Email Marketing ROI Calculator: How Effective Is Your Campaign?

How do you turn $1 into $36? Email marketing.

Email marketing has the third highest return on investment (ROI) for any marketing channel, with an average return of 3,500%. That said, to achieve this impressive ROI, a business needs to understand how to optimize its email outreach efforts. 

Below, we have our email marketing ROI calculator — a tool that will shine a spotlight on how your campaign is performing and identify potential areas of improvement. From there, we go over tips to improve your email marketing ROI, including how Right Inbox can supplement and optimize your outreach.

What Is Email Marketing ROI?

Email marketing ROI is the return on investment generated from a company’s email marketing campaign.

This figure is calculated by comparing the total gains of the marketing effort, such as new sales or leads, to the total costs of the marketing campaign, such as equipment costs and salary expenses. Once the ROI is calculated, a business can use that number to determine the effectiveness of the email marketing campaign, and make alterations or improvements if necessary.

How Do You Calculate Email Marketing ROI?

To calculate email marketing ROI by hand, you can use the following formula:

Email marketing ROI = (Total gains – total costs) / Total costs x 100

The variable “total gains” is the total amount of money generated from an email campaign.

If you are measuring it by the sales of a product or service, simply add together the total sales. If you are also including leads as part of your gains, find out how much a lead is worth to your business. For example, let’s say you are selling a product for $99. If 5% of leads convert to paying customers, then each lead would be worth $4.95 to your business.

The variable “total costs” is the total expenses associated with running an email campaign. This can include software, miscellaneous tools or equipment, and employee salary.

What Is a Good ROI for Email Marketing?

The average ROI for an email marketing campaign is $36 generated for every $1 spent. 

That said, don’t worry about achieving a 3,500% ROI from your first few email campaigns. Continuously seek to optimize and improve your efforts, making sure to stay increasingly profitable along the way.

How To Improve Email Marketing ROI

Email marketing is a powerful tool that can stretch an advertising budget and capture higher-quality results. Here are three key tips to improve this outreach method:

Use Tools

Wherever possible, use software and other tools to create, track, and optimize your email marketing campaigns.

At Right Inbox, we offer a host of features to optimize your email marketing, such as personalized templates, automatic follow-ups, email tracking, CRM integration, and more. Using tools like ours can give you the information and assistance you need to create effective and profitable campaigns.

Divide and Personalize

When sending email marketing campaigns, it’s best to be as specific and personalized as possible in your messaging. In fact, subscriber segmentation and message personalization are the top two most effective email marketing campaign strategies. 

So, if your business has an email list filled with multiple demographics, consumer situations, and industries (if B2B), you should be running individual email campaigns for each specific subset. Create different subject lines and body contents for each sub-campaign to deliver personalized information that is sure to resonate with your email subscribers. 

Send at the Right Time

It’s not enough to craft the perfect email marketing campaign — you need to send it at the right time.

Studies have shown that the best time to send email marketing campaigns often aligns with working hours, peaking from 9 a.m. to noon, and tapering off closer to 5 p.m. These numbers could be different depending on your specific email subscribers, but it’s best practice to start sending email campaigns between 9 a.m. and noon and adjust from there if needed.

Is Email Marketing Still Effective?

Yes, email marketing is still effective. In fact, it’s one of the most effective marketing outreach methods, with an average return of $36 for every $1 spent.

That being said, email marketing can fall flat without a clear strategy. Using tools like our email marketing ROI calculator above can give you a good idea of the effectiveness of your current outreach, and using tools like Right Inbox can optimize that outreach. From email tracking to personalized templates and CMS integration, we can help your email campaigns reach peak efficiency.