# How to measure ROI of Email Marketing campaigns

First of all, why calculate ROI? No strategy can be successful, without analysing its costs and earnings. Email Marketing is famous for its high return on investment and understanding this value can motivate any future investment.

Having specific informations about email campaigns, helps to outline its strengths and weaknesses points in any online marketing program.

The calculation of ROI will reveal you exactly how the acquisition cost per contact is made, like each campaign’s production costs reported to sales.

#### The formula.

Let’s start from the general mathematical ROI formula, a percentage value that calculates the ratio between costs and net profits:

ROI = (Revenue — Cost) / Cost x 100

A 3800% ROI, for example, indicates that for each \$ 1 spent, are obtained \$ 38 (have you read that this is the Email Marketing ROI calculated by a 2015 DMA research?).

Regarding Email Marketing the general formula is:

Email Marketing ROI = (revenue generated from email marketing — sale costs generated from email marketing — email marketing action cost)
/ marketing costs x 100

### How to calculate costs

The email is known as an economic marketing channel, but still requires a small starting investment. One of the best investments you can do for your DEM campaign is to rent a professional submission platform, that compared to traditional email clients, offers advantages both in deliverability and preparation of customized and advanced messages, statistics included. Remember to multiply this cost for the measurement period.

Even time has its cost, either yours or that of your employees involved in the creation and delivery of the message [(annual / per working hours salary) x hours of work], either that necessary to acquire a prospect database. Natural contact acquisition campaigns allow to obtain high performances, but require time.

That’s why the acquisition of an already profiled contact database, can affect the start of a good DEM. If it’s true that quality leads have a certain cost, it’s also true that this cost can be reduced (initially or periodically) by getting quickly profiled and legal contacts.

### How to calculate the revenue

When analysing ROI, you should consider a period of costs and revenues of at least 6 months (preferably 12). An Email Marketing campaign is normally composed of two dynamics:

#### 1. The impulse:

PRO: fast and profitably, produces quickly the desired action
CONS: the result can vanish as quickly as it’s been produced

#### 2. The impression:

PRO: generates a long term loyalty and a positive receptivity regarding the product or service.