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email marketing ROI

What is Email Marketing ROI? Best Practices to Improve It

Marketing helps establish and grow business and that’s why we see entrepreneurs from all over the world investing heavily in it, especially Email marketing, which still leads the charts when it comes to that. And, why wouldn’t it be?

There are over 4.26 billion Email users at present and the more surprising fact is, not social media giants but Email marketing campaigns are the ones that help companies generate the most revenue. 

Furthermore, the average ROI of Email marketing campaigns stands at 3600%, which can go as high as 4400%, which means 44 times the amount you invest in it.

But that’s not always the case as you see it requires an effective strategy in place and its proper execution on the part of companies as well. But before we talk more about that, it becomes important to understand what Email Marketing ROI is and why it matters so much.

What is Email Marketing RoI?

Just as its name suggests, Email Marketing ROI (Return on Investment) means how much your company gains in return for all the investments it makes in creating and running Email marketing campaigns.

It comes in handy to know the efficiency and profitability of your investment in Email marketing campaigns, or we can say, it tells you whether they are on the right track. And what is most fascinating is out of all the marketing channels, marketing via Emails gives the highest ROI. 

Why Does Email Marketing ROI Matter? 

What’s the benefit of putting so much time and resources into Email marketing campaigns if you don’t know whether they are generating the expected results, right? As an entrepreneur or a marketer, it becomes important for you to track the performance of your Email marketing and check if everything is going right. 

And that’s where Email marketing ROI comes into the picture. Wondering, How? Return on Investment is a popular performance metric for businesses to assess the effectiveness of their marketing and promotion efforts. 

With it, you can easily compare the performance of your Email marketing campaigns, understand the changes in revenues they’re generating, and get an idea of the target audience to them. It helps you identify the weak points of your business and sort them out accordingly for more development. 

How to Calculate ROI of Email Marketing? 

Now that you’re familiar enough with Email marketing ROI and its importance for businesses, the time has come to know how to calculate it. 

Step 1 – Calculate Your Total Spending in an Email Marketing Campaign

Calculate Your Total Spending in an Email Marketing Campaign

Here, the very first task for you is to count all the expenses you do for a specific Email marketing campaign, which can include spending on advertisement, copywriting, designing, software cost, etc.

Things don’t end here as the above calculations alone won’t give you dependable results to get Email marketing ROI. Wondering, Why Not? Well, many times there are other factors as well to consider like the time each of your team members spend that you can take into account according to their salaries. 

Step 2 – Calculate Your Total Gain from that Email Marketing Campaign

Now that you know your investment, it’s time to add up all your gains from the Email marketing campaign and that becomes quite easy if you’re running an E-commerce business. You can take the help of tools like Google Analytics to track the sales coming from any specific Email marketing campaign over a period. Let us simplify this for you further.

You can calculate the value of a lead and then find the number of conversions. Once done, all you need to do is multiply both these figures to get the revenue that the Email marketing campaign brings to your business.  

Step 3 – Calculate the ROI of Email Marketing 

Now that you have everything to find out the ROI of an Email marketing campaign, all you need to do is use the given equation, and bingo!

(Total Gain – Total Investment)/Total Investment = Return on Investment

Let us take a situation here. For instance, you bear an expense of INR 1 lakh to create an Email marketing strategy and run it for a year. And in addition to these, you have a marketer working for you as well who takes INR 20 thousand annually. Now, your total spending is equal to INR 1.2 lakh.  

Now that the Email marketing campaign generates 400 leads in a year for your business and the cost of each lead is INR 900. This way, it brings you a total revenue of INR 3.6 lakh. The last step is using the above equation to get an ROI, like this –

(INR 3,60,000 – INR 1,20,000)/INR 1,20,000 = 200%  

Best Practices to Improve Email Marketing ROI 

Nothing is perfect in this world as there’s always room for improvement and this applies to Email marketing campaigns as well.

And, this is the reason we see every company out there putting in so much effort to make them more engaging and efficient to get better returns on their investment. To help you achieve that, we are going to share the most effective practices below. 

Grow and Maintain your Email Subscriber List 

Grow and Maintain your Email Subscriber List 

For the success of any marketing campaign, it’s crucial to know your target audience and when it comes to Emails, the subscriber list represents that. You need to constantly grow your Email subscriber as the more people, the better the range you get.

But at the same time, don’t forget to ensure the audience you’re adding is active because what’s the benefit of sending Emails to those, who for sure are not going to open them?

 For this job, you can take into use Email marketing software available in the market, such as NotifyVisitors, which not only help you create and maintain the subscriber list but also its segmentation for better targeting. 

It’s better that you put more focus on the audience, whose interests match your business and have a high potential to become loyal customers. Additionally, keep an eye on the responses the audience gives to your Emails and remove the section that does not show any engagement.

Ensure Email Deliverability 

You send tons of Emails but the majority of them end up in the Spam folder or get block-listed, what’s the benefit, right? This is where the importance of Email deliverability comes into the picture, which tells you about your ability to deliver emails to subscribers’ inboxes. 

Usually, companies face the issue of low Email deliverability because of factors, like subject line errors, poor Email copy, bad domain reputation, failed authentication, etc. Therefore, you better avoid them as much as possible. To boost it, we have given a few practices below that you can follow – 

  • Authenticate your email domain.
  • Maintain proper IP allocation.
  • Perfect the opt-in process.
  • Write non-spammy subject lines.
  • Keep the URL short.
  • Avoid spam traps.

Besides these, you can consider adding an unsubscribe button, which the people, not interested to receive your Emails further, can use to opt out of the subscriber list. This way, they won’t get angry and report your domain as spam.

