How to Calculate Email Marketing ROI

If you want to engage with more prospects online and build relationships that inspire them to buy, email is one of the most effective channels for accomplishing these goals.

Email marketing enables you to communicate directly with prospects in their inboxes and is incredibly efficient at re-directing users to your site in order to convert. As a result, it has an extremely high potential return on investment (ROI) of $44 for every $1 spent.

However, this type of ROI does not occur by luck. It’s the consequence of continuously reviewing and optimizing your campaigns over time, while maintaining a laser-like focus on your company objectives.

That is why, on this page, we will discuss how to calculate the return on investment for your email campaigns.

Why is email marketing so important?

Before we go into ideas for calculating your email’s return on investment, let’s review why email marketing is critical for achieving your business goals.

1. It’s cost-effective

Email marketing is particularly cost-effective when compared to other forms of marketing.

It does not require a large team with deep experience to send fantastic emails, and unlike previous techniques, it does not require paying for ad space. Indeed, it enables you to interact with qualified prospects for as little as a few bucks every campaign.

2. It allows you to connect with prospects right in their inboxes

Unlike traditional techniques, which rely on your target audience reading specific magazines or listening to specific radio stations, email marketing enables you to interact with qualified leads where they already spend their daily time: in their inboxes.

This is an excellent approach to boost brand awareness, educate people about your business, and offer them with the knowledge they need to become consumers.

Even if someone is not immediately ready to purchase, they are likely to read the material in your newsletters and remember your business in the future. They may even suggest your business to friends, family members, or business associates.

3. It’s easy to test and measure

Finally, it’s simple to test, review, and optimize your email campaigns in order to continuously improve your outcomes.

Email platforms like as MyEmailFX enable you to track critical email metrics such as open, click, and bounce rates, which enables you to learn about your subscribers’ preferences and how to tailor future campaigns to better match their needs.

Additionally, you can A/B test subject lines, senders, and even content, and utilize the findings to make data-driven changes.

How to measure email marketing ROI

While email marketing can be highly advantageous, if you’re like the majority of marketers, you want to know how beneficial your efforts are by tracking your return on investment.

To begin, you’ll need to install Google Analytics in order to track the sales generated by your email marketing campaigns. This will be simple if you’ve already integrated ecommerce sales into Google Analytics or built custom objectives with assigned dollar values. And if you haven’t already set up Google Analytics goals, we strongly advise you to do so immediately.

Once you’ve established your objectives, the simplest approach to track your email results is to navigate to the “Acquisition” tab. There, you’ll see an overview of your main channels, ranked by the amount of traffic they provide for your site.

Then, click “Email” to obtain a summary of the traffic generated by your email campaigns. You can quickly check how many goals were completed and how much revenue was earned by your entire email marketing efforts over a certain time period.

You may utilize UTM tracking to determine the outcome of a single email or a campaign’s emails.

After determining the money generated by your email campaigns during the specified time period, you can subtract your email investment for the same time period and divide the result by your investment. Then increase that figure by 100 to obtain your return on investment.

For instance, if you invested $50 in email marketing and generated $500 in sales as a result of your emails, your ROI would be 900 percent.

This is the procedure we followed:

  1. $500 in email sales minus a $50 email investment equals 450.
  2. 450/50 = 9
  3. 9*100=900% ROI

Of course, this is a simplified equation that ignores the additional objectives your email marketing contributes to, such as customer relationship building and brand awareness. However, if you’re looking for a simple approach to determine your bottom line, this might give you a good picture of how well your efforts are performing in general.

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