Do you know the first email marketing campaign made $13 million revenue? When it comes to marketing, email marketing comes with it very confidently. Although email marketing is a very old marketing method in the world of marketing, its effectiveness still works better than many updated methods. In this article I have tried to eliminate any complications related to email marketing costing.
History of email marketing
According to Smart insights, in 1978 Gary Thuerk, a US marketer, was the first to send a promotional email blast to 400 prospects for the promotion of a DEC machine. For this he used a network called ARPANET. This was a big surprise for the recipients of these emails because this type of direct promotional email has never reached any recipient's inbox.
Interestingly, from his first email campaign, the DEC machine sold for the equivalent of $13 million. Since then a new marketing channel has emerged in the marketing world which is still in vogue.
The popularity of email marketing
You can see how successful email marketing has been from the beginning. Email has been very popular with its users since its inception. Even when it was first used as a marketing channel, there was a positive reaction from both the marketer and the recipient sides.
Its popularity among users
In 2020, an average of 306 billion emails were sent and received per day worldwide, which is trying to increase to 376 billion per day by 2025.
The number of mobile users is constantly increasing. As of December 2018, 43% of mobile users open their emails, while the open rate for desktop users is only 18%.
In terms of open rate, Gmail's position 2nd, its open rate is 27% and 29% open rate is the world's top email service is our favorite apple.
Its popularity among marketers
Most of the big companies in the world are very active in email marketing because they are well aware of its effectiveness. According to campaign monitor there are 95% of companies are using marketing automation to take the advantage of email marketing.
A marketing study shows that 122% of revenue is achieved through email marketing which is 4 times more than other social media marketing or paid search and 82% of marketers around the world spend 0-20% of their total marketing budget on email marketing alone and this is good enough.
Costing points of email marketing
If you want to do email marketing, you have to go through some steps. Different steps have different types of costing factors. After knowing each of these completely, a clear concept about the costing of email marketing can be found. Here are major 6 points.
Landing page costing
The first requirement for email marketing is a lot of email id. There are several ways to collect email IDs, but the most professional and effective is to collect targeted emails through a landing page with an email opt-in form. Where a niche related offer is made and those who want to take the offer will submit their email in that opt-in form.
Research from Hubspot found that companies that increased their number of landing pages from 10 to 15 had a 55% increase in leads and 48% of marketers created separate landing pages for each of their campaigns.
There are 4 ways to create a landing page
1. Design it yourself
This is only possible if you are a web developer yourself and it will not cost any money.
2. Go with a landing page builder agency
There are many agencies in the market that offer landing page design services. You will tell them your requirements and they will create a landing page accordingly. Different agencies charge differently. Suppose an agency charges you $250 for a job, maybe another agency can charge you $1000 for the same job. Usually $20 - $1000 you can get a landing page.
3. Hire a freelancer
There is no shortage of freelancing marketplaces in the world. Go any of the marketplace such as fiverr upwork. Experienced designers usually charge up to $250 - $1500 while new designers charge up to $10 - $250.
Designer will design according to your requirements. If you want to change the design later, there is a benefit of revision in some marketplaces.
4. Use a landing page builder tool
There are some landing page builder tools that allow you to create a landing page by drag and drop. In this case you can create a landing page as you wish without any coding.
One of the advantages of these tools is that they have many pre-designed templates that you can edit as you need. This allows you to create a landing page in a very short time.
Different tools charge differently. In this case, the more features are added, the more the price will increase. Usually their price range is between $10 - $2500.
Lead magnet costing
Lead Magnet is the offer you make on the landing page. There can be different types of lead magnets such as free ebooks, videos, free landing page templates, discounts etc. The cost depends on what type of lead magnet you want to make.
The text format can be various things like checklist, business strategy, cheat sheet, script etc. There is no cost if you make it yourself.
There are also some freelancer marketplaces like fiverr, upwork, freelancer where you can give your gift writing work to someone of your choice. Usually $10 - $350 is charged for every 1000 words.
There are also some writing agencies where you will give your keywords, subjects and other requirements and any writer of that agency will prepare your text. These places also usually charge in between $10 - $500 per thousand words. Hirewriters is a kind of agency.
Video lead magnets are usually a tutorial or a demonstration. I think the video should be made by yourself but if money has to be spent here then you have to do it for editing the video. However, if you know editing yourself, it will not cost any money.