Choose an Email Marketing Software

Choose an Email Marketing Software

Running an Email marketing campaign efficiently on your own can prove to be quite trouble when there are thousands of subscribers in the list and this is where having an effective Email marketing software can turn things in your favor.

It can help you automate most of the tasks, which usually take a lot of effort and time when done manually, hence nothing to lose but everything to gain. 

Now if you’re confused about which one to choose as the options are many, then don’t worry, we’ve got you covered. Given the features and the pricing, NotifyVisitors is the most preferred Email marketing platform at present. And let us tell you why. With it, you get the following features – 

  • Automated campaigns
  • Targeting customers with market segmentation
  • Personalization
  • Easy to integrate with multiple platforms
  • Drag and drop editor 
  • Customizable templates.
  • A/B testing to analyze the performance of different versions of Emails

Audience Segmentation for Better Results

As an entrepreneur, you will always find the interests and preferences of one section of customers different from another one and why wouldn’t it be such a case?

Telling vegetarian people about the different varieties of meat or targeting men with beauty products may not get you the response you expect because this violates the prime rule of any market – the products/services you offer to supply don’t match the demand.

All these make the segmentation of the audience crucial and this can be done based on the characteristics they share, such as age, gender, location, earnings, preferences, etc. And, you’d be surprised to know with this, you can manifold the Email marketing ROI. 

Make Email Content Interesting and Appealing

There is a famous saying, ‘Content is the actual king of the marketing world’ and it’s true because no matter what you do, if the recipients don’t like what you write in the Emails, then that’s a problem. Here, you can hire a copywriter, or else you can write the Email copy on your own as well.

All you need is to ensure it is something that the recipients like to read. 

There are a few AI tools as well, which can help you in this area but don’t rely on them completely as a human touch is necessary. Furthermore, you can use a bit of humor where there is space for it.

To make this easier, we have given a few tips down below to write like a pro to improve Email marketing ROI – 

  • Keep subject lines short and catchy.
  • Tease incentives and a hint of curiosity in the preheader text.
  • Do personalization, wherever possible.
  • Avoid difficult words to improve readability.
  • Maintain relevance.
  • Use interactive elements like GIFs, videos, images, quizzes, games, etc.
  • Ensure Call-to-Action stands out from the rest of the content. 

Choose the Best Timing to Send Emails

“What’s the best time to send Emails to the target audience?” This is one question you should definitely keep in mind otherwise you would be seriously undermining the potential of your Email marketing campaign to generate high ROI. Given the trends going on for years, Emails sent in the morning perform really well. 

But that’s not always the case as different sections of the audience may respond differently. For example, subscribers of a young age usually prefer to check their Emails in the evening. Therefore, you should take care of all the factors while deciding the timing to send Emails.

Conduct A/B Tests to Analyze the Different Versions of Email Elements

Many times companies make Email marketing decisions based on pure hunches and that’s not something to promote, especially when an Email marketing software, like NotifyVisitors, gives you the option of A/B testing, which lets you compare the performance of different versions of Email elements.

The motive behind this is to identify top-performing features that work best for your target audience.

With A/B testing, you should check all of the major email components:

  • Subject lines: By length and style
  • Copies: By length and content type
  • CTA: Links vs buttons
  • Timing: Best day/time to send a newsletter

Track the Performance of the Email Marketing Campaign 

Track the Performance of the Email Marketing Campaign 

Let’s say you are completely capable of creating and running an amazing Email marketing campaign now, but what about tracking its performance to know whether things are going as per your expectations? 

Analyzing the results of your Email marketing can help you understand the areas of it that are doing fine and where you need to bring improvements to improve the level of engagement and effectiveness. Now, the question arises of how to do this task. Well for that, you can find out a few performance metrics give below – 

  • Open Rate – Measures the percentage of subscribers who open a specific email out of the total number of subscribers.

  • Click-through-Rate – Measures the percentage of subscribers who click at least one link given in the Email.

  • Conversion Rate – Measures the percentage of subscribers who take the required action in your Email marketing campaign. 

  • Return on Investment.

  • Sharing Rate – Measures the percentage of Email recipients who share your Emails on social media platforms or forward them to their friends. 

Conclusion 

It’s a good sign that you want to improve your Email Marketing ROI and we believe the practices given above will surely help you do that or at least give you a great start. Always remember success in Email marketing doesn’t come overnight as it seeks a lot of time and effort on your part. 

This may include growing and maintaining the subscriber list to effective copywriting, and whatnot, especially when the competition in the market is so high. At the same time, don’t get demotivated if you don’t get good results right away. Patience and persistence are the major keys and with them, you can do amazing things. 

FAQs

What is email marketing roi?

Email Marketing ROI (Return on Investment) means how much your company gains in return for all the investments it makes in creating and running Email marketing campaigns. 

2. Why Does Email Marketing ROI Matter?

Return on Investment is a popular performance metric for businesses to assess the effectiveness of their marketing and promotion efforts. With it, you can easily compare the performance of your Email marketing campaigns, understand the changes in revenues they’re generating, and get an idea of the target audience to them. 

3. What are the best practices of improving email marketing roi?

Here are a few best practices of improving email marketing roi.

  • Grow and maintain your email marketing list
  • Ensure email deliverability
  • Choose an email marketing software
  • Audience segmentation
  • Make email marketing appealing

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Shivani Goyal

Shivani is a content manager at NotifyVisitors. She has been in the content game for a while now, always looking for new and innovative ways to drive results. She firmly believes that great content is key to a successful online presence.