February 27, 2023 (Updated: May 4, 2023)
Finding someone who doesn’t check their email at least once daily would be a challenge. In fact, research shows that 95% of email users check their personal inboxes every day. That means if you send your target customer an email, they’re almost guaranteed to see it. But making sure they actually open it is a whole different ballgame. And if you want to boost engagement and conversions, you’ll need to optimize your email campaigns. In this guide, we’re covering everything you need to know about maximizing the ROI of email marketing as part of your brand’s digital strategy:
Image via NeilPatel.com
Measuring ROI is one of the biggest challenges you’ll face as a marketer. Most marketers are not confident in their ability to measure ROI, and this only gets harder with email. There are a number of KPIs that you need to track to determine the returns you generate from your email campaigns. But where do you start with maximizing your ROI from email marketing?
First, it’s important to understand the potential ROI of email marketing. Experts report companies can expect an average return of $40 to $45 for every dollar they spend on email marketing. The ROI becomes even more impressive when you pit it against other marketing channels. By comparison, the returns for SEO and keyword ads are $22.24 and $17, respectively. For a small part of the typical budget, email marketing punches far above its weight—bringing in 4,000% or more of the average spend.
What’s more, these impressive stats still don’t hit the maximum ROI you could achieve. Some companies hit almost double the average ROI for every dollar they spend. Think about it. You could be achieving double the return on your investment—just from email marketing. That’s double the impact across all your KPIs, like lead acquisitions and customer conversions.
Related reading: How To Measure The ROI of Content Marketing
Here are some strategies to keep your content relevant, encourage engagement, and drive conversions for maximizing the ROI of email marketing:
Segmentation is crucial if you want to maximize your email ROI. Your email list can include a range of demographics, even if your company only targets a specific customer profile. These people each have different needs, wants, interests, and behaviors. So why would they all respond the same to the same email? Grouping your email list based on specific qualifying criteria ensures you’re delivering content that’s relevant and meaningful to each of your audience segments.
Statistics have shown that segmentation generates 14.31% more opens than non-segmented campaigns, further maximizing the ROI of email marketing. Audience segmentation also leads to higher open and click-through rates and fewer unsubscribes. As you establish your audience segments, you can create quality content that aligns with the criteria. For example, you might create segments based on demographics, like location, industry, or age. You could also use personal interests and customer feedback to group audience segments.
You might segment your list according to which stage of the marketing funnel leads are in. This way, different users receive targeted messaging to encourage them to take the next step. Audiences in the early parts of the customer journey, for instance, could receive informative newsletters, while people in the buying stage might receive product or service promotions.
Read more about it: What Is Demographic Segmentation?
Personalization works alongside segmentation to maximize your email marketing ROI. With open and click-through rates being top key performance indicators (KPIs) for email campaigns, personalization is critical to get your audience to engage. On average, personalized emails can generate a 26% higher open rate than generic messages and lead to six times the average transaction rate.
Even just referring to your customer by name in the subject line is enough to boost engagement and ensure recipients actually open your emails. You can take personalization further using the data you collect about your subscribers’ demographics, interests, and past engagement and behavior. Personalizing content with these details helps build a connection with your audience and boosts the likelihood they’ll continue to open and interact with your emails.
A/B or split testing experiments with different variables to see which is the most effective at motivating your audience to complete a goal. Your recipients see two or more variations of your email. You can A/B test different subject lines, specific content for certain groups, and even the “To” and “From” fields. Then, your analysis shows which variation is most effective at generating conversions. As you experiment with different email components, you’ll find the ones that work best for increasing engagement and maximizing your email marketing ROI.
For example, imagine you want to know which type of CTA works best: links or buttons. So you split a test group of subscribers into Group A and another into Group B. Group A receives emails with a button-style CTA, while Group B receives emails with a link. Once you collect the data about your audience’s activity, you can determine which email format has the most interactions. Using these insights, you can incorporate the winning feature and improve on your approaches for future campaigns.
