6 Best Practices For Increasing The Return on Investment (ROI) Of Your Email Marketing

When looking for a marketing channel with the most steady and predictable return on investment, you look no further than email marketing. Aside from being quite manageable, it also gives you back $42 for each $1 spent on campaigns. This means that the calculated ROI of email marketing can reach at least 4200%. In this blog post, we will help you comprehend how your email marketing ROI works – and how to make it work even better. 

What is Email Marketing ROI?

Email marketing ROI covers the value you gain from your email campaigns compared to the value you spend on them. This is how you know when your campaign is effective, includes the right message, and attracts the right type of buyers – or when it’s time to stop and try another, more practical strategy. 

How To Calculate Email Marketing ROI?

You can calculate your ROI out via a relatively simple formula:

Let’s say, you spend around $10,000 on fine-tuning your mailboxes, drafting templates, and sending marketing emails to your users – this is your Spent Value or the number of funds you invest in your email marketing channel. 

You earn $300,000 from the customers converted through your campaigns in a month. This is your Gained Value, aka your earnings from your email marketing campaigns within a particular time period. You got your two main elements there, and the magic can start now. 

So, as the formula shows you, your average ROI from your marketing campaign is $29 for each dollar you pay. Multiply that number by 100. Now you know that spending $10,000 on marketing campaigns brought you a 2900% growth that led you to earn $300,000.

What Makes Email Marketing ROI So Important?

There is an apparent reason – you must know that you receive more than you give. Understanding your return on investment allows you to:

• Get a precise image of your buyers. When you know which email marketing strategy works, you know what inspires your prospects and moves them to make a buying decision. So, you make fewer mistakes when identifying your buyer personas or preparing marketing messages – and reduce the time necessary for prospects to proceed further down the sales funnel.
• Boost your website traffic. When you want to get more visits to your website, SEO is the first thing that comes to mind. However, SEO takes time and tons of work before it starts driving results. Email marketing campaigns can quickly introduce your target audience to your online portal speedily and easily by offering something of value to each recipient, encouraging them to look you up, and to explore all sources of information about you and your brand.   
• Segment your target audience. The more you understand your potential customers, the easier it is for you to create targeted content and offer something exclusive to each group. It may consist of new buyers or long-time subscribers, and you can select the most responsive clients and encourage the most proactive buyers. That means you’ll be able to build up your conversions and click-through rates effortless.
• Discover more personalization possibilities. Personalization matters a lot in the profitability and success of email marketing campaigns. According to Smarter HQ, around 72% of customers only interact with personalized marketing emails.

Best Practices For Increasing Email Marketing ROI

Your ROI isn’t set in stone, is it? It can be adjusted and increased by taking the appropriate measures. So, once you get a sufficient ROI, you can start working on building your success by figuring out the most vital points of your email marketing campaigns and injecting more value into them. There are many ways to do it, and we shall shed some light on the most popular practices. 

Best Practice 1: Harness The Power of Data

You can’t read the thoughts of your target audience – and if telepathy were possible, we would still be firmly against it. All that you need is located in two data pools. Both are available to you and include valuable insights into your prospects’ behavior. 

• Website visitor data. Users who come to your website and study each page can become your best customers – provided you manage to deduce what caught their interest and give them what they want. To do this, you must have an outline of their key goals, their demographics, and their priorities and use that knowledge to tailor your templates. You can study your daily visitors via Google Analytics. It is a must-have tool for anyone who wants to learn more about where their visitors come from, which page they view most frequently, whether they are one-time visitors or return every day or week. With such information on your hands, you’ll better understand igniting your target audience’s interest and turning visitors into subscribers.
• Campaign data. Never disregard the information that previous campaigns can provide you with. Some tools show you:
  1. The type of device used to view your message;
  2. When users are the most proactive while interacting with your emails;
  3. What links induced the most significant engagement;
  4. The number of customers that got converted;  
  5. The purchases made by converted buyers.

This data enables you to give the most precise performance evaluation and secure dynamic communication between your recipients and you. This brings us to the next practice for boosting email marketing ROI.

Best Practice 2: Prioritize Great Deliverability 

You can’t talk about ROI until you are confident about your deliverability. It won’t build itself; you need to work on multiple factors to achieve excellent performance and see your campaigns cause results. The more mailboxes you send to, the more challenges you will encounter. 

Email deliverability is the term used to describe the percentage of emails that land in your recipients’ inboxes. It focuses on emails that are granted access to the inbox and get seen by the recipient. This is precisely why email deliverability matters when evaluating the performance of your email marketing campaigns.   

Email deliverability contains a wide range of conditions that should be met before you can count your message as delivered and contribute to your success. 

• Sender reputation. Many senders can send an email, but only the most credible ones can make it reach their intended recipient. A good sender reputation stems from a healthy domain and a reliable dedicated IP address, and steady, consistent, and legitimate mailbox activity. 
• Authentication protocols. When receiving servers can’t determine whether the email came from the domain indicated in the sender’s address, the message gets sent to a spam folder. Correct identification requires DNS records, such as an SPF record, a DKIM signature, and a DMARC policy. Those records help recipients authenticate incoming mail and prove it wasn’t tampered with or sent without the domain owner’s knowledge. 

Good email deliverability doesn’t stop at sending a message to your prospects’ inboxes. It includes the following: 

• A low number of soft and hard bounces. Sometimes, soon after you send your emails, you receive some of them back, either due to temporary issues, such as server problems, breaking your sending consistency or full recipient inbox (soft bounces), or a problem with your mailing list, i.e., sending to a non-existing email address (hard bounces). Soft bounces require you to slow down and tread carefully to stay in your ISP’s good graces, while hard bounces can hurt your reputation as a sender. To maintain good email deliverability, you must ensure that your emails aren’t bounced. 
• A number of emails went directly to Inbox. It means, they don’t end up in a Trash folder or get caught by a spam trap. Such things occur all the time, yet senders remain evident to them, unknowingly damaging their deliverability. 
• A number of opened emails/email interactions. What’s the point of your email getting delivered if it’s never opened? Your messages pursue a specific goal, and when this goal is not achieved, they don’t make any difference to your deliverability. Your task is to make sure that your prospects can see your emails and that they are actually interested in opening them and reading their content. 

