ROI, or return on investment, is an essential metric for quantifying how effective your marketing efforts are. With an average of $ 38 earned per $ 1 spent, email campaigns virtually eliminate other methods of digital reach in terms of ROI, making it an impressive 3,800%. With this in mind, it’s clear that email marketing pays off when it comes to making every dollar you spend count.
The formula for calculating your own email marketing ROI should look like this:
Net profit (profits derived from email marketing – email marketing costs) / email marketing costs
ROI in Email Marketing is the cotton test. This measurement technique allows you to know first-hand the result of the actions of your email marketing strategy. Thus, the discoveries that emerge from a thorough analysis of ROI in Email Marketing will help improve email campaigns.
However, as seen in the table above, according to a study by Litmus, 70% of brands do not adequately measure ROI in Email Marketing.
The importance of ROI is due to the fact that it is an economic ratio widely used in the world of finance to monitor the profitability of income statements and the balance sheets of brands and companies. Therefore, the value of ROI as a ratio is that it serves as one of the best measurement and valuation factors.
ROI is always associated with an economic valuation of the result of strategic actions planned to achieve a series of objectives. Therefore, it shows in a simple and clear way what benefit has been achieved after investing a certain amount of the budget for the execution of specific strategies.
The great potential of ROI is, therefore, that it reports the real return obtained from an economic investment. It allows you to know for each euro invested, how many euros you have earned or generated. That is, how much have you sold.
Factors that affect ROI in Email Marketing
That the ROI in Email Marketing is above other channels is due to a series of factors. Some of the most interesting are:
- Wide critical mass. The huge mass of potential customers who use email. Today, everyone has at least one personal email account. It can be said then that email marketing is in a stage of full maturity due to the rate of users it has. In addition, users generally have a positive attitude towards the marketing actions they receive in their email inbox.
- It’s economic. These actions require very low investment. Not only the high number of users who use email is the only factor that allows a high ROI in Email Marketing. That it is an action that hardly requires investment makes it a very attractive possibility for the digital marketing strategy designed for the brand to achieve its objectives. The lower the investment, if conversions are achieved, the ROI will be better.
- Mobile is your ally. The mobile phone is today an indispensable tool for most users. These devices have marked the great change in recent years because they put the information they require at the fingertips of all users, at any time and place. According to an eMarketer study, 55% of emails globally are opened from mobile devices. This translates into millions of users who will be aware of your campaigns 24 hours a day, 7 days a week. A much greater impact than a few years ago.