Time is money, and marketing automation is one of the most powerful ways to save both. Email marketing software can optimize your ROI by doing some of the most complex tasks for you. This makes email marketing easier, more effective, and much more measurable than if you were doing things manually.
It’s well-known that automated marketing software can send emails for you. But that’s only the basic level of what these programs can do. For example, most ESPs offer A/B testing as an automated feature, where the software not only splits the groups for you, but it also monitors and analyzes the results.
Automated software can also identify leads and add them to your lists. Once somebody signs up, they immediately join your subscriber list and start getting your brand’s marketing emails. This takes the work out of nurturing leads while continuously growing your pool of potential customers. So, don’t just assume your software is only good for sending emails. It might have additional automation features that can take your ROI to the next level.
Nowadays, most subscribers open emails on their mobiles. In fact, 41% of email views come from mobile devices, with desktop use behind at 39%. It’s no surprise mobile optimization plays a role in maximizing the ROI of email marketing.
To optimize for mobile effectively, prioritize plain text and break up paragraphs into smaller sections so content fits properly on a small screen. Keep your emails brief, as research has shown that emails between 50 and 150 words have the highest engagement rates. So don’t equate quantity with quality.
And when it comes to images, a lower resolution is the way to go. Most ESPs compress your images for you, so you can use still put in a high-quality graphic to add value to your email content. The most common mobile screen resolution is 360 pixels by 640 pixels. Make sure that any images you include in your emails are still crisp and clear at these resolutions.
Read more about it: 6 Tips To Optimize Your Content for Mobile Users
Email deliverability can mean the success or failure of your messages arriving in your audiences’ inboxes. It might seem like the most basic part of email marketing, but deliverability is surprisingly complex. If your ROI is poor, it might be because your emails aren’t arriving to the people who should see them. There are several factors that can affect your email deliverability. Most of these revolve around the issue of your sender reputation.
A low sender reputation tells email providers that your messages are low quality and not worth engaging with. Worst of all, low sender reputation can cause your emails to go straight to your audiences’ spam folders, which increases your spam rate, causing your sender reputation to drop more. It’s like a vicious cycle. While being flagged as spam is a significant part of determining sender reputation, there are other factors that can play a role in this metric and your overall email deliverability.
For one, unsegmented campaigns can lead to people receiving unwanted emails or irrelevant content. This in turn can result in a higher likelihood that they’ll flag your messages as spam. A lower sender reputation could also be because your content isn’t compelling enough to motivate audiences to open and click through your emails. But no matter the reason, a low sender reputation can lead to low email deliverability and a lower email marketing ROI for your business. So, you’ll want to prioritize metrics for measuring email deliverability, such as your spam rate, hard bounce rate, and soft bounce rate.
Tracking your email analytics through reporting tools might be a headache, but how are you supposed to maximize your email marketing ROI if you don’t measure it? In reality, barely a third of marketers know how to track and measure the ROI of each of their marketing channels accurately. But the analysis is critical to see which KPIs your campaigns are hitting and how to apply improvements based on this data.
Some of the most important KPIs to track for email marketing include the engagement metrics like open rates, click-through rates, and conversions. How you measure the ROI of email marketing should be based on revenue and sales. It’s all good having a high send volume, but you need to know if customers are engaging with your brand’s emails. Let’s face it. You won’t generate conversions without first engaging your audience.
Most ESPs include data analytics features, so use these to improve your campaigns. Track the revenue per email to measure the performance of specific messaging, or track the click-through rates for specific promo links to see how effective certain CTAs are. Ultimately, your ROI indicates how much money your emails are making. If you don’t measure it effectively, you won’t know how to adjust your approaches for future campaigns.
Maximizing the ROI of email marketing is all about understanding your campaigns. Effective measurement, optimization, and targeting are the most effective ways to achieve the full potential of email marketing. Overall, the key to getting the best results is adapting your strategy to your brand’s target audience. Providing them with valuable, engaging content—and understanding how they interact with it—can help your team plan more effective strategies for maximizing the ROI of your email marketing.
Check out these resources for more information about email marketing:
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