Know your ROI
To budget correctly, it’s not enough to just know how much it will cost to implement and send email campaigns. You also need to know what your expected return on investment is. Calculating ROI is easier than you might think, in fact, Marketing Today offers a handy, free ROI calculator to help you figure out how much profit each campaign is generating. The formula is simple. Let’s say you are sending a campaign to 10,000 email addresses and the cost to do that is $250. You expect a 15 percent response rate and, of those 15 percent, you expect five percent of your subscribers to make a purchase averaging $50.00 each. 15 percent of 10,000 are 1,500 responses and 5 percent of that is 75 purchases. At $50.00 each, that means $3,750 will be made from the campaign. Subtract the initial $250 it took to send the emails and you’re left with a profit of $3,500. That equates to a marketing ROI of 1400%.
It is very important to set expectations prior to sending an email campaign and it is even more important to track the results so you know what your actual ROI is for each email campaign. If your campaigns aren’t producing the expected results, consider sending A/B split tests to a small percentage of your list prior to sending out the campaign. A/B split tests allow you to test different subject lines, graphics, offers, personalization and calls to actions to see which emails get the highest open, read, click through, and conversion rates. You can even test different days and times and different landing pages to see what works best for your subscribers. Tracking the results of the test campaign will allow you to send the email that generated the highest ROI to the majority of your subscribers.
To maximize email marketing ROI, you should also closely monitor and track the size of your list, subscriber churn, including hard bounces and unsubscribes, the revenue per email, and the overall cost per email to be sure you aren’t over-mailing to your list.