Email marketing is a vital communication tool for both consumers and brands, marrying a strong email marketing strategy and a carefully maintained budget. With every marketing dollar needed to make an impact for small and large businesses alike, brands need their marketing channels to produce leads and provide a return on investment (ROI).
With more than 333 billion emails sent daily, it’s important to revisit how budget-friendly email is and what you need to consider (financially) to create a successful campaign. Read on to discover our email marketing audit as we dig into your burning question: Is email really cost-effective?
Email Marketing Audit: Is Email Really Cost-Effective?
Email marketing continues to grow in popularity, meaning there’s more and more competition in the inbox for you to stand out against. To keep your bottom line in check, you need to learn how to use email marketing correctly and understand how email marketing can affect your financial performance.
How Expensive is Email Marketing?
Our audit explores the different facets of email marketing allowing you to fully consider whether email marketing is right for you, so let’s start with a simple question: how expensive is email marketing?
With a smart strategy, multifaceted software, and a little grit, you can develop an email campaign that delivers ROI. However, there are initial costs to consider when getting started and building an email list like an email platform, for example.
On average, a mid-sized business can expect to spend between $0-$1000 on email marketing, depending on the chosen platform and the number of subscribers. Reports show that 82% of marketers spend anywhere between 0-20% of their total marketing budget on email marketing.
Email marketing is as inexpensive as you need it to be, but keep in mind that as your business grows, your email needs will too.
What Factors Affect the Cost of Email Marketing?
While the email platform you choose has a large impact on your monthly costs, there are many other factors you’ll need to consider when budgeting for email marketing. The factors you need to consider include the following:
■ Quality of Your Email List: We don’t recommend ever buying contact information, so it may take time to either build an active subscriber list or clean up existing inactive subscribers. This step is crucial to not overspend on cold leads.
■ Complexity of Email Design: If you plan on developing intricate designs or interactive elements, you can expect to pay more for designers and/or additional plugins.
■ Outsourcing vs. Using Internal Team Resources: Whether you outsource your email initiatives or keep them in-house will greatly affect your email marketing costs. Outsourcing email initiatives to an agency can cost you thousands of dollars, but with the right platform like Klaviyo, you can do it in-house without coding experience.
■ Frequency of Sent Campaigns: Different platforms have additional costs depending on the number of emails you send. For example, a monthly newsletter will cost less than a weekly promotional email. However, using automation tools ultimately helps you streamline your workflow and increase subscriber engagement.
How Does Email Lead to Conversions and a Higher ROI?
With the right strategy, you can rake in leads and earn more business profits. When you start sending email campaigns, you’re encouraging your audience to visit your website and purchase a product or service; an email works as an invitation to learn about your business. With a frequent email strategy, you can increase your website traffic and expose your business to more people.
You score a conversion each time your email results in a purchase, but why does that matter? Well, each conversion you secure impacts your ROI. You can use this basic formula to calculate your ROI: ($ Gained – $ Spent)/$ Spent = ROI(%).
Let’s go through an example. Imagine you pay $250 a month for your email platform, and pay your in-house marketer $400 a week (4 hours x 5 days a week x $20/hour). Your annual marketing spend will amount to $23,800 a year. If the cost of your lead is $200 and your email campaigns earn you 400 leads a year, your total revenue from email is $80,000. Using the formula above, your ROI is ($80,000 – $23,800)/$23,800 = 236%. Impressive!
What Additional Marketing Skills are Needed to Get Started?
Once you’ve chosen an email platform, it’s important to remember that it takes more than technology to earn conversions. As mentioned above, you need active subscribers who are interested in your brand or product offerings. That means developing content and resources—videos, infographics, eBooks, etc.—that’ll attract the right audience to your website, and this takes a certain skill set!
20% of marketers believe that email design improves engagement, so you’ll need powerful copywriters and designers that keep your subscribers wanting more. Most email platforms offer drag-and-drop templates to develop your emails, plus subject-line testers for you to better understand how a campaign will perform. While this may not happen overnight, email helps you learn more about your audience and test what features work best, especially if you’re working with top talent who possess the appropriate skills.
Do People Prefer Emails Over Other Communication Methods?
With the increase in mobile usage and the rise of social media, it may seem like email marketing is outdated. However, it’s actually the complete opposite: 58% of people check their emails first thing in the morning and 72% of people prefer email over any other digital platform.
If you’re wondering whether people still read emails, you should consider that your audience opted in, giving consent to receive your emails…we have to assume they actually want to read them! With interested subscribers receiving your email and most people reading them, you’re already halfway to earning a conversion. You just need to hook them in with catchy subject lines and dynamic designs, but email marketing is here to stay.
Top Benefits of Using Email Marketing
Now that you’ve explored the cost benefits of email marketing, you need to understand the other advantages this tactic can offer your brand. Every company has a unique set of needs, and the budget isn’t always your number one priority. Beyond raising ROI, email marketing can help you grow a loyal customer base and build brand awareness.
Here are a few additional reasons email marketing is an effective strategy:
■ Authentically Connect with your Audience: Email is the best way to reach all your customers to launch products, send company updates, and more. With the right personalization, you can reach out and have a 1:1 conversation with your audience through videos, feedback surveys, and more to show that you really care.
■ Become a Recognizable Brand: If you’re looking to become an identifiable brand in your industry, communicating with your customers is the best way to establish a voice and image. Each email you send is a new opportunity to further establish yourself.
■ Establish Thought Leadership and Credibility: Whether you’re a local or national brand, becoming the go-to industry expert is an important part of driving traffic to your website. Consider sending out educational emails with informative blogs or videos.
■ Save Time and Resources: While email is cost-effective, you’re also able to save time, instead of spending your resources on expensive TV ads, direct mail pieces, or radio commercials.
To supplement your email marketing strategy, you can test other digital tactics that’ll boost your brand awareness and even drive subscribers to your email list. Consider using social media platforms, like Instagram and LinkedIn, to expand your audience with authentic posts. With social media, it’s more important to focus on quality content than lead generation, especially if you’re trying to keep costs down. You can even utilize user-generated content, with permission, to improve your email engagement.
When considering which digital platforms are right for your business, email marketing is the best way to reach your audience at the right time and with the right message. For businesses looking to increase their bottom line, email is also the most cost-effective tactic with proven ROI results.
Email allows you to keep your costs low, depending on the platform and resources you utilize, while also driving traffic to your website for conversions… the perfect strategy for you and your business.