Small business companies which are looking for low budget ways to market their products or business, usually find email marketing as great solution.
A lot of successful people from Internet marketing rely on this way of marketing for most of their sales. But really important question is, can email marketing really work for your business?
First, what is email marketing exactly? Well, it's a way of marketing done via email.
Interested users sign up to receive emails from business website, which is usually in some form of newsletter, or business owners create their own email lists of potential target group of people or companies.
In some perfect world, the people we send our emails to would read them, find out about our businesses, product, promotions etc. and maybe become a customer. But of course, it's not really like this. People don't like to read mails from unknown companies, or about some random businesses or products. That's why, there is a big question, does email marketing works at all?
Let's start with some facts.
Spending on email marketing in the US is expected to expand to $2 billion by 2014 (Source: US Email Marketing Forecast, Forrester Research, June 2009).
You should be aware also that 67% of marketers increased their email marketing budgets for 2012. (Source: 2012 Email Marketing Benchmark Report, Marketing Sherpa).
Surprisingly or not, email has the highest ROI of any direct marketing channel:
$40.56 for each dollar spent in 2011;
$22.24 - Internet Search Advertising;
$19.72 Internet Display Advertising;
$15.22 - Non-catalog Direct Mail;
$10.51 - Mobile. (Source: The Power of Direct Marketing, The Direct Marketing Association, October 2011).
In order to get to right conclusion, we have to define which metrics we will follow to create it. This can be ROI (Return Of Investment), which is not so easy to calculate and get precise results, or we can use RPE (Revenue Per Mail) as our metric.
For beginning, you are aware of the facts, and the conclusion is obvious. Email marketing does work, and works good! But, if doesn't works good for you, then you should try to investigate where is the problem in your email marketing strategy. First thing you can do is to try different metric to get your conclusion. Instead od ROI, try to calculate RPE.
For calculating RPE, for difference from ROI, you don't need to know your marketing costs. The good thing is that using this metric, you can feel how much revenue you are generating from your email marketing campaigns. We will not go into details how RPE is calculated now, but the basic formula is: Generated revenue/(Sent email quantity - Number of bounces).
The key point to more successful email marketing is definitely your email list growth. It's not just about getting a high quantity of contacts on your list, but it's also about having quality contacts. You have to be really careful when researching your target group and potential customers.
Of course, this is just one of many key points for more successful email marketing strategy, but that's another topic, for another article.