Email marketing is also less expensive than conventional marketing methods. You won't have to pay for print, packaging, ad space, or any of the other expenses that come with it.
The return on investment (ROI) for email marketing has increased to £32.28 for every £1 invested, up from £30.03 the previous year. According to the DMA's Marketer email tracker 2018 survey, sponsored by dotmailer, half of the marketers (50%) are now con%fident in their ability to measure this ROI figure accurately, while only one in five (19%) believe they can estimate the lifetime value of an email address to their company.
"According to an eMarketer survey, in 2021, over 4 in 5 individuals in the US will use email at least once per month, according to our latest projections. We forecast that the total number of email users in the US will reach 277.7 million in 2024, representing 81.2% of the US population. Moreover, there is ample evidence that the pandemic actually grew email’s prominence as a touchpoint between brands and their consumers. It’s not just US email usage that’s on the rise: Radicati Group projected that the number of global email users will rise from 4.04 billion this year to 4.48 billion in 2024."
The cost of doing something and the results produced as a result (typically calculated in benefit, but for this discussion, let's use revenue) are the two primary metrics used to calculate ROI.
The most common answer to the question "how to measure ROI" is a formula:
Marketing Cost / (Attributable Revenue Growth - Marketing Cost) = ROI
This method of estimating return on marketing investments has a few drawbacks.
For one thing, depending on how you calculate effects and costs, measuring marketing ROI can be difficult. It can be difficult to assess how much of a company's revenue increase is attributed to a marketing campaign. Large companies use complicated ROI formulas and algorithms that take into account thousands of variables.
Second, manually calculating marketing ROI for each campaign takes time and includes access to company financials.
Finally, this method necessitates patience. It could take months to determine whether or not a campaign was profitable.
In a nutshell, the "traditional" method of measuring marketing ROI isn't always realistic. We need a more effective process.
So set the complicated calculations, attribution models, and algorithms aside and concentrate on one basic metric: the sales to marketing expense ratio.
The centre of the bell curve is a 5:1 ratio. For most companies, a ratio of more than 5:1 is considered strong, and a ratio of more than 10:1 is exceptional. It is possible to achieve a ratio greater than 10:1, but it should not be the target.
Your target ratio is primarily determined by your cost structure, which varies by industry.