How to Get the Most from an Email Marketing Budget
You’ve got big ideas for where you could take your email marketing program, and you’ve got plans for how it could positively impact your company. Anything that’s worth doing takes two things: time and money. And as the saying goes – time is money.
In this article, we discuss how to get the most out of email no matter how much you have to spend. We’ll go over some of the basic concepts from the book, including how much email marketing campaigns should cost you, what goes into an email marketing budget, and how you can measure metrics like return on investment (ROI), open rate, or conversion rate.
How much should email marketing cost?
Because every situation is unique, how and when you ask for a bigger slice of the marketing budget will be different for every email team.
Ultimately, it depends on the sophistication of your current program and your team’s established workflow. Are you starting from scratch, do you have a top-tier marketing program, or are you somewhere in the middle? Does your email strategy feed into your social media channels and vice versa? It’s an entirely different conversation based on the pre-existing level of buy-in within your organization.
If you’re just beginning to build a robust email marketing program, you’ll be in a completely different spot than an email marketer who has the data and results to prove what email can do for the company. In general, email has an ROI of $35 for every $1 spent. Depending on the email marketing service you use, your costs can be between $10 to over $755 per month. (You could get your email marketing underway for free with Mailjet by Sinch.)
What goes into the email marketing budget?
Every situation is different, so it’s hard to give just one number for your email marketing costs. However, here are some components that go into building your email marketing program. Price these out to determine your marketing budget.
The key determinants of your email marketing plan are:
- How will you create your email content? Let’s start from the basics. To run your email program, you’ll need some emails to send. This includes email design as well as creating HTML email templates. You can do your design in-house or hire an email designer. Similarly, you can build your email templates from scratch or use a drag-and-drop email builder.
- How will you send your email? This is an infrastructure question. Now, while you can manage your own SMTP server and send your emails using an email client like Gmail or Microsoft Outlook, this doesn’t really scale. Depending on the number of emails you’re sending, you’ll probably need an email service provider (ESP) to handle your sending infrastructure, email deliverability, IP reputation, and send-time optimization.
- How can you assure the quality of your emails? Before you dispatch your messages, you’ll need a way to make sure your messages display as you intend. To do this, you’ll need an email testing tool, like our Campaign Precheck functionality.
- How can you gauge the success of your email program? Part of budgeting for email marketing is being able to assess your email program. Look for an ESP that enables you to use logs and analytics to determine the health of your email program. We’ll talk more about this in the next section.
- How can you collect and use the data from your email program? Part of email marketing is being able to leverage the customer data you gain from your interactions with your readers. Customer Relationship Management (CRM) services help you use the data you collect to build a better customer experience for your readers.
How can I measure email ROI or email marketing ROI?
So you’ve asked for money to allocate to your email marketing budget. As a small business or even a larger corporation, you’ll need to be accountable for the money spent.
While marketing isn’t always a numbers game, you’ll still need a way to account for the performance of your email marketing program. This means using metrics to determine your email ROI. Not sure where to start? Check out what our friends at Mailjet have to say about calculating email ROI.
Let’s get into the math. The easiest way to calculate your ROI is with these two numbers:
- Expenses related to email
- Revenue from email
To calculate ROI, subtract your expenses from your revenue to get your profit. Then, d
ivide your profit by expenses. For example, if you generated $10,000 in revenue and had $1,000 in expenses, that would be $9,000 in profit. Divide that by the $1,000 in expenses, and you get $9, or a 900% ROI.
But in reality, it’s not quite that simple. Here’s why. To get a true ROI:
- You have to factor in all the costs. This includes employee salaries and all the expenses of sending, marketing, and testing emails.
- You have to consider the different types of email conversions. For instance, your customer could make a purchase, or they might simply sign up for a free trial or leave a review. However, these all factor into your conversion rate.
- You’ll need to find a way to represent what a click means. The click-through rate (CTR) is an easy way to gauge the performance of your email. However, how many dollars is a click if your customer leaves without making a purchase?
To truly get a sense of your email marketing ROI, you might need to take advantage of email marketing software. What should I consider when budgeting for a brand new email marketing program?
There’s a lot to consider if you’re starting from zero. Before you allocate your budget for email, you must have a solid foundation to build upon. Here are some things to consider when you’re building a new email marketing program:
- How do I build an email list?
If your program is brand new, consider putting money into an acquisition initiative to build up your list of contacts. We may be preaching to the choir here, but don’t assume you can buy a list of emails, start spamming people, and have money start pouring in. It doesn’t work that way and never has. That means you need a quality list of subscribers, which you’ve built organically. Learn more about building and maintaining an email list.
- How do I maintain an email list?
Always use email verification to maintain mailing list hygiene. If you can segment that list, all the better.
- How do I collect and use data?
Another key consideration for email marketers at the outset of a new program is data. Email offers an incredible amount of valuable marketing insights and customer information, which is powerful when used wisely. But, you must be able to trust the data you collect and keep in mind how you might use data as your program grows. Choose platforms that easily integrate with others and have a plan for scaling your marketing technology.
Benefits of a solid email marketing strategy
When you’ve got that list and a scalable method for collecting reliable data, it’s time to put email marketing into gear. The first thing to do is highlight the potential value of email and how it will help accomplish specific business goals. Speaking of, here are four benefits of a solid email marketing strategy:
- Email’s affordable.
