Email Marketing RoI

email-marketing-roi

Does email marketing work? What’s the math? What’s the email marketing RoI looking like?

These are questions you’ve had but never got around to find the answer. We sat down on a friday afternoon with copious amount of filter coffee and spreadsheets to crunch the numbers for you.

TL:DR: It takes about a $2000 to win a customer with email marketing, at the most. It takes about $215 if you use a smart tool like PipeCandy for your email prospecting. I’d leave it to another blog post to delve into why we are almost 5x better. This blog post is about establishing the Email Marketing RoI.

What’s the Email Marketing RoI?

Email Marketing RoI

Notes about the workings on Email Marketing RoI

1. In my previous startup where we ran email campaigns for 4 years using traditional email campaign tools, we used to manually collect prospect data, through a network of ‘Work from home’ moms. They’d get us about 100 prospects in a good day

2. We’ve applied a cost of $25,000 a year for data entry clerks & 264 working days a year. The math works out to $95 per day of wages

3. Time taken to send email campaigns and follow-ups – based on our SDRs’ experiences when they were using tools like MailChimp, Sendy etc. If you are using such tools, it’s time to shift. We’re happy to end the misery for you. Just write to us.

4. Cost per campaign = Tool + People (SDR & Data Entry Clerk) cost

5. We’ve assumed that you are some sort of an online product that can be demoed / tried before buying

6. The click rates, response rates, signup to trial and trial to paid conversion rates are based on industry averages

To get one paying customer, you’d need to have 20 trial signups. 20 trial signups come from nearly 200 visitors. To get 200 visitors you’d have to reach 1350 unique prospects and email them some 6750 times.

For EMail Marketing RoI to be 3 (in other words, every dollar spent resulting in at least 3 dollars), your product should bring in $6000 worth of revenue in the lifetime of a customer. If a representative customer sticks with you for 24 months, that means $250 per month of subscription revenue.

Next up:

Why is email marketing better than search engine marketing?

Get 16x more leads in PipeCandy than your traditional email campaigns!

 

 

Author Bio

Ashwin Ramasamy

Slips poor jokes & gets away with a poker face. Carries a no BS attitude at getting things done. First to arrive at the office, Ashwin’s energy does not ebb through the day. Ashwin is one of the co-founders and he sets the tone for marketing, sales, design & culture.