Email marketing enjoys the best Return on Investment (ROI) of any online marketing channel. In 2007, the average ROI for email was around $49 dollars for each dollar spent. In 2006, it was around $52 and in 2005 it was as high as $57 on average. While the ROI for email seems to be dipping year after year, it continues to be a reliable earner and a solid investment.
But why is the ROI dipping year after year?
Spam could certainly have something to do with it. The increase in email filtering systems and other anti-spam mechanisms make it more difficult to get messages delivered to inboxes today, affecting delivery rates. And when delivery rates are affected, so too are opens, click-throughs and conversions. But there is another reason why the average ROI in email isn’t moving in the other direction.
It’s too easy.
And when something is too easy, we often tend not to work hard at it. By taking the easy road and continuing with the batch and blast mentality of the 20th century, we fail to capitalize on the opportunity that email marketing offers. By not investing adequate time and resources in developing effective email marketing strategies and practices, we are accepting sub-par performance.
Stephanie Miller discusses how our complacency with email marketing today can lead to problems in the future – not only in terms of ROI, but with our brand, reputation and trust.
“…Here’s the challenge. We send out a message, we get revenue. That’s good! But that isn’t the end of the story. Sending out messages that are irrelevant to most of your file has other costs. Look at your unsubscribe rate. Check the complaint rate (subscribers clicking the “this is spam” button). Both will rise when you send irrelevant or too frequent messages. The cost to replace these subscribers and maintain your file accuracy will cut into that incremental boost. Plus, in every case we’ve seen, the non-responder rate (subscribers with no opens or clicks) also goes up dramatically.
It’s not so hard to see why. When we abuse the trust that subscribers give us and send boring messages or more email than could possibly be relevant, subscribers tune all our messages out. They may not actually unsubscribe or complain to the ISPs, but they “emotionally unsubscribe.” They unsubscribe with their delete button. These subscribers are now lost to us.
Add up all that collateral damage, and your ROI may be much less or even negative…”
There’s no reason that your email marketing ROI isn’t $85 for each dollar spent. Just like other benchmarks, you aren’t bound by annual ROI averages – unless you accept them as good enough.
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