ROI in Email Marketing is $38 for Every $1 Spent

It’s true that ROI in email marketing is huge, but did you realize it could reach 3,800%? That’s an average among companies that use email marketing, too. If you play your cards right, your return could be even higher. So why do people spaz out over the latest social media feature when email marketing does far more for business’ bottom lines?

Good question.

Few people think to ask, but it’s the key to scaling your operation. Email should be a core part of your digital marketing strategy. It’s one of the most important channels in the small business marketing playbook. Follow along to see how you can get $38 back on every $1 you spend with it.

 

Email Reaches Customers Where They Live

Marketing is about sending the right message to the right person in the right place at the right time. That’s also true of sales, which is why good marketing feeds into your sales funnel with qualified leads. Everybody has an email address. That means you’re always reaching people where they live. They need emails for work, to shop on Amazon, to use online banking, and to login to most of the apps on their smartphones.

For the smart cookies who sign up for apps with Facebook: you need an email address to use that, too.

An email inbox with 5 marketing emails highlighted compared to 1 personal email.

People use email for business and shopping on a monthly basis—sometimes even daily. Inserting yourself into their inbox at the right time of day with a solution to their problem is very possible—and yes, modern email marketing platforms let you see when your audience opens their emails (but not individually—that would be creepy). Not only does email marketing give you that proximity, but you can use analytics to see when most people open their messages… and then optimize your campaigns for it.

 

ROI in Email Marketing Makes it the Most Cost-Effective Channel

Cost is always relative to your return on investment, which makes email marketing a go-to strategy for small and medium businesses. The low cost isn’t just relative for email marketing, either. Certain email platforms out there are actually quite affordable—as low as $15 per month to get started on your first marketing list.

Pro Tip: Stay away from bloated email platforms for enterprise, like Infusionsoft. You can get much better value for your money with ActiveCampaign (my personal favourite) or Drip.

Your costs will rise with the size of your email list, but that cost stays low relative to the ROI in email marketing campaigns. The ActiveCampaign pricing system starts off at $15 CAD per month for a list of 500 contacts. It only increases to $35 CAD per month when you hit 1,000 contacts, and a list of 2,500 contacts only costs $60 per month. If you’re using this channel to nurture leads and bank on the high conversion rate for sales, then the cost of the software won’t bug you.

The pricing table for ActiveCampaign, email marketing software with a high ROI.

The best part is that you own your email lists, and no one can take them away from you. Not even your email software vendor. Growing a serious social media following on Facebook or Twitter requires money just to acquire followers (combined with genuinely good content and social savvy), and then they want you to keep paying into their ad platforms every time you want to reach them. In contrast, you could make hundreds or thousands in sales every month for a flat rate through email.

What’s better: pouring $200 per week into Facebook for a chance to reach prospects, or paying $15 per month to land right in their inboxes? Social media will only ever be leased space, whereas your email lists are yours forever.

It’s no contest.

 

Email Automation Removes Tedious Administration

Perhaps the greatest part of ROI in email marketing is the ability to automate it. Your first steps will be creating email templates that you can re-use for a consistent brand presence in your prospects’ lives, but it goes so much deeper than that. You can establish 1:1 customer relationships at scale with automated campaigns. That’s incredibly powerful.

Email marketing isn’t about sending “blasts” to your entire audience. In fact, “email blast” is a dirty phrase. One size does not fit all, and whoever uses it unironically has a lot to learn about digital marketing.

Screenshot of an Urban Dictionary definition of "email blast." It's not flattering.

Automation solves this by triggering specific emails containing personalized tokens (like the lead’s first name) to deliver what they need when they need it. Those leads should also live in relevant lists and have moderate segmentation data attached to them as well.

A basic email automation with two triggers and three steps inside ActiveCampaign.

You can categorize leads fluidly based on their actions, such as:

  • Opening an email (or not)
  • Clicking on a specific link
  • Downloading an attachment
  • Where, why, or how the lead signed up

You can automatically qualify leads based on their cumulative actions with lead scoring, too. This means that, if you take the time to set it up, you can progress leads all the way to the point of sale without having to put in the huge time investment yourself to make the sale with each individual. Trust me on this one—it’s a lot better than manually keeping tabs on hundreds (or thousands) of potential customers by hand.

