How to Calculate Email Marketing ROI
What is email marketing?
Email marketing is one of the earliest forms of online
marketing. It’s used to promote products or services.
Marketing emails are sent to a list of subscribers who have
opted in to receive them and can be used to build & nurture relationships
with customers, generate leads, and drive sales.
How to you calculate email marketing ROI
Return on Investment (ROI) is a measure of how much profit
you generate from your email marketing campaigns. To calculate ROI, you need to
track two things:
- Revenue: This
is the amount of money you make from your email marketing campaigns. This
includes sales, leads, and other forms of revenue.
- Cost: This
is the amount of money you spend on your email marketing campaigns. This
includes the cost of your email marketing platform, list management, and
any other costs associated with sending email campaigns.
Once you have these two numbers, you can calculate your ROI
using the following formula:
ROI = (Revenue - Cost) / Cost
For example, if you generate £10,000 in revenue from your
email marketing campaigns and your total cost is £2,000, your ROI would be
A high ROI means that you are making more money from your
email marketing campaigns than you are spending. A low ROI means that you are
losing money on your email marketing campaigns.
How to track your email marketing ROI
In order to calculate your ROI, you need to track your
results. There are a number of ways to track your results, including:
Open rates: This is the percentage of subscribers who
open your email messages.
Click-through rates: This is the percentage of
subscribers who click on links in your email messages.
Conversion rates: This is the percentage of
subscribers who take a desired action, such as making a purchase or signing up
for a free trial.
Sales: This is the amount of money you make from your
email marketing campaigns.
Email marketing ROI tracking tools:
Email marketing software: Most email marketing
software includes built-in reporting tools that can help you track your
Google Analytics: Google Analytics can be used to
track your website traffic, including traffic from your email campaigns.
Conversion tracking pixels: Conversion tracking
pixels are small pieces of code that can be added to your website to track
conversions from your email campaigns.
By tracking your results, you can see what's working and
what's not. This will help you improve your email marketing campaigns over time
and increase your ROI.
What can Impact your ROI?
There are many factors that can impact your email marketing
The quality of your email list: A good email list is
made up of subscribers who are interested in what you have to offer. A bad
email list is made up of subscribers who are not interested in what you have to
Your subject line: Without a strong subject line that
catches your subscribers attention, they are less likely to open your email.
The relevance of your email messages: Your email
messages should be relevant to the interests of your subscribers. If your
messages are not relevant, your subscribers will be less likely to open them,
click on your links, and take any action.
The timing of your email campaigns: You should send
your email campaigns when your subscribers are most likely to be interested in
what you have to offer.
The design of your email messages: Your email
messages should be well-designed and easy to read.
The call to action: Your email messages should
include a clear call to action, such as clicking a link to visit your website
or making a purchase.
Tips for improving your email marketing ROI
There are a number of things you can do to improve your
email marketing ROI, including:
Segment your email list: Segmenting your email list
allows you to send more relevant and targeted messages to your subscribers,
which can lead to higher open rates, click-through rates, and conversion rates.
Personalize your email messages: Personalizing your
email messages with the recipient's name and other relevant information can
make your messages more engaging and persuasive.
Use a strong call to action: Make sure your email
messages include a clear call to action, such as clicking a link to visit your
website or making a purchase.
Split test emails: Running an A/B split test will
allow you to trial different subject lines, designs, ad copy and call to
actions so you can see what works and what doesn’t.
Track your results: It's important to track your
results so you can see what's working and what's not. This will help you
improve your email marketing campaigns over time.
By following these tips, you can improve your email
marketing ROI and get more value from your email marketing campaigns.
In conclusion, email marketing
whilst it is cost effective has many different factors when it comes to getting
a good return on investment and can be time consuming especially if you don’t
know where to start.
Our team has vast experience of building email marketing
campaigns, segmentations and automations from scratch.
touch with our team to find out more about how we can help you with email