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Did you know that the movie Cutthroat Island from 1995 only made $10 million at the box office? That fact may not have been so shocking if they hadn’t previously spent $98 million to produce the movie!
Obviously, you don’t need any formulas to realize that this film’s ROI wasn’t nearly as satisfactory.
But what does email marketing have to do with movies, you may ask.
Well, just like great movies, your newsletter should have a good structure, a capturing story, and be aimed at the right audience – only then can your email marketing efforts have a high ROI.
In this article, you’ll learn how to calculate your newsletter ROI based on your newsletter goals, and read useful and actionable tips on creating impressive newsletters from experienced marketing pros.
You can jump to the section you’re interested in depending on your newsletter goals:
What’s your email marketing ROI?
Statistics show that on average, businesses get $42 for every dollar invested in a well-thought email marketing strategy. That’s a pretty high ROI of 4200% – impressive, isn’t it?
Newsletters are only a part of your email marketing game plan, but according to research, more than 30% of businesses claim it’s the best way to nurture leads. And if you want to learn how much your newsletters pay off, you can use multiple formulas to calculate your newsletter ROI.
However, keep in mind that the way you measure your email marketing ROI heavily relies on what you want to accomplish with your emails. Simply put, depending on your goals, you’ll use different metrics to find out how much you’ve earned through your newsletter, and whether that amount is satisfactory compared to the number of resources you’ve invested.
Are you looking to attract more people to subscribe to your newsletter? Or have more direct purchases via your emails?
Our survey showed that most marketers are looking to get more subscribers (23.4%) and generate more clicks (22.3%) with their newsletter. A smaller percentage of marketers say the primary goal of their newsletter is a direct purchase and more opens (both 17%), while 20% of them have other goals.
When you know what your objective is, you can move on to selecting the appropriate metrics to track to learn how well you’re progressing towards your goals.
For example, if you’re looking to drive more traffic to your website through your newsletter, you will track your CTR. If you want to nurture leads, you may want to look at the engagement rate, and so on.
So, based on these goals, you will determine if you need to look at the total revenue that your newsletter brought, lead value, etc.
The simplest formula for calculating your newsletter ROI is the following:
(Money gained-spent)/money spent x 100
This formula looks pretty straightforward, but it may be challenging to figure out all the items that go under expenses.
Let’s take a look at a few.
In general, money spent on your email marketing campaigns involves the expenses related to your staff and the email marketing tools you use. Add the hourly wages of your email marketing team members to the amount of money you spend on software you use for sending newsletters.
What will this amount depend on? There are several factors to bear in mind:
To calculate your gain, you need a reliable tool like Google Analytics connected to marketing reporting software, that allows you to track sales or conversions that come from emails. Then, you can use this formula to calculate the overall gain that you can attribute to your newsletter:
Number of conversions x lead value = total newsletter revenue
The following section will reveal some of the best expert tips on how to generate more newsletter ROI with great content, a well-thought-out strategy, and on-point targeting.
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Understand traffic sources: Dive deep into your traffic data with the Website Acquisition Overview template from Google Analytics 4. Monitor where your users are coming from, their behavior on your site, and how it all ties back to your email campaigns.
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You can easily set it up in just a few clicks – no coding required.
To set up a dashboard, follow these 3 simple steps:
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We asked 95 marketing experts to share their secrets for creating captivating newsletters that generate high ROI. Here are the 15 tips they recommend based on what you’re looking to achieve with your newsletter.
Is building your subscriber list your main goal?
Our survey found that most newsletters with this purpose have a high open rate: 45.46% of them have an average open rate of 26% and more. They also have a high average CTR: almost 60% of respondents said it was above 2.6%.
To measure their newsletter ROI, most marketers who want more subscribers track conversions, email open rate, CTR, link clicks, and CTOR.
So, how do you build a list of subscribers who really enjoy reading your content?
Follow these tips.
The first step to creating a unique newsletter is to understand that this type of content also needs a unique strategy to bring results. You may email your subscribers with the latest blog posts from your website, but your blog and your newsletter have different objectives.
“Create a newsletter with its own dedicated content strategy instead of just emailing the latest blog posts to your subscribers. This will lead to higher open rates and ultimately to more conversions,” says Andrea Bosoni of Zero to Marketing, and explains how writing a newsletter is different from writing a blog post. “A blog and a newsletter have different goals. A blog needs to attract new leads while a newsletter needs to keep them engaged. It’s hard to do both because when you write a blog post you are typically constrained by picking topics that have search volume, the potential to go viral, attract links, etc. Writing exclusively for your subscribers frees you from all of this and allows you to write only things that they might find interesting.”
It goes without saying that your newsletter should offer valuable newsletter content to your subscribers. Content is king – and it’s what builds trust and keeps people around. Or even better, it makes them feel excited when they see a new message from you in their inbox.
