Let’s discuss the revenue generated from your email marketing efforts. It’s highly possible that you might not be fully capitalizing on the potential revenue available to you.
Today, we’ll guide you through the process of evaluating and optimizing your email marketing to achieve the highest possible return on investment (ROI) from this sales channel.
There are several key areas where you can make improvements to drive up the amount of revenue generated through your email marketing efforts. By focusing on these aspects, you can unlock untapped potential and boost your business’s performance in this critical marketing channel.
Check the Percentage of Total Business Revenue.
The overall benchmark metric we tend to look at when assessing email marketing efforts is the percentage of total business revenue generated through email efforts.
The healthy range lies between 25-35%. Obviously, this will fluctuate depending on how much you are spending on advertising, etc. (i.e. if you double your ad spend in one day then of course you’ll see the percentage from email drop. It’s important to look at this in the aggregate).
If your brand is doing well under 25% you have a significant opportunity to grow in driving revenue from email. And if you haven’t been doing a lot on the performance marketing side and are seeing 25-30% it’s possible that you could get close to 40% just by dialing in the components we’re going to discuss in a moment.
Some of our clients do upwards of 40-45%, which is crazy!
The increasing percentage will vary from brand to brand, but utilizing this framework has tremendous potential to increase the effectiveness of your email efforts.
The key benchmark metric to assess email marketing efforts is the percentage of total business revenue generated through emails. A healthy range typically falls between 25% to 35%, although fluctuations can occur based on factors such as advertising spending. It’s essential to look at this metric in the aggregate to get a clear picture of overall performance.
If your brand’s revenue from email efforts is below 25%, it signifies a significant opportunity to drive growth and boost revenue through email marketing. On the other hand, if you are currently achieving 25-30% and haven’t heavily focused on performance marketing, there’s potential to reach closer to 40% or even more by optimizing various components, which we’ll explore shortly.
Remarkably, some of our clients have managed to achieve percentages as high as 70-80%, which is quite impressive! But, of course, there was some business niche-based condition involved.
The actual percentage increase will vary from brand to brand, but following the framework we’re about to discuss can immensely enhance the effectiveness of your email marketing efforts and lead to substantial revenue growth.
Look at the Split.
Once you have determined the percentage of total business revenue coming from your email marketing, the next step is to analyze the revenue split between campaigns and flows. Campaigns refer to manually sent emails, while flows are automated emails triggered by specific customer actions (e.g., signing up for your email list, making a purchase, abandoning a cart, etc.).
Ideally, you want to see a fairly even split between campaigns and flows, aiming for something like 50/50 or 60/40. If you notice a significant imbalance between the two sources of revenue, it indicates potential opportunities for optimization and increasing revenue through email marketing.
A drastic imbalance might suggest that you’re not fully leveraging the power of automated email flows or not effectively strategizing your manual campaigns. By addressing this disparity and fine-tuning both your campaigns and flows, you can unlock additional revenue potential and maximize the effectiveness of your email marketing efforts.
Check Open Rates.
Absolutely, email engagement is crucial for the success of any email marketing campaign. If your emails aren’t being opened or engaged with, it’s likely that you’ll see not so exciting number of sales as you wish.
Several factors influence email engagement, both in a general sense and when considering the specific characteristics of your target audience. However, if you consistently experience open rates below 20% on your campaigns or below 30% on your flows, there is clear room for improvement.
Low open rates on campaigns often indicate issues with audience segmentation. Sending too many emails to a broad audience or delivering poorly structured content can result in your emails being marked as spam, which will further harm your engagement rates.
To improve email engagement, it’s crucial to focus on effective audience segmentation, ensuring that your content is relevant and valuable to the recipients, and avoiding common pitfalls that might cause your emails to end up in spam folders. By addressing these issues, you can significantly enhance email engagement and boost the success of your email marketing efforts.
How can I improve my email efforts?
If you see that your numbers are low, what should you do? Usually, sending more emails is a good idea. More emails can lead to more people using your product, buying your product, and becoming more interested in your brand. But it’s important to make your emails as effective as possible by using automation and well-planned campaigns.
Automations and Flows
When optimizing your email marketing efforts, the first area to focus on should be your automated flows. These flows, triggered based on specific customer actions, have the potential to be the highest-performing emails in your strategy. As they are driven by customer behavior, they are more likely to be relevant and profitable for your store.
Ensure that you have built out all the necessary flows to cover the entire customer journey. Examples include welcome emails for new subscribers, post-purchase follow-ups, abandoned cart reminders, and re-engagement emails for inactive subscribers.
Campaigns
Next, shift your attention to optimizing your campaigns. To do this effectively, robust audience segmentations are key. Invest time in segmenting your email list into engagement tiers, allowing you to send targeted and relevant content based on where subscribers are in their buying process with your brand.
Consider setting up a sufficient number of campaigns each month. On average, it is recommended to have at least 8-12 campaigns per month, and for some brands, this number may be even higher.
Regarding segmentations, aim to have a minimum of 5 different segments of your list, though this could extend to 10-20 depending on your business needs. This level of segmentation enables you to send more emails while maintaining high open rates and conversions, as the content is finely tuned to the interests and behavior of each group of subscribers.
