In the first article in our digital marketing ROI series, we briefly covered digital marketing ROI measurement overall. Over the next several weeks, we will look at more specific digital marketing solutions and discuss the analysis of each. For this second article, we will focus on email marketing. As a business, you understand that the old saying is true, you must spend money to make money. What is not mentioned in that tidy phrase is the importance of knowing that what you spend money on is actually making you money. Understanding the ROI for your email marketing efforts is a critical component in your overall digital marketing strategy for many reasons. Knowing which aspects of your approach are performing best is crucial to make wise decisions regarding your investment and illuminates where your money is best spent.
Email marketing is the delivery of your message directly to a selected group through an email message campaign. Email marketing can be used to reach many goals including increased sales, improved brand awareness, expanded brand loyalty, and many others. Measuring the effectiveness of your email campaigns is similar in many ways other forms of digital marketing. A comparison is made between the amount you spend on your email messaging and your return. Generally, that return is calculated based on revenue and profit. Email marketing measurement is usually focused on the amount of sales that are related to the particular email marketing campaign.
Measuring Your Email Marketing ROI
When measuring email marketing, it is important to have patience. Your email blast will likely have an immediate effect, and you will see relatively soon the initial effectiveness of that particular message. However, it is also important to account for the delayed response. Your email may sit in someone’s inbox for weeks or months before the individual takes action. Another important consideration, especially for retail businesses, is the possibility of offline sales as well. A person may choose to come to your store, for example, rather than purchasing through the email or your e-commerce website. Additionally, an individual may not be persuaded by a single email. Email marketing is powerful because you can target a prospect with repeated messages over time. It is wise to set a specific timeframe for your measurements. Email campaigns will often build momentum over time, and a good rule of thumb is to track your campaign’s effectiveness for at minimum one to two years. While this may seem to be a long period to be spending money without knowing your return. You can still see indicators at any time if you are accurately tracking throughout your set timeframe.
The Value of a System
To track the effectiveness of your email campaign, you need to have a robust system in place that will differentiate your email marketing return from your other digital marketing methods. If your business sells a product online, this system can be very simple. By directing your targets to a particular landing page through the email. You can be sure that any sales coming from that landing page are a result of your email campaign. Offline sales and services are a bit harder to track. One of the most effective methods is to ask your customers or clients how they learned about your business and record it. Another way that works well is to set a specific price point, ask the reader to mention the email, or otherwise integrate some determinant factor in your email. Include something that will exhibit that a particular transaction was a result of your email campaign.
Email Marketing Campaign Analysis
At the end of your set timeframe, ROI measurement data must be analyzed. First, determine all sales resulting from the email campaign and add them. Next, determine all your expenses related to your email marketing and add them as well. Remember to account for any design or content fees, the cost of your email marketing service and any employee hours spent working on the project. Subtract the cost of your product or service and your email campaign expenses from the total sales generated. That value should then be divided by the email campaign expenses to determine the percentage of return for every dollar spent. When you have determined that number, your analysis is not yet finished. You can use your information to help project how improvements may increase your email marketing ROI.
Email marketing is an incredible tool that can provide your business with exceptional benefits. However, success only comes through careful planning, outstanding delivery, and intelligent tracking and analysis. A digital marketing firm is a valuable addition not only to the success of your email campaigns, but also for the analysis, testing, and fine-tuning to experience the best possible results. A digital marketing company with experience and skill is an investment that will save you time and money, and also improve the effectiveness of your campaign to increase your ROI.
At Cohlab, we fully understand the importance of knowing your email marketing ROI. That is why we do take the time to ensure you understand the process and analysis of your campaigns. We “cohlaborate” with you on proving out your email marketing ROI, and our strategy has been greatly successful for our email marketing clients. Use our complimentary Digital Marketing Scorecard to gain valuable insight on how your website rank compares to others. Our team would love to speak with you and answer any questions you may have. Our mission is to provide you with Cohlaborative digital marketing solutions to meet your organization’s needs.