Email Return On Investment

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The old accountants’ approach to marketing was that 50% of marketing was a waste of money, the problem was that nobody knew which 50%. There is no doubt that email marketing’s return on investment – ROI – is the higher than most other marketing activities.

There are websites which offer email marketing ROI calculators such as Bplans.com, entrepreneur.com and marketingtoday.com. These use readily accessible data such as campaign preparation costs, buying email lists, sending expenses and comparing the totals against the response rate and the conversion rate. A conversion is the when a responder converts into a customer and buys. This a convenient approach when you are selling simple products.

But for most of us, life is not so simple. There are many intangibles and immeasurables in an email marketing campaign; image, customer retention, technical updates and corporate news are but a few.

Where email marketing campaigns excel are in the analytics which can be collated each time. All email sending platforms can provide feedback on how many:

  • Recipients opened their email
  • Bounced or unsubscribed
  • Clicked on a social media ‘like’ button
  • Forwarded to a colleague

Some of the more advanced email marketing platforms will store the time each recipient opened his email and when it detects patterns, it will send email at different times to optimize the opening rate. E.g. if Mr Smith usually reads his email around 7.00am with his coffee, while Mr Jones around 1:30pm with his lunch, the platform will send Mr Smith’s at 7:05am and Mr Jones’ at 1:35pm. Frightening, when you think about it.

You can even be more sophisticated. If you monitor which articles are read by which people you can fine tune your newsletters to be shorter so that people only receive the types of articles which they like to read. For example, sport for men, fashion for women etc. I have to be careful here not to sound sexist.

If you place an ad in a magazine you will know the circulation numbers of that magazine and these numbers are usually audited independently. But it is difficult to assess the effectiveness of that campaign. Printed magazines do not have ‘click-through’ monitoring. In general there is an increase in sales after in intense advertising campaign. This you can measure better if you include vouchers or coupons which provide proof of where the customer saw your ad.

One accountant told me that with email marketing, he estimated that only 40% of it was a waste of time! When I asked him about the period of time he was talking about, he did not answer.

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