Proving the value of email marketing
PUBLISHED ON: 05/02/2019
AUTHOR: Ross Pinnegar, Client Success Manager at Vuture
A recent study found that for every $1 (US dollars) marketers spend on email, they get $43 in return. The same study found more than 40% of 1,000 companies interviewed didn’t send marketing emails at all. So why is there underinvestment in email?
It's clear that decision-makers simply haven’t bought in. Often, email isn't considered the most glamorous channel. It can be more rigid than other channels. It’s certainly been around for a long time. And it can be seen as a ‘cheap and cheerful’ way of communicating, at a basic level. But none of this accounts for the value emails deliver. According to a 2017 study, email was rated the best channel for return on investment (ROI).
In any case, it’s necessary to prove how valuable email is to your business to get the most out of it, and, more importantly, secure buy-in from the very top.
Engagement is a vital measure for marketers. But, when speaking to the wider business, we need to think bigger. This presents a real challenge. The 2018 Data and Marketing Association (DMA) Marketer Email Tracker tells us only 50 per cent of marketers measure ROI. If we can find a way to report on the return from email we should be able to win more budget for it.
In the B2B world, calculating ROI isn't straightforward. We can't expect clients or prospects to click through and buy from an email in the same way as retail customers. Often, we're selling expertise or complex services, so we need to consider the journey to a sale.
We know, using Vuture reporting, how many contacts click through on an email. Clicks mean website visits. Many of us have tools to see what proportion of web visits convert to leads. In turn, we can develop leads into sales. By taking a few key figures, we can start to build a picture of the value of these email-driven sales.
We've created a calculator to help you understand these metrics better. You can access it from the most recent Client Success email, or you can request instructions by clicking here. You'll need a few figures to hand but we've included some industry averages just in case.
The report will give you a couple of important numbers. The first is the total revenue from your email marketing for a given period. You can use this figure to challenge email investment and fight for more budget.
The second figure is the average revenue per email contact, or the value of an email address. This equips you to make smarter decisions. If you know the value of each email address is £15 you know how much to spend on acquiring a new one.
You can also use the report to show the effect of changes in click-rates or database size on total revenue. It might help make the case for investing in email design or data collection.
At this point, it's worth noting this isn't an exact science. Conversion rates are averages: one lead will be less likely to convert than another. So, ROI isn't something we'd encourage you to use as a weekly or monthly KPI. But when budgeting for a new year, or seeking investment for an email project, it’s a powerful tool.
Remember, email is consistently found to be the best rated channel for ROI.
Make sure you can prove the value of your activity to your business. By doing this you can get recognition for your team and continue to improve by securing more budget.