How to Calculate Email Marketing ROI: A Step-by-Step Guide 2024

Curious about the true power of email marketing and how it impacts your bottom line? You’re about to find out.

Email marketing isn’t just surviving in the digital age—it’s thriving. We’ve pulled together some eye-opening ROI statistics that prove why this channel remains an essential tool for marketers in 2024.

Ever wondered:

• How much bang you get for your buck with email marketing?
• If email marketing truly outperforms other marketing strategies?
• What the latest trends in email usage are?

You’re in the right place. This article will clear your queries and more, backed by data from reputable sources. From the incredible returns on investment to the role of mobile devices in email opens these stats will show you why email marketing is a powerhouse in the marketing world.

So, let’s jump right into the top email marketing ROI statistics for 2024:

• For every dollar spent, email marketing generates a whopping $42 in return.
• 60% email open rate on Mobile devices.
• Email marketing is the go-to strategy for 64% of small businesses aiming to reach their customers.
• An impressive 89% of marketers say email is their primary channel for lead generation.
• 82% of marketers globally use email marketing.
• 99% of email users check their emails daily.
• Building and utilizing email lists have led to a 760% increase in revenue for professional marketers.
• With half the world’s population having an email address, there are 4.3 billion email accounts worldwide.
• Astonishingly, 4 out of 5 marketers would rather abandon social media than give up email marketing.

Table of Contents

• What is email marketing ROI?
• Importance of measuring ROI.
• Email marketing ROI, and how to calculate it?
  • Calculate the gain
  • Calculate expenditure
  • Calculate return on investment
• How to improve email marketing ROI?
  • Run split testing
  • Consider your audience human beings
  • Keep an eye on the performance of the email
  • Segment your email list
• Use Mumara for your email marketing process
• Final words

What Is Email Marketing ROI?

Return on Investment (ROI) in email marketing measures the financial gain or loss generated by email campaigns relative to the amount invested. Essentially, it tells you how much profit you earn from your email marketing efforts compared to the costs involved.

To calculate ROI, use this formula: ROI = (Amount gained – the amount spent) / amount spent = ROI%

In this formula, “Revenue” is the total income generated from the email campaign, and “Costs” include all expenses related to the campaign, such as software subscriptions, content creation, and labor. Calculating ROI allows you to evaluate the profitability of your email marketing efforts, providing valuable insights into the effectiveness of your campaigns.

Importance of Measuring ROI

Measuring ROI in email marketing is crucial for several reasons:

1. Evaluating Campaign Success: Understanding the ROI of your email campaigns helps you determine which strategies are effective and which need improvement. It provides a clear picture of how well your campaigns are performing.
2. Informed Budget Allocation: By knowing your ROI, you can allocate your marketing budget more effectively. This ensures that your resources are invested in strategies that yield the highest returns, optimizing your marketing spend.
3. Justifying Investments: ROI data provides concrete evidence of the value of your email marketing efforts. This information is essential for justifying your marketing expenses to stakeholders and securing future funding.
4. Enhancing Efficiency: Analyzing the ROI of different campaigns helps identify the most efficient strategies. This allows you to streamline your processes and concentrate on strategies that yield the most effective outcomes, improving overall efficiency.
5. Strategic Decision-Making: Knowing your ROI helps inform your broader marketing strategy. It allows you to determine goal and check progress, and adjust tactics based on what’s delivering the best results, ensuring continuous improvement and growth.
6. Tracking Long-Term Progress: Regularly measuring ROI helps you monitor the performance of your email marketing campaigns over time. This ongoing assessment can reveal trends and patterns, providing insights that guide future campaigns and improve overall performance.
7. Identifying Growth Opportunities: Analyzing ROI can highlight areas with the most potential for growth. For instance, if a particular type of email or audience segment shows higher engagement and conversion rates, you can focus more efforts on these areas to boost overall performance.

Email Marketing ROI, and How to Calculate It

The calculation of email marketing ROI is easier to calculate when you know your marketing goals. Marketing through email is one of the most effective methods to directly communicate with your users in a cost-effective way.

When you set goals and apply email marketing, the ROI is dependent on what you expect as an outcome. The measurements are both easy and difficult to calculate according to the set targets. For example, it is easy to calculate sales, but hard to gauge brand awareness.

Here are some of the measurements that exist to calculate the ROI:

Calculate the Gain

Calculating the gain in email marketing is easy when you use an Email Service Provider (ESP) integrated with Google Analytics. If you have an online store and send email marketing campaigns to the users with an effective tracking method such as Mumara, you will be able to track the open and clicks through rates in real-time.

