A Complete Guide on How to Calculate and Improve Email Marketing ROI

Email marketing has an ROI of 3,200%. For every $1 you spend on email marketing, you could average a return of $32. You’ll need a strong email marketing strategy, though.

Otherwise, your emails could fail to generate conversions and sales. Instead of improving your email marketing ROI, you could waste time and money.

Do you know how to calculate an email ROI? Are your campaigns generating results? How can you improve your email marketing ROI?

Keep reading to find out! In this guide, we’ll help you boost your ROI and your business.

Start making improvements to your email marketing campaigns with these tips today.

How to Calculate Your Email Marketing ROI

First, let’s discuss how to calculate email ROI.

Your return on investment will indicate how much income you generated from your email marketing campaigns. An ROI is usually expressed as a percentage of the cost.

To calculate ROI, you’ll use the formal ROI = (Income – Cost)/Cost.

If you’re using an email management platform, the platform should calculate the ROI for your campaigns automatically. You can then determine if your campaigns are effective by comparing your engagement to the industry average. 

How do your emails compare to your industry’s average? You can find out here.

Email marketing is still one of the most cost-effective marketing strategies you can use today. If you’re making mistakes with your campaigns, you could waste time and money, though. It helps to keep track of your ROI.

That way, you can continue making changes to your campaigns. As you A/B test and make changes, study your ROI. Has it changed?

If your ROI improves, you’ll know you’re on the right track.

Improving Your ROI

Now that you know how to calculate email ROI, let’s discuss making improvements. Here are 10 ways you can improve your email marketing ROI with ease!

1. Establish Your Goals

Before you start creating your campaigns, pause for a moment. What are you hoping to accomplish with email marketing?

It’s not enough to send emails and measure your email ROI. Improving the costs of your campaigns won’t drive new business. Instead, you need to improve your ROI and accomplish your marketing goals. 

Determine if you want to:

• Generate more brand awareness and recognition
• Establish yourself as a thought leader in the industry
• Attract more website traffic
• Generate brand trust and loyalty
• Retain repeat customers and generate repeat sales
• Nurture existing leads
• Drive online sales

As you create each marketing campaign, have a specific goal in mind. Then, determine each goal’s key performance indicators (KPIs). Establishing KPIs will help you track the progress of your goals.

For example, if you want to boost brand awareness, study your open rates. If you want to generate website traffic, study your clickthrough rate.

Are you focused on driving online conversions? Create a landing page for your email marketing campaign. Build a dedicated form for that page, too.

Then, track how many form submissions, online sales, or other conversions occur on that landing page. 

Now that you have your goals in mind, you can better improve your email marketing ROI.

2. Segment Your Lists

Before you start sending emails, it’s important to gain a better understanding of your customers. If you don’t understand your customers, your emails won’t appeal to them.

First, compile demographic and psychographic information. Determine who your customers are and what they care about. What problems are they experiencing?

Then, find ways to segment your email lists. You can segment subscribers based on:

• Buying behaviors
• Website behaviors
• Where they are in the buyer’s journey
• Interests
• Hobbies
• Age
• Location
• Household income
• Gender
• Language
• Marital status

The language you use in an email for a 26-year-old mom might differ from one you send to a 16-year-old male. Segmenting your lists will make it easier for you to personalize your messages. It can help improve the performance of your emails, too. 

In fact, marketers who use segmented campaigns experience a 760% increase in revenue. Another 59% say email is their biggest source of ROI. In fact, email offers result in shoppers spending 128% on their purchases. 

Companies are using personalization in different ways, too. For example, 76% of businesses tailor their messaging and promotions by audience segment. Another 51% choose product or content recommendations by segment. 

Personalized emails can generate an ROI of 122% on average. Personalized subject lines have a 50% higher open rate than others, too.

Meanwhile, 68% of consumers will unsubscribe from mistargeted messages.

Segmenting your list will make it easier for you to personalize your messages in the future.

3. Attract New Subscribers

It’s not enough to keep sending emails to your existing subscribers. If you want to improve your email marketing ROI, attract new subscribers, too.

