Email ROI: A No Brainer for the Large Corporation

email costs

We had a fantastic meeting with a national company today and discussed putting an email program into place. The company has over 125,000 clients nationwide, 4,000 salespeople… and no email program. They have 8,000 products with 40 or 50 new products each month that the manufacturers are dying for them to sell. They’re worried about the cost of the email program though and are wondering where the money will come from.

This is one of those relationships that I wish I could put together at no cost and simply charge a commission!

Email ROI

In the above example, I’m guessing that they can get an email address for 1 out of every 3 clients by the end of the year. In reality, the program should generate much more interest and many more emails, but I want to be on the safe side. I’m estimating 1 email per month – not weekly. Each client already makes purchases every month, so the email is really there to try to increase sales from existing clients. I threw in a pitiful 0.75% response rate with an average (very conservative) $5 in additional spending. For the Email Service Provider, I’ve added $0.03 per email… on the high side.

With all of these conservative estimates, the output is still a startling 25% Return on Investment. Additionally, email will drive more orders through their ecommerce site – saving on erroneous orders and manpower costs. Moreover, with their vendors chomping at the bit for attention, the company could sell premium advertising space in their newsletters! I reviewed the advertising costs on one industry newsletter today and the average advertisement was $0.02 per email and there were 4 spots in each newsletter.

Selling 4 spots in each email would push the ROI upwards of 300%!

I sure wish they could figure out how they’re going to afford this.

What do you think?

This site uses Akismet to reduce spam. Learn how your comment data is processed.