What is the true ROI of Email Marketing?
With all of the different digital marketing channels available to the modern marketer, it’s fair to ask, is email marketing still a valuable part of your digital marketing strategy?
Yes, yes, a thousand times, yes!
No matter how many other innovative digital marketing tactics emerge, email marketing remains one of the best ways to reach and engage your target audience. Email marketing’s power lies in its ability to provide businesses of all sizes an attractive return on investment. In fact, according to an eMarketer study, the median email marketing ROI is 122%. That’s four times higher than any other digital marketing channel.
If you think this sounds too good to be true, you’re not alone. The best way to break down this incredibly high return on investment percentage is to take a look at the true value of email marketing ROI when it comes to different aspects of your business. You’d be surprised to know that according to Chief Marketer, the percentage of digital marketers who actually understands their marketing funnels’ ROI and the factors that affect it is only less than 30%. So below, we’ll explain the different ways that email marketing offers your business a return on investment and how you can measure ROI over the course of your email campaigns.
Email Marketing ROI #1: Increase Company Revenue
Though there are many different tools in your digital marketing toolbox, email marketing continues to be the greatest driver of revenue for many businesses. Furthermore, revenue from email marketing ROI continues to improve year over year. This suggests that consumers are continuing to engage with brands through email marketing year after year.
There are a few different reasons for this. The number of email users in the U.S. continues to grow each year. By 2020, the number of email users is estimated to grow to about 259 million. As more and more people sign up for an email address and use it on a regular basis, they also start to use this communication channel to keep in touch with their favourite brands. As a matter of fact, in research done by Campaign Monitor, more than 50% of users prefer to get updates from the brands they follow through email.
The number of new email users is not the only contributing factor to high email marketing ROI when it comes to revenue growth. The general affordability of this digital marketing tactic also makes it an attractive option for brands that want to grow, reach, and engage their target audiences, while still enjoying the fruits of their labour.
When it comes down to the amount of revenue your company can stand to gain through email marketing, Constant Contact reports that for every $1 a company spends on email marketing, they can expect to earn $38 of revenue on average. While a survey from eMarketer reveals that email marketing drives 25% of the overall revenues from those companies surveyed. The affordability coupled with the potential for excellent revenue growth makes email marketing one of the best digital marketing tactics for small businesses with limited marketing budgets.
With proper attribution, your company should be able to determine how much revenue is generated through your email marketing campaigns, down to the very email that finally convinced the consumer to make a purchase. Using email analytics to track and measure purchases made by consumers after they click on email content, you can add the sums of these purchases together to determine revenue.
If you are unable to track the exact revenue of each email directly, you can still calculate the average return on investment when it comes to email revenue. Multiply the number of conversions you have made through email by the value of an average order. This helps give you a better idea of how much revenue you are generating through your email marketing even when exact numbers are not available.