So, if you want to improve your marketing ROI, ask yourself: 

• Have I configured my email verification protocols according to my email marketing objectives?  
• Did I run enough warm-up campaigns?
• Is my sending list clean enough?
• Do I have all KPIs in my sights?
• Do I have a tool for checking blacklists? 

Of course, it takes time to achieve high deliverability. Your present results may be just enough to get a good ROI, but if you want to go better, faster, and stronger, you should keep an eye on your progress, be ready to take extra actions, and never give up on your warmup. 

Best Practice 3: Build A Highly-Focused Email List

This strategy is especially relevant for business-to-business (B2B) email marketing. When you send a message to someone, you want them to be the right person, worth investing your time and effort into, and capable of truly benefitting from your offer. There is nothing worse than sending email after email to someone you defined as a decision-maker only to find out that they no longer work at the targeted company! The more irrelevant addresses there are on your list, the lower your engagement rate will go. 

Gathering more exclusive data with sales intelligence tools and thorough research allows you to keep your sending list clean and valuable. Usually, that means that you must do some pre-sale exploration by attending LinkedIn pages of people who look like the perfect decision-makers, collecting and verifying contact data. Of course, not everyone has time for this – good thing that you have outsourced teams to help you out. 

Best Practice 4: Use More Than One Style And Tone

Speaking of personalization, the more you know about each segment of your receiving audience, the more you understand their tone and voice of choice. Some of your prospects may stick to more visual content, while others would prefer a more laconic approach. Some users believe in case studies and social proof, while others need detailed reviews and lots of educational content before they deem you a credible vendor. 

Content lets you express yourself and talk about your services creatively, so don’t hesitate to let yourself go and work on different types of content for different types of your prospects, subscribers, and clients. You’re good to go as long as your templates don’t break email outreach guidelines, contain spam trigger words, or overflow with unnecessary links. 

Which aspects of your email should always be personalized?

• Subject line. This is the attention-grabber for all recipients who check their inboxes. The more exclusivity it promises, the higher are the chances of your email getting opened. A genuinely relevant subject line is a work of art: it’s non-obtrusive, it’s not overly salesy, it tempts you with the promise of unique value, and it’s very clear about the person who sent the email and their goals. 
• Sender identity. Never provide your recipients with just a from:name@gmail.com address. Give them your name, your title, your company’s name, and your photo. Regardless of your target audience segment, your prospects must know who they are dealing with. When your email address is all they see, they might start thinking that they’re talking to a bot. 
• Visuals. You can tailor your content to meet the user’s preferences in color or even make your email template design more gender-specific (mainly if you sell items catering to a particular gender or offer benefits for a specific group). But be careful, though – not all email services support HTML format. 
• Slang and professional jargon. When you know about the industries and areas your recipients work in, you comprehend that terminology that rings a bell for them. Therefore, you can add more familiarity to your templates, showing that you are genuinely interested in their everyday issues and aware of their priorities.  

Best Practice 5: Keep Your Outreach Optimized For Mobile

Since we mentioned preferences, we should acknowledge the mobile age we live in. People don’t part with their smartphones and gadgets, using them as a portal to the world of information, content, and entertainment. Buyers and entrepreneurs use their devices to make purchases, manage their workflow, and, yes, check email. Hence, if your emails can’t be viewed from a smartphone, you miss out on many potential buyers. An average user is anything but patient – if it takes them more than 3 seconds to upload an email or if its readability is less than satisfactory, they will instantly close it and move on to other more optimized messages. 

To make sure that your messages are mobile-friendly, let your web developer and art director take a look at them, and see how they can be optimized and made more pleasing to the eyes of your target audience. 

Best Practice 6: Use Email Marketing Automation 

This practice is vital for business-to-consumer (B2C) marketing strategies, especially now when e-commerce is booming. This is why marketing automation features are commonly offered by many email service providers (ESPs). These features make it possible to:

• Schedule emails. Tired of sitting in wait to send newsletters and promotional messages at the right moment? You don’t have to. The automation settings allow you to select the correct time slot, add the contacts list, and rest easy, knowing that messages will reach your recipients’ mailboxes without delays. 
• Set up transactional emails. Email marketing automation features track the users’ purchase history and generate invoices, confirmation emails, notifications, and alerts letting each converted buyer quickly wrap their buyer decision up or continue interacting with the website.
• Send abandoned cart notifications. This type of message is a powerful remarketing tool that helps you recapture site visitors who didn’t make up their minds. Triggered whenever an item is added to a virtual cart but not taken further, abandoned cart emails softly push users to take action and show that their choice matters. 

Email Marketing ROI

Email marketing ROI is a valuable and controllable KPI that can show you your progress with the email marketing roadmap – and how many challenges lie ahead. It lets you distribute your money between sales channels as effectively as possible and encourages you to try even harder. 

We hope that the practices we listed here will help you achieve your marketing goals and inspire you to go beyond your current results. To optimize your campaigns and ensure no detail slips past you, we suggest trying your practices together with Folderly. It is the platform that combines email deliverability testing with the actual fixing of spam problems, real-time placement analytics, integrations with major ESPs, and more.

Good luck, and may the force of ROI be with you!

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Disclosure: Martech Zone has a partnership with Folderly and we’re using our referral link throughout this article.