A three-step email automation example created inside Drip.

That scalability makes email a core part of digital strategy for every serious business out there for good reasons:

  1. Email boasts one of the lowest costs for small business marketing.
  2. Email scales with every size of operation.
  3. Email yields higher returns than social media posts or hosted events.

 

What Email Marketing Can and Cannot Do for Small Business

“Fantastic! Why don’t we just grab as many email addresses as possible?”

That’s a valid question, and there are a few ways to accomplish that.

ROI in email marketing is probably the highest of any digital channel, but it’s not an acquisition channel. You shouldn’t be trying to find new leads with email by hunting down addresses yourself, or asking customers to forward things to friends. Email marketing works best for small and medium businesses for leads already in their funnels. Oh, and never, ever buy email lists. It’s an invasive practice and it doesn’t even generate sales.

Screenshot of email lists organized according to their industry.

Frankly, B2C businesses don’t have the time to ask prospects for emails one at a time. That would be insane. On the other hand, buying email lists violates all kind of data privacy laws, such as Europe’s General Data Protection Regulation and Canadian Anti-Spam Legislation.

GDPR legal interpretation highlighting the first sentence under the Penalties section: "Organizations in breach of GDPR can be fined up to 4% of annual global turnover or €20 Million..."

Pro Tip: Purchased email lists are always useless. I’ve watched multiple clients and agency bosses try to make them work, but they just end up wasting their money. The “leads” are alienated and have no relationship to you or your brand. They’re just random people with no measurable interest in your products or services. That means they won’t open your messages, they most certainly won’t buy anything from you, and they might even flag your email address’ domain as spam. Ouch.

Don’t be one of those people.

 

How Do I Start with Email Marketing?

Excellent! Start with these tips and then a process.

First, stay away from big, bloated platforms for enterprise, such as Infusionsoft—they won’t give you great value for money. Also stay away from MailChimp; yes, it’s free, but it’s confusing, severely limiting, and frustratingly puritanical about sourcing your email leads.

Choose ActiveCampaign or Drip. They’re both priced very reasonably and actually do what you need them to do. It’s worth noting that if you’re starting from scratch or operating on a super tight budget, then ActiveCampaign has a lower cost at the outset. It’s my favourite email platform.

An email analytics screen outlining an open rate in ActiveCampaign.

Next, you should integrate your email platform with your website. Both platforms recommended above have plugins for WordPress, which will let you put email sign-up forms at certain points on your website. Even if you’re using a different CMS or email platform, you can connect both using Zapier.

From there, start building the list by pulling on these business levers:

  • Ask existing customers to join your list.
  • Make sure you’re turning website traffic into form sign-ups.
  • Integrate signup forms into your Facebook page with lead ad forms.
  • Start a pay-per-click advertising campaign to generate leads.

Follow those steps and you’ll set yourself up for success at a fraction of the cost of competitors who pour thousands of dollars into social media ads and event sponsorships. You’ll be reaping the benefits of ROI in email marketing in no time.

 

Ready to Learn More? Read These Next:

Andrew

Andrew

Andrew is the SEO and content marketing consultant at Webb Content. He worked in several agencies full-time and alongside another 7 as a freelancer, then went in-house to give Ontario's insurance industry a kick in the pants. Now he works with small and medium businesses to build consistent, long-term traffic. He still writes content in his free time, too. It's kind of an addiction.

Keep Learning About Digital Marketing

Solving Real-World Content Marketing Problems

Solving Real-World Content Marketing Problems

You’ve read enough half-baked blogs from talking heads going on about content marketing problems to know the basics: “Post content regularly” “Make truly excellent content” “Be sure to post it on social media” What eye-rollers. If only the rest of us had thought of...

read more
Andrew

Andrew

Andrew is the SEO and content marketing consultant at Webb Content. He worked in several agencies full-time and alongside another 7 as a freelancer, then went in-house to give Ontario's insurance industry a kick in the pants. Now he works with small and medium businesses to build consistent, long-term traffic. He still writes content in his free time, too. It's kind of an addiction.