There is no scarcity of digital marketing channels available to the modern marketer in this technologically led era. In such a scenario, many times, you may find yourself wondering if email marketing is even worth it. Short answer, yes! No matter how many new and innovative digital marketing strategies, data mining techniques, and tactics come and go, email marketing has remained one of the top channels to reach and engage your target audience. This unchallenged success of email marketing can be attributed to its ability to provide attractive returns on investment. Email marketing is one of the few tactics that are so easily suited to businesses of all sizes. According to an eMarketer study, the average email marketing ROI is around122%. This figure is around four times higher than any other digital marketing channel.
What the Experts Say about Email Marketing
In the MarketingSherpa 2013 Email Marketing Benchmark Report 60% of participants agree that email marketing is producing an ROI. If you think this seems a bit too good to be true, it is understandable. Many respondents to the survey of marketing professions indicate that they agree on email marketing’s prowess in producing an ROI. But unless you can measure the returns, it is indeed difficult to believe and leverage it into your everyday marketing efforts.
The new focus across all marketing functions is engagement. Engagement regarding digital marketing can be described as the phenomenon when the intended user or customer clicks on what the marketer wants them to click on. The easiest way to break down email marketing’s return on investment is to evaluate how valuable its engagement was. It’s best to take a look at all the different aspects of your business and how email marketing helps in each of those.
A better way to evaluate email marketing ROI includes making a keen evaluation based on the following factors:
Was It Delivered?
To consider an email marketing campaign a success, you must first determine if the email was even delivered to customers and prospects. Seems like such an obvious step, right? Well, unless your message was delivered to the intended recipient, there is no chance that they will become a prospective customer for your organization.
A smart way to track if the email was delivered is to use tools like Return Receipt in Outlook (if your database is small and you’re doing it yourself). Signals by Hubspot and email hosting companies like MailChimp and Constant Contact will include the delivery confirmation information in their reporting. These confirmations will help you understand just how easy or difficult it is to get your message to the intended target. Numbers never lie and having tangible proof of your recipients gives you an idea of how stimulating and attractive your message is.
Review the delivery numbers on a regular basis. This will tell you if your message is getting through company spam filters and directed to the right recipients. According to Marketing Sherpa, the Delivery rate increases from 60% to 99% by separating inactive subscribers.
Hard Bounce and Soft Bounce
Opens and Clicks = Old School
It goes without saying that as a marketer, your target group opening the email you send is good news. It’s even better if they clicked on a link. But the true measure of the email’s success depends on whether or not they took the desired action. This could include anything from whether they opened the email to when clicked on a link. Factors such as when went to your landing page, and filled out a form to download a white paper, eBook, or other promotional offer matter. In short, any assertive action taken by the intended target is positive – this is ENGAGEMENT.
Executives want to know how much revenue is being generated from every marketing activity. By tracking engagement this process becomes possible. The best way to increase engagement is to create offers that are compelling. Compelling offers are ones where people will give you something in exchange for it. It’s that valuable! Are they willing to share their information in exchange for a free download, audiobook, webinar, etc? When you have a plan in place to guide your customer and prospects through your Top of Funnel (TOFU) to Middle of Funnel (MOFU) to Bottom of Funnel (BOFU) THAT is the ROI the C-Suite wants to see.
It’s All About Conversion
Almost every organization has a record of its past and present customers along with a list of probable and future customers called leads. Such records contain email addresses of individual customers including other critical contact information. Companies use these email addresses to target their customers with new offers, service information, and the latest products. Email-Marketing is gaining popularity day by day. As the email reaches directly to the client thus the rate of lead-to-customer conversion is quite high.
Now the determining factor here is how many conversions you are getting through your email marketing campaigns. There is a simple calculation behind it.
Simple ROI Calculation tip for Email-Marketing
The universal formula to calculate your returns is-
You can calculate your approximate ROI through the formula stated above. Check out the breakdown of the elements in this method represented below. You can very easily hunt down your investment as well as total ROI through the elaborated example below.
Breaking-Down Return on Investment
Suppose you have a database of 10K people whom you target through email campaigns and the per-customer profit is $100.Also, to acquire a lead, you spend up to $5, and your ratio of conversion i.e. lead-to-customer is 20%. It would bring your cost of acquiring 100 leads to $500 which translates to having 20 customers at $500. As assumed earlier, owing to a per-customer profit of $100 you will ultimately have a sales profit of $2k. Consequently, deducting the investment of $500, your net profit will come up to $1500. As far as lead-acquiring costs go, this is an amazing ROI.
The $5 investment you make to acquire a lead is the definitive cost you bear to grow your business. This investment may include your spending on marketing efforts such as Email Marketing. If by any means, you can lower this cost it would readily increase your profit margins.
One has to keep in mind that the formula for calculating Return on Investment and, its definition as well, has to be modified/altered to suit the actual situation and realities of your industry and individual organization. This definition must be as detailed and fleshed out as is possible. One must evaluate what is considered a return and what is considered a cost. The formula, in the broadest sense, only attempts to measure the profitability of the actual investments and, in the real world; there is no single perfect calculation that exists.
How to improve ROI through cleaner data
Yes, it is important to have a well-crafted email marketing strategy. Again, however meticulously you track the end result of the same, we can’t overstate the value of data. The whole scenario described above is dependent on a huge factor. This factor is the overall cleanliness and quality of your data. The database you use and focus your email marketing campaigns on must be clean. Clean data can be best described as data that is relevant, current, and contains the necessary information. The cleaner your data is the more will be your conversion rate of leads to customers. Apart from this, here are a few more tips to keep in mind while conducting email marketing campaigns.
Catchy Subject Lines
We have focused on the importance of the target recipient opening your email. However, you also must understand that they must have an incentive or motivation to open an email that is in their inbox. By including a catchy subject line, you’re raising the chances of them opening your email. Since this may be your only chance at grabbing the recipient’s attention, make sure you frame it right. Remember to craft your message in a way that generates curiosity and entices clicks.
Once your recipient opens your email, the job isn’t done and dusted. What’s inside the email counts for a great deal. This means that as a marketer, you need to focus on the message and content within the email. Depending on what the campaign is all about, you must craft your message. While some campaigns demand more text-heavy communication, don’t make it a habit. As a rule of thumb, keep your message short, to the point, and conversational. Readability and ease of understanding are very important for your email content. In the case of email content, your aim is to make it friendly for the reader. Don’t stick to using technical language, jargon, or unnecessary words to prove your competence. Remember, simple is always better.
Personalize the Message: An Email List Building Service Partner
Gone are the days when personalized customer experience was a one-off incident. Personalization of content, product offering, and every other aspect of customer communication is now the norm! Let’s look at a few statistics –
- On average, sales increase 20% when marketers use personalized experiences
- Personalized emails drive increased click-through rates by 14% and conversions by 10%
- Emails with personalization drive 6x more transactions
Calls To Action
The Bottom Line
Your ROI moves northwards when you possess cleaner data. Your Data starts getting older and irrelevant as soon as it enters your database. Consequently, you must clean and optimize it at regular intervals to keep it relevant and consistent. With all the primary jobs of handling your business, you can’t spare time for these odd jobs.
Thus outsourcing data-cleaning and email list building service need for professionals seems to be a perfect choice. This step will not only clean your database but help you boost your ROI with increased lead-to-customer conversion rates. Hence, your investment in acquiring leads drops considerably. Additionally, your existing e-mail list needs Data verification as well as updating. Such a step will ensure your email marketing campaign fetches the right clients through the least effort. Hence an email list-building service can help you achieve just that.