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How to Calculate and Improve Email Marketing ROI

There are lots of different digital marketing strategies that you can use to reach your target audience. One of those strategies is email marketing, which is exactly what it sounds like — you send out emails to prospects and nurture them toward becoming customers.

But email marketing costs time, effort, and — often — money. So, you may be hesitating to use it. How can you be sure that the benefits of this strategy will be worth the costs? To answer that question, you can calculate email return on investment (ROI).

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What is email marketing ROI, though, and how can you calculate it? Those are just two of the questions we’ll answer on this page. Overall, we’ll cover the following:

Keep reading to find out more. Then, speaking of email, be sure to subscribe to Revenue Weekly to have more helpful content delivered straight to your inbox!

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What is email marketing ROI?

Email marketing ROI is simply a measurement of how much money you make from your email campaigns compared to how much they cost you. It’s basically a measure of profit — are you earning more from your emails than you’re spending on them? And if so, how much more?

Why does email marketing ROI matter?

Email ROI is important for an extremely simple reason: It shows you how much value your email strategy brings to your business. A high ROI shows that your emails are bringing in lots of profit. On the other hand, a low ROI indicates that your email marketing needs improvement.

By keeping an eye on this metric and reoptimizing when it gets low, you can ensure that your email campaigns are driving the results you want.

What is the average ROI of email marketing?

The ROI of email marketing varies across different industries and companies. Having said that, the average email ROI across all industries tends to fall somewhere between $30 and $45 per dollar invested. To be more specific, the average email marketing ROI is around $36 per dollar invested.

That means that on average, an email marketing campaign will return $36 in earnings for every dollar you spend on the campaign. That’s pretty high!

Expert insights from webfx logo

Black and white portrait of a young woman with shoulder-length hair smiling slightly at the camera.
Emily Sybert WebFX Internet Marketing Specialist — Email Specialty

“Email is known as one of the most effective forms of marketing in terms of ROI because it reaches your potential customers and leads where they are every day — in their inbox!”

Of course, this is just a market-wide average. Your own email return may be much higher or lower depending on your industry and your approach to email marketing.

How to calculate your email marketing ROI

To make decisions based on your email ROI, you first need to know what that ROI is — and for that, you need to calculate it.

Calculating the ROI of email marketing is pretty straightforward. First, choose which period you want to use to calculate your ROI. For example, maybe you’re looking for the ROI of your email campaigns in the past quarter.

The next step is to figure out how much you spent on email marketing during that period, as well as how much revenue you earned from it. Once you have those numbers, just use the following formula:

Email marketing ROI = total earnings from email / total spending on email

For example, let’s say you earned $3000 from an email campaign that you spent $300 on. To calculate the ROI of that campaign, you simply divide 3000 by 300, and the result is $10. That means you earned $10 for every $1 you invested.

How to improve your email marketing ROI

Once you’ve calculated your email return, the next step is to improve it so you can earn even more revenue. To do that, you’ll need to optimize your email campaigns to reach your audience more effectively. But how?

Below, we’ll go over four tips you can use to improve your email ROI. Those tips include:

  1. Personalize your emails
  2. Use email marketing tools
  3. Optimize for mobile
  4. Track email KPIs

Read on to learn more about each of those tips!

1. Personalize your emails

One of the best ways to make your emails more effective is to personalize them. One way to do that is segmenting your email audience. Instead of sending out emails to every single one of your leads and customers, send out different emails to different groups.

You might segment your audience by location, interests, demographics, or stage of the funnel. Whatever it is, segmenting your audience lets you create more specific emails that tailor to each individual group. That makes them more likely to engage with you.

Expert insights from webfx logo

Black and white portrait of a young woman with shoulder-length hair smiling slightly at the camera.
Emily Sybert WebFX Internet Marketing Specialist — Email Specialty

“Personalization is the key to generating a high ROI — we don’t want to treat our subscribers as just numbers, we want to make our messages as relevant and personalized to them as possible. So, A/B testing things like first name personalization, segmenting email lists based on the subscriber’s interest as selected in the preference center, and showing different imagery or content based on the subscriber’s demographics are all good examples.”

2. Use email marketing tools

Sending out each individual email manually can be a lot of work. It can also take away time from other things you could be working on. Thankfully, there are tools that can help you with this process.

Different types of email software exist to help you more quickly create your campaigns, segment your audiences, and automate the process of sending out your emails. By taking advantage of these tools, you can streamline the entire email marketing process and increase your email ROI.

3. Optimize for mobile

You probably know that mobile optimization is important for your website. But it’s also important for your email campaigns. A lot of people check their email on their phones, so you need to make sure you’re sending out mobile-friendly emails. Otherwise, they won’t be very effective at reaching people.

If you follow the previous step and get some good email marketing tools, this shouldn’t be too hard — many tools allow you to quickly and easily design emails that work for both desktop and mobile devices.

To ensure good mobile optimization, make sure you consider things like:

  • Image dimensions
  • Button size
  • Link placements
  • Font size

All of these things should be optimized to fit on mobile screens.

4. Track email KPIs

Finally, it’s essential to track email key performance indicators (KPIs). These are metrics that let you see how well your email campaigns are performing.

ROI is one of those metrics, but there are several others as well, including open rate and click-through rate (CTR). You can also use email analytics to track the progress of individual leads through the funnel as you market to them. Tools like customer relationship management (CRM) platforms are great for this.

Expert insights from webfx logo

Black and white portrait of a young woman with shoulder-length hair smiling slightly at the camera.
Emily Sybert WebFX Internet Marketing Specialist — Email Specialty

“For lead gen clients, it’s important to use a CRM and email platform that integrate so we can see how email acts as a touchpoint at each stage of the sales journey and how email is facilitating closed leads and ROI. We can follow the lead through their journey, send them relevant and timely emails at each step, and ultimately move them through the sales process until they become a closed lead to generate ROI.”

Email analytics is critical for showing you where your campaigns are performing well and where they could use improvement. That allows you to continuously optimize your emails to drive a higher ROI.

Our digital marketing campaigns impact the metrics that improve your bottom line.

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WebFX has driven the following results for clients:

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$6 billion

In client revenue
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24 million

Leads for our clients
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7.14 million

Client phone calls

Get help driving up your email ROI with WebFX

If you really want to upgrade your email marketing ROI, consider partnering with a professional agency. Sometimes, there’s nothing better than getting help from people who have been working with email marketing for years and know all the ins and outs of the strategy.

Enter WebFX. We’ve been driving digital marketing results for our clients for over 28 years, so we know exactly what it takes to build a better email campaign and boost your ROI.

Interested in partnering with us for our email marketing services? Just give us a call at 888-601-5359 or contact us online today!

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