There are several agencies that will edit the video according to your needs. If you are a new marketer, I think it would not be right to go to any agencies because their price is very high. To my knowledge, the minimum rate of these agencies is $70 and the highest is Unlimited.
I think freelancers should opt for low cost video editing. If you want to edit a short video, you can have a freelancer to do your job today with just $5. Freelancers of upwork usually work $15 - $35 per hour.
Using an email marketing tool
You must use an email marketing tool to do email marketing. There you will find a variety of email templates that you can edit and use, you can create autoresponders and send newsletters.
In this case, the more features are added, the more will be charged. Along with the feature, there is also a matter of the number of subscribers. If the number of your subscribers exceeds a certain amount, you will have to increase the charges.
Different email marketing tools charge according to their pricing design and provided features. In this case, some tools take $10/m for 500 subscribers and some tools take $15/m for 1000 subscribers. You will generally get a good email marketing tool between $10 - $100 /m.
Your email templates must have a variety of related pictures. I have told the necessity of picture in email bellow of the article. Many amateur marketers download free images from online and use them which do not cost money but are unethical.
If you are a graphic designer then you can make your own unique picture with no of cost. If not than you can hire any freelance graphic designer. You will find designers from $5 to unlimited.
There are also some picture builder tools that can be used to create pictures by drag and drop. One of the advantages of these is that they have a number of picture templates that you can use according to your purpose. The price of these tools is usually $5 - $100 /m.
You must know that there are several stock images platforms where there are numerous images stored that you can download and use. Their subscriptions can usually be up to $5 - $100 /m.
List buying cost
There are many new and old marketers who are very interested in buying an existing email list. I don't like it but since people are interested I have added it to the list of costing points.
When I started marketing 7 years ago, I saw that every thousand email ids were selling at $800 - $2000. However, the days have changed and now many people have email lists so the number of sellers has also increased as the number of buyers has increased.
At the time of writing this article, I found out by researching and calculating that the price per thousand emails is $100 - $300. However, according to the countries and languages, the prices of emails vary a lot.
Cost of time
I don't think any marketers think about this before starting email marketing. No one told me this before I started email marketing. But I say you must patiently invest your time after all time is the ultimate money.
You must set autoresponders for email marketing. In my first email marketing campaign, I set up 73 autoresponders. It took me 13 days to write these 73 emails.
You also need some time to create landing page and lead magnet.
So keep this in mind before you start email marketing
There is no point in spending on email marketing if it does not increase your success rate. So you should pay more attention to its success rate than the cost of email marketing because increasing the success rate will automatically reduce the cost rate.
How to measure email marketing success rate
Many marketers’ especially new marketers do not understand how they will measure success. In most cases they think the higher the sales rate of the product the higher the success rate. However, this is partially true. The whole truth is that if you want to maximize product sales or conversions, you need to focus on 6 metrics. The higher your success rate the higher your revenue.
You have to pay special attention to the open rate first. The body of your email will be able to do the maximum work only when it gets the highest open rate.
According to Campaign Monitor research, the average open rate is 17.8% and government emails can achieve the highest open rate which is 30.5%. So if you can keep an open rate of 17.8% or more, you can be said to be successful
CTR (Click through ratio)
Click through ratio is the amount of clicks you receive from Total Send Emails. Suppose you have sent emails to 100 people and from there 10 people have clicked on your email then your click rate is 10%. According to the 2021 benchmark, the average CTR is 10.29%.
CTOR (Click to Open Rate)
Click-to-open rate is the amount of clicks from the number of subscribers who have opened your email. Suppose your email has been opened 50 times and clicked 10 then your CTOR is 20%. The average CTOR is 14% but this allover result. There is a chance to get greater or lower CTOR with your specific niche. You have to test it.
List growing rate
For getting greater list growing rate you need keep look on your landing page conversion rate. The higher the conversion rate of your landing page, the better your email list will grow. 10% of websites have a conversion rate of 11.45% and this is the highest. The overall conversion rate is 2.35%. So you have to test so that you can grow up your list consistently.
You need to keep the unsubscribe rate of your email list as low as possible. Non-profit organizations have the lowest unsubscribe rate of 0.6%. You should worried about when your unsubscribe rate is over 0.4%.