- Email’s highly trackable.
- Email’s the unique identifier for individual customers.
- Email works beyond top-of-funnel marketing.
Let’s go over each of these below.
1. Email’s affordable
Beyond an ESP, it doesn’t cost much to get started with email marketing. Once you build a list of subscribers who want to hear from you, you’ll have an extremely affordable channel for reaching customers and prospects.
2. Email’s highly trackable
In comparison with traditional marketing (print, broadcast, direct mail, outdoor), email provides a ton of valuable data your team can use to understand where people are in the buyer’s journey. While you can certainly track other types of digital marketing, email offers a unique look at behavior because it involves the intimacy of the inbox.
3. Email’s the unique identifier for individual customers
A valid email address is as good as gold to digital marketers. People often keep personal email addresses longer than physical addresses or jobs. Think about it. You need an email address for every device you use, and it goes with you any time you buy a new phone.
People use their email to log in to many other online accounts, making it possible to retarget prospects or build look-a-like audiences for digital advertising. Because it’s a form of digital identification, access to email also allows you to craft better, personalized experiences. As your program becomes more sophisticated, you can use email to create a cohesive, historical picture of your customers’ online activities and preferences.
4. Email works beyond top-of-funnel marketing
Most ecommerce marketing tactics are designed to grab the attention of prospects and raise brand awareness. But what happens after that? Email is the most effective way to stay in contact with new leads and nurture them until you convert them into customers. Too many sales and marketing funnels are clogged with people at the top. Email helps move things along.
It works with current customers, too. For example, you wouldn’t want to use PPC ads and pay to try and reactivate dormant customers, but email is perfect for re-engaging those contacts!
No matter how mature your program is, highlighting the benefits above will remind decision-makers in your organization of email’s true value. These benefits are worth mentioning any time you’re asking for more budget.
How do I level up my email marketing strategy?
Once you’ve laid the groundwork for a successful email program, it’s time to turn things up a notch. How will you use email marketing to level up? There are plenty of options, from hiring new talent or a strategic partner to purchasing new technology or enhancing emails with show-stopping new features.
No matter what you believe is the right choice for the future of your program, you’ll need to answer a few key questions when you ask decision-makers for buy-in:
- What’s the cost of email marketing? Be upfront about how this initiative will impact the overall budget.
- What can you do with it? Describe how your idea solves a problem or provides specific benefits to the company
- How will you support it? Tell them how you’ll take full advantage of the investment. Explain how you plan to utilize existing resources (tools, teammates, time).
As you pitch your ideas and ask for the budget to make them happen, remember that you aren’t the only one making asks like this. There’s a finite amount of budget.
How do I master email marketing campaigns?
Once you level up and start “running,” it’s time to use email marketing budgets to help your team master the channel. How can you become faster, more efficient, and more effective?
Top-tier marketers have all the data they need to prove the importance of email. In fact, they may not even need to ask for bigger budgets. A survey featured in our white paper, Success in the Inbox: Keys to Email Marketing, found that more than 80% of successful marketers already planned to invest in email.
So the question is, where’s the best place to invest? When it comes to email marketing technology, two of the most impactful options are automation and analytics.
When implemented effectively, marketing automation can save a lot of money, and more importantly, it can save your team a lot of time. When you understand the customer journey, you can build automated yet personalized email experiences for them.
Also, when you automate repetitive or tedious tasks, you free up your team’s time, so they can work on more important projects. Automation enables you to try new things and grow without compromising in other areas.
Analytics for email will give you insights into where you should use your budget. But the real accomplishment is the ability to connect data from email marketing to other analytics platforms and separate areas of the business.
That often becomes a challenge as a company grows. Different teams start using different platforms, and you end up with a bad case of data sprawl. What’s needed is one source of truth or a single location to consolidate and compare information from different sources. In this case, investing in better analytics could become a company-wide initiative that draws from more than just the budget for email.
Why should I ask for a bigger email marketing budget?
What’s amazing about email is it’s a full-spectrum technology. You can use it for customer acquisition, retention and loyalty, education, reactivation, transactional purposes, and general communication with subscribers. Email plays a key role along the entire customer journey. It’s hard to say no to budgeting for something like that.
Keep in mind that because you don’t need a big budget to make things work, scrappiness in email marketing goes a long way. However, it’s also true that bigger email marketing budgets help you achieve even more, especially when you’ve got a plan.
When you do invest in email, make sure you protect that investment. An email readiness platform that lets you test and optimize campaigns before you hit send makes a ton of sense. Email on Acid provides a suite of pre-deployment tools that ensures you deliver perfection every time. That includes email previews on over 90 clients and devices, as well as spell check, URL validation, email deliverability help, and email accessibility tools.
Get extra advice from six other marketing thought leaders in our eBook, Maximizing Your Email Marketing Budget.
This article was updated on October 10, 2022. It was first published in December of 2020.
Author: The Email on Acid Team
The Email on Acid content team is made up of digital marketers, content creators, and straight-up email geeks. Connect with us on LinkedIn, follow us on Facebook, and tweet at @EmailonAcid on Twitter for more sweet stuff and great convos on email marketing.