Email marketing ROI calculator
Email marketing ROI calculator
Return on the campaign cost, the money made per recipient and the revenue needed per send to break even.
How this is calculated
ROI = ( revenue - cost ) / cost x 100.
- Attribution is the hard part, not the arithmetic: a campaign given credit for a sale that was going to happen anyway reports a return that was never there.
Return on a campaign is the profit it made over what it cost. The formula is short; the revenue figure underneath it is where the judgement sits.
Attribution decides the answer
Revenue attributed to a campaign is not revenue caused by it. A list of existing customers was going to buy something; the question is whether they would have bought anyway and whether the campaign moved the date, the size or nothing. Two teams running the same send can report opposite conclusions from the same figures because they drew the attribution line in different places.
The plainest test available without an experiment is a holdout: send to almost everyone and hold a small group back, then read the difference rather than the total. Where a holdout is not possible, at least state the rule used.
What the cost has to include
A platform fee is the visible part. Design time, list growth, the offer itself and any discount given to make the send work are all costs of the campaign, and a return computed on the fee alone flatters the exercise.
Questions readers ask
Is a negative return an error?
No, it is an ordinary answer. A campaign that cost more than the revenue credited to it returns a negative figure, and the useful follow-up is whether the attribution rule is understating a longer payback period.
Delivered or sent?
Delivered. A bounced address cost nothing and should not sit in the denominator, which is why the field asks for delivered rather than the number of addresses in the list.
Should revenue be gross or margin?
Margin, if the number is meant to describe money kept. Return on revenue answers a different question from return on profit, and a campaign can look excellent on the first and poor on the second.
What is the break-even figure for?
It is the revenue each delivered email has to produce for the campaign to cost nothing. Compared against what a send has produced before, it is a faster question than the ratio itself.
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