How to Measure Email Marketing ROI
Email marketing is known for having one of the highest returns on investment of any marketing channel. But how do you actually measure the ROI of your email marketing campaigns? Measuring your email marketing ROI is crucial for proving the value of your efforts, justifying your budget, and making data-driven decisions about your strategy. This guide will walk you through the process of measuring your email marketing ROI.
1. Define Your Email Marketing Goals
The first step in measuring your ROI is to have a clear understanding of what you want to achieve with your email campaigns. Your goals should be specific, measurable, and aligned with your overall business objectives. Some common email marketing goals include:
- Generating leads.
- Driving sales.
- Improving customer retention.
- Increasing website traffic.
2. Track Your Key Performance Indicators (KPIs)
Once you have defined your goals, you need to track the KPIs that will help you measure your progress. The KPIs you track will depend on your goals, but some common ones include:
- Open rate.
- Click-through rate (CTR).
- Conversion rate.
- Unsubscribe rate.
- List growth rate.
3. Calculate Your Email Marketing Spend
Next, you need to calculate your total email marketing spend. This should include all the costs associated with your email marketing efforts, such as:
- Email marketing software.
- Content creation costs.
- Employee salaries.
4. Attribute Your Results to Your Emails
To calculate your ROI, you need to be able to attribute your results—such as leads and sales—to your email campaigns. You can do this by using:
- Google Analytics: Track the traffic and conversions that are coming to your website from your emails.
- UTM parameters: Use UTM parameters to track the source of your traffic and conversions.
- Your email marketing platform’s analytics: Most email marketing platforms have built-in analytics that can help you track your results.
5. Calculate Your ROI
Once you have all the necessary data, you can calculate your ROI using the following formula:
ROI = ( (Return – Investment) / Investment ) x 100
For example, if you generated £10,000 in sales from your email marketing campaigns and your total investment was £1,000, your ROI would be 900%.
Our Overall Thoughts
Measuring your email marketing ROI is an essential part of any successful email marketing strategy. By setting clear goals, tracking the right metrics, and using the right tools to attribute your results, you can gain a clear understanding of the value of your email campaigns. This will allow you to make more informed decisions about your strategy, prove the value of your efforts to your stakeholders, and ultimately, drive better results for your business.
Need help measuring your email marketing ROI?
Our team of email marketing analysts at Validus Media can help you track your performance and prove the value of your efforts.
