What is the Average ROI of Email Marketing?

Email marketing, or the use of email to promote and grow a business, is one of the most popular digital marketing strategies among B2C marketers. According to HubSpot Blogs research, 89% of business leaders have used email marketing, and 74% have planned to use it in the near future. Furthermore, 72% of respondents said they plan to grow their email marketing efforts over the next six months.

However, not all email marketing is created equal, and trying to find the “one size fits all” approach to ROI can leave you wanting more from your digital marketing dollars. In fact, according to HubSpot Blogs research, only 29% of respondents look to email marketing to generate sales. In order to better understand the ROI of email marketing, let’s take a look at the various ways in which this digital marketing tactic can produce results.

ROI Based On The Demographics Of MyTarget Audience

One of the most popular ways in which people measure the success of their email marketing efforts is in terms of sales generated and/or leads generated. In other words, they want to know how effective their campaigns were in driving sign-ups or purchases. In this case, the ROI is typically expressed as the number of leads that became customers or the amount of revenue that a campaign generated.

If we look at the demographics of the respondents in the HubSpot Blogs survey who use email marketing, we can get an idea of how effective this strategy might be for certain groups of users. For instance, while 55% of users in the United States report using email marketing, only 31% of respondents in Brazil and the United Kingdom have adopted this practice.

ROI Based On The Mechanics Of MyVanity Website

In some cases, a business might want to track the effectiveness of their email marketing in terms of brand recall or how likely they were to make a purchase after receiving the email. In these cases, the ROI might be measured by the amount of time users spend on the company website after being sent an email compared to the amount of time spent before being sent the email.

For example, if a company’s website converts at a 1% rate and they send out an email to 100,000 people, then they can expect to see 100 new customers come to their site in the next thirty days. Using this metric, the ROI might be calculated as 100 new customers sold per month on average or $0.01 in value per user per day (based on a $30,000 sale).

ROI Based On The Type Of Content In My Email Marketing

If a business is looking for a single email marketing solution, then they might want to consider what type of content they should use to attract users. After all, not all emails are created equal, and what might work for one company might turn out to be ineffective with another audience.

In the HubSpot Blogs survey, 71% of respondents said they used email to promote products or services, and 66% said they used the platform to send out general news or notifications. While these are both useful applications of email marketing, it’s important to understand that each of these types of messages require a different type of approach. For example, promoting products or services through a marketing email might include the use of hyperlinks to take the reader to specific landing pages where they can purchase a product. In this case, the ROI would be measured in terms of sales generated and/or leads generated.

On the other hand, if we look at general news or notifications from an email marketing platform, we can expect that these types of messages will usually include some text and a handful of links to websites and/or social media accounts. In these cases, the ROI might be measured in terms of brand recall or how likely users are to engage with the content after they’ve received it. However, if the content is attracting a lot of attention, then the ROI might also be measured in terms of clicks and/or opens on the linked websites/accounts.

ROI Based On The Structure Of My Sales Funnel

A business’ sales funnel is the path their users take from initial interest to becoming a customer. The closer you get to the top of the funnel, the more valuable the leads become. For example, if we look at the hypothetical example above, we can see that getting 100 new customers to visit a company’s website is only the beginning. From there, they need to be guided through a sales funnel that eventually gets them into a buying decision.

If we look at the structure of the sales funnel in terms of what happens after the customer visits the company’s website, then we can determine the ROI of this particular group of users. In the example above, getting the user to visit the site is the beginning. Afterward, they need to fill out a form or make a purchase. In either case, the website visitors become lead magnets that eventually turn into sales.

ROI Based On The Tracking Of My Website Traffic

As noted above, getting visitors to a company’s website is the first step in the sales funnel. Afterward, there needs to be some type of conversion or action on the part of the user. In the case of our example above, the website visitor needs to either make a purchase or take some type of action that confirms they’re interested in the product (e.g., filling out a form, subscribing to the newsletter, etc.).

Once a user has taken this action, then they become a lead, and this is when the real value of the conversion lies. At this stage, the company begins to see the true potential of the web traffic they’ve acquired. From there, they can segment this audience into different groups and measure the effectiveness of their various campaigns and content.

To determine the ROI of a particular website traffic group, we need to look at two factors primarily: (1) What is the conversion rate? That is, what percentage of the leads taken through the website actually become customers? And (2) How much does this group value what they buy from your company?

If we go back to our example above, we can see that getting the user to visit the site and take some type of action is only the beginning. Afterward, we need to track what happens with these leads in terms of their engagement and interaction with your company. Are they becoming repeat customers? Are they telling their friends about your product? Are they actively following you on social media?

By tracking these questions, you can get a sense of how effective your various campaigns and content are in terms of convincing prospective customers to become paying customers. Furthermore, if we look at the structure of the sales funnel in terms of the value users associate with each step leading up to the conversion, we can get a sense of how much your product or service is worth to each group of users.

The Bottom Line

As you can see from the above discussion, there are many different ways to measure the ROI of email marketing. However, if we boil it all down, the single most important thing to keep in mind is that not all emails are created equal, and it’s important to find your target audience’s “sweet spot” when it comes to the type of content you use in your emails.

At the end of the day, the ROI of email marketing is closely tied to the demographics, mechanics, and structure of your sales funnel. As you continue to grow your email list and begin to see the benefits of this digital marketing tactic, try to always keep these key metrics in mind so you can determine how much value each group of users is associating with your company.

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