There are 3 things to lower the unsubscribe rate
This is your ultimate success. If you can get good results in all the above metrics, your conversion rate will automatically increase. In 3 steps you can calculate conversion rate
1. Define your goal: You have to decide what will be counted as conversion. Your goal can be open rate or click rate or making sale.
2. Set the base: This is the base point from where you will generate the conversion rate.
3. Calculate: If your base point is open rate which is 40% and your goal is Click rate which is 12% then you conversion rate is (open rate ÷ goal) × 100 = 4.8%. So your conversion rate is 4.8%.
How to get the top success rate against email marketing costing
After investing money in email marketing, if you can't use it properly, it will be a complete loss project for you. According to Constant contact, in 2021 the average revenue from email marketing is 4200% which is $42 revenue for $1. So this information will never be true for you unless you use the email marketing tool properly and you can’t use those 72% of people who like to get promotional content via email.
Eye catching subject line
You are sending email but if your subscribers do not open it then at this stage your cost will remain in the same place but revenue will decrease i.e. your profit will also decrease i.e. cost will increase.
On the other hand, as the open rate increases, so does your conversion, which means that the profit is higher at the same cost, so from this point of view, the cost decreases.
Here are some important stats about email subject lines
You must use at least one relevant picture in an email because research has shown that a relevant picture can increase a person's willingness to read about it by up to 80%.
Another study found that 65% of people prefer to have a picture in their email, while 35% prefer to have only text in their email.
I think you understand that you should use at least one relevant picture to increase the chance of getting your email read by the subscribers and it will definitely have a great impact on your conversion rate.
Whether you know it or not, business is born out of scarcity. If there is a lack of solution to any problem in the market, you can easily create a solution and monopolize the business until a competitor born. A subject line that creates a kind of crisis or a rush in people has a 22% chance of increasing the open rate.
In 1975, a group of researchers wanted to see how scarcity affects human psychology. For this they put 10 cookies in one of the two identical glass jars and two in the other. Their purpose was to see what people valued more. Although the two jars are the same, it is later found that most of the participants are paying more for the items in an empty jar nearby.
It is clear from this that scarcity has a big impact on their values. Moreover, a study has shown that the urgency can increase the CTOR by at least 14%.
Mobile friendly email
You would be surprised to know that the total number of mobile users in the world is currently 3.8 billion in 2021 which is 8.5% more than in 2020. If the world's total population is 7.7 billion, that's about 45.4 percent of the total population, which means that about 5 out of 10 people have a mobile phone.
Maybe you understand why a mobile responsive email is so important. On top of that when you know that 70% of recipients ignore or delete emails immediately if they are not mobile responsive then you will realize how much money you are wasting just because you do not have mobile friendly emails.
The key to doing well in marketing is to test, test and test more. Alex Kelly of MailChimp says ecommerce brands that a/b test generate 20% more revenue from email marketing. But surprisingly, 65% of companies do not pay attention to their automated email a / b test. On the other hand, 76% of companies do not pay attention to their transactional email a/b test. I think you must do a/b test for maximum return on money.
Way of testing
The way I test, first I separate 20% of my entire list. If I test the subject line, I send emails with one subject line to 10% and emails with another subject line to the remaining 10%. From this I can easily understand which subject line is working best for me.
- 1Subject line is the most important for opening your email. So you must test subject line.
- 2Email timing is very confusing fact. There is a very chance to not work any statistics for your subscriber. You have to find it what is the perfect time to send email to your subscriber by a/b test.
- 3Sender name sometimes improve open rate. You know people will see the sender name first than subject line. HubSpot has known from an email marketing experiment that an e-mail with a company name with an open rate of 6.57% and an e-mail with a personal name at an open rate of 7.10%. Yet unfortunately most companies do not pay much attention to Sender name. You should test it.
Some important stats about email marketing (Bonus)
Hope you got a good idea about the cost of email marketing. I'm sharing some more important stats about email marketing that will help you get a better idea of what has been or is being researched about email marketing so that you can have clear concept of costing and the possible feedback your campaign.
I've tried to dispel confusion about the costing of email marketing but I don't know how successful I have been. If this article feeds you a thought then it is worthwhile. Finally, I would like to say do email marketing but do not spam. If you do spam your money will go, it will not come. Email to really help people and stay relevant.