If you find any issue with the success of your campaigns, you can change the strategy to make it more powerful. The stats will tell you briefly how many email recipients visited your website. Mumara can help you track the movement of your visitors on the website.

In this way, you can showcase the products your users take more interest in by using the landing pages. You may have many products or services displayed on the website, previously it was difficult to show a specific one to the users. Today, it is possible.

All you need is to use a readymade landing page on Mumara, and show the users what you offer. Interestingly, you can use different landing pages for different products. Come back to the point. When you analyze the data from Google Analytics, you can trace the conversion liked your email campaign.

Calculate Expenditure

Calculation of your expenditure on email marketing campaigns is the primary factor to calculate the ROI. This is process is simple when you calculate the amount you spent, but there are many other factors come along that need attention, including the time spent.

Your Email Service Provider is one of the obvious expenses that can easily be counted. But your ESP cannot do everything all alone. There is an effort by the behind-the-scene team which designs an email and spends hours on the conversion process.

To put it simply, you can calculate the expenditure spent on the ESP plus the expenses spent on the time during that particular time until the final results.

Calculate Return on Investment

After getting the above data, now is time to apply the formula that we discussed in the above lines, i.e., (Amount gained – the amount spent) / amount spent = ROI%.

Let us assume you spend $100/month on your email service provider, which turns $1200 per year. Along with it, you have an email marketer, who spends 2 hours daily, 5 days a week for the $10 per hour. It means that you are paying $4800 per year to the marketer.

Now, if we calculate the total expenditure on email marketing, e.g., $1200+$4800, it will be equal to $6000 a year.

If the cost of the lead is $80 and the leads you get from the email campaign are 250 a year, it will become $20000.

Now let us calculate: ($20000-$6000)/$6000 = 233.33%.

How to Improve Email Marketing ROI?

After getting an understanding of how to calculate the ROI on email marketing, now we can shift to learning various methods of how to improve it. We have compiled some of the tested ways to improve the return on investment in email marketing.

Read them one by one:

Run Split Testing

A/B testing or split testing is the best way to find the finest variant of your email. Look, email marketing is successful when you take some pain to make it successful. Flooding your users’ mailboxes without keeping the point in mind whether they will like it or not will not give any benefits to you.

Sometimes, brands send emails without knowing the taste of the users. When they send it, they do not get the results of their choice, resulting in failure, and they curse the email marketing instead of working on the strategy.

That is not a professional approach. By running a split test, you select the best subject line, email copy, email design, CTA, etc.

Consider Your Audience Human Beings

“Consider your audience human beings”, you can feel surprised after reading this statement. You can say that we always send emails to human beings. That is right! But the question arises that why you use robotic content in your email body. Let us make it more clear.

When you send an email campaign, read the email body twice, and ask yourself, “can I send it to my family or friends?” If the answer is positive, you can go ahead. If it is otherwise, edit your email and design it the way you send it to your friends. What could be the benefit? It will increase engagement, and develop the relationship between the brand and the users.

Keep an Eye on the Performance of the Email

If you don’t bother about the performance of your email and don’t take stats into the consideration, you are standing on the wrong side.

Track the open, clicks, and engagement, it will give you an opportunity to improve the marketing campaigns where needed. If the stats are giving a positive outlook, you don’t need to bother about the ROI every day or every week.

Segment Your Email List

Email list segmentation is one of the greatest blessings. When you create segments, they act like virtual email lists. Sending emails on these segments enables you to send the right information to the right people at the right time.

Use Mumara for Your Email Marketing Process

Mumara is an intelligent email marketing automation tool that comes up with all the necessary features you can think about. From email list creation & management to designing an email, and sending it to the people of your choice after segmentation, you can perform everything.

Mumara has introduced custom criteria, where you can narrow down your audience while scheduling your email campaign. along with it, you can track the movement of your visitors on the website using Mumara Tracking Pixels, and send them targeted emails based on their behavior.

We are not finished yet! If you want to display a specific service or product, no problem, use the Mumara landing page for this purpose. Further, we come up with readymade templates for your email campaigns with full authority. What else do you need for your email marketing process? Sign up today!

Final Words

Email marketing is highly result-oriented when you do it correctly. It brings a lot of benefits for you that are essential to boost your business. You can improve sales, drive traffic to your website, and increase brand awareness within no time.

More than four billion people use emails, and that is a huge number, all you need is to deploy your strategy most finely on the segments after running the A/B testing, and we assure you will get a better email marketing ROI.

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