First, make sure your website is optimized to attract subscriptions. Have a dedicated form on your website for email subscribers. Make sure to use an eye-catching button and compelling CTA.

Keep the form simple and short. A lengthy, confusing form will scare off subscribers.

You can also use popups to urge website visitors to subscribe to your emails.

Don’t forget to optimize your landing page forms, too.

Creating multiple opportunities to attract subscribers will help fill your subscription list. Then, you can generate more conversions, improving your email ROI.

4. Use Automation and Triggers

Automation can save you valuable time and energy. Beyond that, it can also improve the performance of your emails.

First, create trigger emails that send based on consumer behaviors. For example, what happens if someone abandons their cart on your website? You can automatically send them an email.

The email can even use dynamic content to show the subscriber what they left in their cart. You can better personalize your emails to connect with your subscribers.

What happens when someone makes a purchase on your website? Send them a thank you email! Thank you emails are a great way to communicate your gratitude.

Consumers will see you value their service and come back for more. You can use thank you emails to improve brand trust and loyalty. Improving brand loyalty will help you retain customers, further improving your ROI.

You’re busy enough running other campaigns. Automation can free up a lot of time in your schedule. You can respond quickly to consumer needs without turning your attention away from other tasks.

Use automation to create intricate email workflows based on where consumers are in their buyer’s journey. From the awareness to the retention stage, every customer requires distinct messaging.

For example, you can send emails about your products to better educate consumers in the awareness stage.

It’s important to segment your audience groups to use automation effectively. Then, you can provide each subscriber with their own, personalized journey. 

5. Optimize for Mobile

More consumers are using their smartphones to check their messages and emails. Are your emails mobile-optimized? If not, consumers might have a difficult time reading your content.

Try to keep your emails short, sweet, and to the point. Keep your content organized using headings and subheadings. You can also improve readability with bullets and lists.

What about your images? Images can take time to download. You don’t want degraded images to appear in front of your mobile readers.

Instead, reduce the number and size of your email images.

Use a single-column design, too. Otherwise, you could give your readers too much to look at on such a small screen.

Make sure your message is clear, concise, and easy-to-read. Get to the point in as few words as possible.

Then, use an eye-catching call-to-action to direct readers to your website.

Is your website optimized for smaller screens, too? Make sure consumers can interact with your landing page from their phones. Otherwise, you could miss your chance to generate conversions. 

6. Use Social Media Marketing

Use your social media campaign data to learn more about your target audience. Then, continue hyper-personalizing your messages and content. Using social media marketing can help you save valuable time with your email campaigns. 

7. Add a Tracking Pixel

Use a tracking pixel to gather more information about your subscribers. You can learn about their behavior on your website and landing pages.

Then, you can automatically send emails based on the consumer’s behaviors. The emails will use specific messaging to provide readers with personalized content.

Using a tracking pixel will help you send emails based on predetermined behaviors.

8. Time Your Campaigns

When are you sending your campaigns? Timing is everything! Take a look at your data and make sure you’re sending emails on the right day and time.

You can further optimize your email marketing ROI by improving your timing.

9. Use Dynamic Content

Dynamic content allows you to automatically update text, images, and CTAs in your emails based on consumer data. Use dynamic content to save yourself time with your campaigns.

You’ll better personalize your messages, improving your chances of converting customers.

10. Track, Test, and Optimize

As you use these “improve email marketing ROI” tips, track your data. Which strategies are working? Which subject lines and CTAs are driving engagement?

Keep tracking and testing your campaigns. Use A/B testing to learn more about subscriber preferences. Then, optimize your campaigns and keep improving your ROI. 

Email Marketing ROI: 10 Tips for Giving Your Campaigns a Boost

Ready to boost your email marketing ROI? Give these 10 tips a try! With these tips, you can connect with your subscribers and generate more conversions.

Don’t forget to keep updating your email list with segmentation in mind!

Need help improving your email ROI? We’re happy to lend a hand.

Explore our pricing today to get started.