How to Find Your Email Marketing ROI And Why it Matters

Nick Mann
Nick Mann
Feb 26 · 4 min read

Return on investment (ROI) is the greatest metric to determine the success of any marketing campaign. From the amount of effort to put out, it allows platforms to be compared and changes in customers’ reactions. Considering email marketing has stood the test of time, it’s never been more relevant in determining the ROI of this channel.

What Is The ROI On Email Marketing?

The bottom line of ROI will always be the amount spent towards the channel must be less than the amount earned from it.

With email marketing, you’re enticing your subscriber to click on a link to your desired website. It’s essentially an invitation to what product or service you want them to purchase.

This, in a nutshell, is what ultimately determines the success of a promotional email campaign. The more people subscribe to your emails, the more chance they’ll open it, click on a link, and convert on the website they are sent to.

How Do You Calculate ROI In Email Marketing?

Once you know the amount invested in email marketing, you can then calculate the amount of profit you earned from the conversion.

Where the revenue of the sale is subtracted from the amount it takes for the customer to receive the product/service and the amount of that is then divided by the cost of the email marketing to see the amount of ROI per dollar.

The equation is: (Gained — Spent) / Spent = ROI

For example, if your business earns $1000 from an email marketing campaign after spending $100, then the ROI would be $9. This means per $1 spent in the email marketing campaign would earn $9.

Why Email Marketing ROI Matters

A common question I see business owners are wondering should they care about the ROI in email marketing when there’s social media, paid ads, and SEO?

Email marketing remains on top when it comes to ROI throughout the history of digital marketing. Compared to other forms it’s also the cheapest investment due to tools not being as much of an investment as well as on a platform you completely have control of. Email marketing rakes in money and leads to more business profits.

How to Use ROI Data

Every business owner will ask multiple questions when it comes to their customers. After all, they need to focus on the customers to effectively meet their needs and provide them the right service. These tend to be the most common questions:

  • Do the customers enjoy opening our email newsletter?
  • Is there anything we have done that has affected their opinion of our newsletter?
  • How can we improve our newsletter?

The power of ROI is the answer to these questions. The increase of an ROI of an email marketing campaign means that it was relevant to their needs. If it wasn’t, the ROI will be lower or none at all.

ROI changing from each and every email campaign is normal because generally speaking, no email being sent to the same person is the exact same. This means that there will always be some trial and error in understanding what it is to align your message with their needs.

For example, a shorter email subject line has noticeably gained more ROI than those that were longer, then it’s worth keeping it short. This is a factor that is tested and reviewed for every aspect of an email.

Improve Your Email Marketing

Since the biggest reason to do email marketing is to grow your business, reach more customers, and gain more profit.

This starts with every email marketing campaign by understanding what is it you want your customers to do and is it aligning with what they want to experience. There are even other metrics besides just ROI you can determine the improvement of an email campaign:

  • Lower your bounce rates — The people who never received your email
  • Improve your subject lines — The first thing they read from an email
  • Give a simple call-to-action (CTA) — what you want your reader to do

As you can see why ROI will always be the biggest factor and the metric every successful business owner knows as their job depends on it — because it does.

Final Comments

Email Marketing relies on your email list and like your website, is the only thing in the digital realm you have complete control over. It allows you to personally connect to your customers more so than social media, and the tool investments can be surprisingly inexpensive compared to other forms of marketing,

The ROI will continue to improve the more you understand the benefit and ultimately the existence of your business so your customer can open an email and know it was designed and written for them.

Need help with your email marketing? I’m currently available.

Nick Mann

Written by

Nick Mann

Freelance Web/Graphic Designer & Founder of TyypoPrints, Motivational Art Prints for Your Home & Office. @MannDesigner

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