Is your newsletter a good business? Find out by calculating your ROI – Return on Investment. But first, you must be aware that the result depends on your goals for your newsletter. Is your goal to make your audience sign up on your web page or to sell a specific product? And what is the value of a conversion?
When you have identified a conversion and how much it is worth, you can start calculating the ROI for your newsletter.
Did you know that you can achieve an average return of 36$ every time you invest 1$ in your newsletter (Litmus, 2021)? You receive a higher return on investment through email marketing compared to other marketing activities. In other words, your newsletter adds excellent value to your company.
How to calculate your Return on Investment
When you calculate the ROI for your newsletter, you compare money gained versus money spent by using this simple equation:
(Money Gained – Money Spent) / Money Spent x 100
You determine the money gained by tracking sales/conversions in Google Analytics. Then you multiply the number of conversions by the value of a conversion, and then you have the amount of money gained. It seems very easy, but before you reach for your calculator, you need to identify the money earned and the money spent.
Determining the money spent is not as simple.
Money spent
The money spent on your email campaign is typically connected to the marketing team who creates content, designs, sends, and analyses the newsletter. How many hours does your team spend on the newsletter? And what are the expenses associated with the platform you use to send out your newsletter?
The money spent also depends on your industry, the number of employees in your marketing team, how many different segments you create newsletters for, how often you send your newsletter, the design of your newsletter, and whether you use an external agency specialized in email marketing.
When you have created an overview of your total expenses, then calculate the ROI for your newsletter.