iMeda Connection – Why you should measure email ROI
By: iMedia Connection
Does your organization measure the return on investment (ROI) of your email marketing efforts? If you’re like a majority of marketers today, your answer is probably “no” to that question. You may track the success of individual email campaigns by measuring such metrics as open and click-through rates. Plus, you likely know what portion of your total marketing budget that email marketing represents. But that doesn’t provide a good measure of the success rate of your overall email program.
So why should you measure email ROI? First of all, it provides a great benchmark metric for comparing email marketing to your company’s other marketing channels, such as direct mail, print advertising, social media, and pay-per-click. Plus, by knowing your email ROI, you can more readily justify your email marketing program to clients and bosses, as well as justify investments for improvements to future email campaigns.
How do you measure email ROI?
On the most basic level, ROI is calculated with the following equation:
(return – cost)/cost
For any of you who have tried to calculate email ROI, you know accurately identifying and incorporating all of the components that make up both cost and return is a challenge. That’s likely why many marketers today use the revenue per email (RPE) metric to help them get a handle on the value of their email programs.
RPE is calculated by using the following equation:
RPE = total revenue generated/(# of emails sent – # of emails bounced)
The good thing about calculating RPE is that you don’t need to determine all the costs of your email marketing campaigns. Plus, it tells you about how much revenue your email list is generating. Unlike ROI, RPE doesn’t tell you the profit (or loss) of your email marketing program. But you can bet that if your RPE is going down, so is your ROI.
Want to check out the who’s who and what’s what of email marketing?
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