How Do You Calculate ROI in Email Marketing?

How Do You Calculate ROI in Email Marketing?

Measuring Success: How to Calculate Your Email Marketing ROI

Email marketing is an effective way to connect with your target audience and promote your business. You can reach many people quickly and cost-effectively through this channel. The email marketing ROI(return on investment) is an impressive $36 for every $1 spent. However, to maximize your email marketing efforts, you must measure your email campaigns‘ ROI.


It is important to note that ROI can vary depending on a number of factors, such as the industry you are in, the quality of your email campaigns, and your target audience. However, by tracking your revenue and expenses, you can get a good understanding of how effective your email marketing campaigns are and make necessary adjustments to improve your ROI.


Why Measure ROI of Email Marketing


In this blog post, we’ll discuss how you can measure the ROI of your email marketing campaigns:

⏩Calculate ROI: Take cognizance of every penny spent on email over a specific time frame to track email marketing ROI. To calculate the ROI of your email marketing campaigns, you first need to calculate your spend and gain, take out their difference to get the revenue, and then divide it by your spend and multiply by 100 to get a percentage.


ROI = (Total revenue – Total expenses) / Total expenses

For example, if your email marketing campaigns generated $100,000 in revenue and cost you $50,000 to run, your ROI would be 100%. This means that for every dollar you spent on email marketing, you earned 2 dollar back.


You should also keep testing and optimizing your email marketing campaigns to get the most out of them. Try different subject lines, email content, and calls to action to see what resonates best with your audience. Use A/B testing to compare different versions of your emails and see which performs better. Continuously doing this improves the ROI over time and maximizes your investment.


⏩Set goals: Before you can measure the ROI of your email marketing campaigns, you need to set goals that should be SMART, i.e., specific, measurable, attainable, relevant, and time-bound. For example, your goal might be to increase sales by 10% within the next six months. Once you have set your goals, you can use them to measure the success of your email marketing campaigns.


⏩Track conversions: The next step in measuring the ROI of your email marketing campaigns is to track conversions, the action you expect from your subscribers after receiving your email. This could be purchasing, filling out a form, or signing up for a newsletter. You can see how many people are taking the desired action due to your email by tracking conversions.


You can use tools like Google Analytics or your email marketing platform’s built-in tracking to track conversions. You can also use unique links or codes in your emails to track conversions more accurately.


⏩Calculate revenue: Once you have tracked your conversions, you need to calculate the revenue your email marketing campaigns generated. It will show you how much money you make from email marketing efforts. You must multiply the conversions by the average revenue per conversion to calculate revenue. For example, if you had 100 conversions at an average revenue of $50 per conversion, your revenue would be $5,000.


⏩Determine costs: To calculate the ROI of your email marketing campaigns, you also need to determine the costs. It includes the cost of your email marketing platform, any fees associated with your email list, and the time and resources you invest in creating and sending your emails. Once you have determined your costs, you can subtract them from your revenue to calculate your ROI.


⏩Monitor engagement metrics: In addition to tracking conversions and calculating revenue and costs, you should also monitor engagement metrics. These metrics can give you insights into how your subscribers interact with your emails. Some key engagement metrics to monitor include open rates, click-through rates, and unsubscribe rates. You can adjust your email marketing campaigns to improve their effectiveness by monitoring these metrics.


⏩Monitor the lifetime value of your subscribers: Another critical metric to monitor when measuring your email marketing campaigns’ ROI is your subscribers’ lifetime value. The lifetime value (LTV) is the estimated revenue a subscriber will generate throughout their relationship with your business. It considers purchase frequency, average order value, and retention rate.


To calculate the LTV of your subscribers, you need to multiply the average revenue per customer by the average lifespan of a customer. For example, if the average revenue per customer is $100 and the average lifespan of a customer is two years, the LTV of a customer would be $200.


By monitoring the LTV of your subscribers, you can better understand the impact of your email marketing campaigns on your overall revenue and profitability. You can also identify which segments or types of subscribers have the highest LTV and focus your email marketing efforts on them.


⏩Compare the ROI of different marketing channels: Finally, to make informed decisions about your marketing budget and resource allocation, you should compare the ROI of your email marketing campaigns with those of other marketing channels. It can help you identify the most effective and efficient media for reaching your target audience and achieving your business goals.


Calculate each track’s revenue, costs, and engagement metrics to compare the ROI of different marketing channels and divide the revenue by the costs to get the ROI. You can then compare the ROI of email marketing with other channels, such as social media advertising, paid search, or content marketing.


By comparing the ROI of different marketing channels, you can optimize your marketing mix and allocate your resources where they will impact your bottom line.



Measuring the ROI of your email marketing campaigns is crucial for optimizing their effectiveness and maximizing your investment. By following the above-mentioned steps, you can improve the ROI of your email marketing campaigns and achieve your business objectives. 


Email marketing is not a one-time effort but a continuous learning, testing, and improving process. Adopting a data-driven and customer-centric approach to email marketing can build stronger relationships with your subscribers, increase their loyalty and lifetime value, and drive sustainable growth for your business.


Contact our experts to achieve higher inbox placements and deliverability and generate maximum ROI for your email marketing campaigns.




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