ROI is the short form of return on investment. It means how much you get in return for a dollar you spent on something, and here it is all about email marketing.

Alright! Email marketing ROI – we have heard countless times that email marketing brings the highest return on investment (ROI) if you implement it in a true sense. You cannot harvest all the benefits when you don’t understand the workflow.

Many marketers say that email marketing is not as useful as it is said to be. In this regard, our humble suggestion is to revisit the techniques that you are applying. We are an eye-witness of many businesses that were on the verge of closure but took shelter under marketing through email as a final resort, and started making progress.

On average, email marketing can bring a $42 return on investment for every $1 spent. Now, let us put it another way, almost all marketing channels other than email marketing are expensive, and come up with multiple flaws.

One of the greatest flaws is that you cannot show your ad to limited users. It means that, for example, if you make television as a medium of advertisement for marketing purposes, you have to show the message to all and sundry. The viewership bracket can be defined in email marketing by creating the segments in your email list when you use email marketing automation software.

In this article, we shall discuss how can you calculate the email marketing ROI, keep reading.

Table of Contents

  • What is email marketing ROI?
  • Email conversion: what is that?
  • 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?

ROI is a measure to assess the effectiveness and productivity of an investment you made earlier.

The primary formula to calculate the ROI is:

(Amount gained – the amount spent) / amount spent = ROI%

ROI is the short form of return on investment. It means how much you get in return for a dollar you spent on something, and here it is all about email marketing. With the arrival of email marketing automation channels such as Mumara, it has become scalable to the full extent.

what is email marketing ROI | Mumara

When you use this marketing automation software, you can precisely track the effectiveness of your email campaigns including open and click-through rates, the number of unsubscribes, spam reports, engagements, etc.

It is near to impossible to get this kind of brief information using the other medium of marketing, i.e., social media, electronic, and print media blogging, or any other way of marketing. Email marketing provides you an opportunity to connect with your users in a one-on-one way, where you open up a two-way communication workflow.

When you give them an opportunity to the users to give their input and pay attention to what they have to say, it solidifies the bond between you and your customers. Then again, you can show the specific content to your users by segmenting them into different groups. Showing the right message to the right people is responsible to increase the above-discussed ROI.

Email Conversion: What Is That?

All the emails are not sent to the users for sales purposes. Some of them are welcome emails, survey emails, asking for feedback, testimonials, reviews, polls, emails sent to ask the users to download reports, etc.

Although these emails have nothing to do with the sales directly, they play a major role in the sales process. The reason behind this is that you are communicating with the users, building relationships with them, and asking them to take some actions.

This process will narrow down the sales journey and bring the potential customers nearer to the sales and conversions.

Some of the conversions from the emails include making a purchase, downloading a file, clicking the CTA mentioned in the email, sign-ups, website visits through the email, leaving reviews, or feedback, and checkout completion after returning to the abandoned cart through a follow-up email.

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.

gain on email marketing | Mumara

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%.

calculate return on investment
Calculate Email Marketing 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.

design your message for humans
Design your message for humans

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.

Best email marketing automation tool
Best email marketing automation tool

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.

Click to read more Email Marketing Blogs.

Sign up for Mumara.

Eric Lee

A reader, writer, researcher, and explorer!

View all posts

Add comment

Your email address will not be published. Required fields are marked *