you send.

If you have no desire to waste time on manual calculations, you may benefit from using online email marketing ROI calculators. If you decide to use one like Sleeknote, consider the following:

  • the necessary currency;
  • total number of subscribers;
  • the final cost of the campaign;
  • open rate;
  • click-through rate;
  • conversion rate (look for it in Google Analytics);
  • the average value of a conversion (look for it in Google Analytics).

Additionally, there are two more ways to assess your ROI. Lead acceleration refers to estimating how long it takes a nurtured lead to transfer from the awareness phase to making a decision. As for the impact on revenue, this measure represents the value of every engagement across the specific marketing campaign.

How to Improve Email Marketing ROI

  1. Automate email marketing
  2. Personalize emails
  3. Set timing wisely
  4. Optimize content for mobile devices

Many companies face writer’s block when trying to prepare and launch email marketing campaigns. You should know that ROI depends on the quality of your business emails.

Automate email marketing

It’s critical to minimize the workload associated with emails because it’s not your core business activity. The best way to reduce your email workload is with email automation. Then, you'll be able to optimize your email marketing quickly on the go.Try to utilize as many automation instruments as possible for the best results.

Besides, email automation allows marketers to put nurturing leads on autopilot as well as answer users’ frequently asked questions so that your technical support team can deal with more important issues.

To boost your sales and fuel up your business, SendPulse developed Automation 360, which enables you to send emails triggered by users’ actions.

Below is an abandoned shopping cart email that allows businesses to increase sales. You can send it automatically after a user adds your product to their shopping cart, but doesn’t complete the purchase. Follow this step-by-step guide.

Abandoned cart email

Personalize emails

Everyone likes feeling special. That is what your clients expect to feel from your business. Start by adding the client’s first name and use the original greetings. Add the rest of the information based on the needs of a specific group of clients. Buyer personas may be useful in this case. SendPulse will help you create personalized emails based on the data users share with you.

Check out below how Grammarly congratulates its users on setting personal records. This is a great example of email personalization.

Pesonalized email from Grammarly

Set timing wisely

Figure out the optimal time for sending your messages. Pay attention to the specific days and hours when most subscribers open emails from your company. The tools and stats from SendPulse will help you detect the best time to send your email campaigns. Monday mornings and Thursday afternoons are currently the winners.

With SendPulse, you can schedule email campaigns and send them during non-working hours or just to save time.

Read more about the best time and day to send emails on our blog.

Optimize content for mobile devices

More than 50% of users open emails on their mobile phones, as statistics from the Campaign Monitor show. So, you should do your best to provide users with the best email experience. Make sure that your campaigns look awesome on both desktop and mobile.

If you’re not a tech-savvy marketer, create emails with the SendPulse drag and drop editor. You don’t have to know HTML to create stunning emails.

Below is a screenshot made from SendPulse editor. All you need to do drag the necessary elements into your working field. Try it right now!

Creating an email campaign with SendPulse

SendPulse offers a wide choice of tools that will help you improve your email marketing ROI. Give us a try with a free trial. Send 15,000 emails each month totally for free!

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