Almost every organisation has a record of its past, and present customers along with a list of probable/future customers called leads. Such records contain email addresses of individual customers including other critical contact info. Companies use these email addresses to target its customers with new offers and 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, but the breakdown of the elements of this method is represented in the following words. 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 per customer profit of $100 you will ultimately have sales profit of $2k and deducting the investment of $500 your net profit will come up to $1500 which is a healthy ROI as far as your lead-acquiring costs are concerned.

The calculation as mentioned above is a rough mathematics to calculate your ROI, but the basic logic works the same way.

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 it 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. It all includes what all things one includes in the form of returns and costs! The formula, in the broadest sense, only attempts to measure the profitability of the actual investments and, in the real world, there is no one perfect calculation.


How to improve ROI through cleaner data

But the whole scenario above is dependent only on one major factor; how clean/accurate your data is in your records which you intend on using for your email-marketing campaigns. The cleaner your data is the more will be your conversion rate of leads to customers.

Your ROI moves northwards when you possess cleaner data. Your Data starts getting older/irrelevant as soon as it enters your database which needs to be cleansed/optimised 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 to 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 rate, hence, lowering investment on acquiring leads. Additionally, your existing e-mail list needs verification as well as updation; it will ensure your email marketing campaign fetches right clients through minimum efforts. Hence an email list building service can help you achieve just that.

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