Jasmine Williams of Jasmine Williams Media confirms it. “Write emails that are so value-packed and engaging that people don’t just read them, but are actually excited to open them every week.”
It may not be easy to create such newsletters, but Williams shares a secret: “There are a few newsletters that I read every week without fail and while I can’t fully define that special something that makes each one unmissable, one of the key things they all have in common is that they’re equal parts vulnerable, personal, and informative. The voice is so clear, so defined, that you don’t just feel like you’re reading an email. You feel like they’re speaking directly to you.” says Williams and adds: “Fostering this kind of relationship with your audience is the difference between creating a newsletter that people open and one that people read and share with their friends and colleagues.”
A lot of followers on social media won’t do you any good if those people don’t actually buy from you. The same goes for the number of subscribers to your newsletter. Mike Chapman of Barndos confirms that the quality of your subscribers is what matters.
“Even if you have a large subscriber count, if your open rate and CTR metrics are bad, then you’re not going to attract quality advertisers. It’s also indicative that your readers aren’t interested in your content (and/or you’re not solving a real problem for them), or, your email deliverability is not good.” says Chapman and recommends tracking “the combination of Open Rate and CTR. If you’re ever going to monetize your newsletter through advertising, those are the two primary metrics prospective ad buyers are going to look at, in addition to your subscriber count.”
Devoting your time and resources to creating useful, high-quality material for your newsletter will help you outperform your competition and build a loyal audience, says Edward Mellet of WikiJob. But a large portion of your success also depends on the right distribution channels of your content.
Are you reaching the right audience? “ You may start developing meaningful, high-quality content to share after your marketing objectives, channels, and KPIs have been set. The value of your work is subjective, and it is entirely dependent on the channel via which it will be disseminated. For instance, valuable material on a direct route, such as your client’s website, isn’t always beneficial on a social channel unless it’s repackaged and adapted for that channel’s optimization.”
Alexandra Cote of MKT Odyssey agrees. “Beyond the creation process, focus on promoting it in the right places. Ideally, you want your first 1,000 true fans to be people within the network you’ve previously interacted with. A high-ROI newsletter can be spotted based on the network you create around it.”
Here’s another actionable tip from Cote on how to reach people outside of your network: “It’s these people that will also help you gain more subscribers and sales by sharing it with their peers and actively talking about it. You do want to get out of your network too. Try Reddit, HackerNews, guest posting, and even launching via Product Hunt as an independent product.”
WikiJob’s Edward Mellet also reminds you that your newsletter content needs to be compelling if you want it to convert. Here’s what you should pay attention to according to Mellet:
Your newsletter content should be:
Does it matter how often you email your subscribers? According to James Pollard of The Advisor Coach, it does. “One tip for creating a content newsletter that generates a high return on investment is to email every day.”
Are you worried about that being too often? Pollard explains further: “This typically scares marketers, who have nightmares of “burning out their list” or “emailing too much”. However, I’ve found that if you can consistently provide quality information and entertainment to the people on your email list, there’s no such thing as emailing too frequently. The people who fail at emailing every day are usually the ones who bring nothing to the table. That may sound harsh, but it’s true.”
Marketers who participated in our study say their average open rate is between 16% and 25% (38.1%) and over 26% (38.09%) when they’re aiming at more clicks. They mostly focus on tracking conversions (38.1%) and CTR (33.33%), while fewer people monitor link clicks, email open rate, and CTOR as well.
So, how do you reach a high number of conversions? You may be worried that your emails sound too salesy because you’re trying to generate more clicks, but here’s a solution. Check out the following tips to improve your strategy and gain more clicks.
If you’re offering your subscribers your product or service in the first email they ever receive from you, chances are they won’t buy anything. In fact, it may make them unsubscribe immediately. Aaron Agius of Louder Online says it’s critical not to be pushy.
“As a content marketer, I can’t help but mention how important it is to not be too pushy with your newsletter. The primary purpose of a newsletter campaign is to generate attraction and increase engagement with your brand. Do not try to sell your offers with every email.”
Agius also shared his proven strategy on how often you should send promotional emails. “My golden rule for newsletter marketing is “4-1-1”, for every four informational email messages, I send one email providing a helpful external resource, and one email promoting my clients’ product. Balance is the key for long-term high ROI with email.”
Never give away all your secrets. The key is to entice your audience so they want to learn more about your product or service.
WebEngage’s Anand Vatsya says it’s all about “the crispiness of the content. Assuming we’re talking about company newsletters, they are often comprised of 4-5 different things. And it’s really important to strike a balance between what one needs to talk about right there and at what point should one ask the reader to click on “read more”. The point of a newsletter is never to tell the entire story. It’s about “introducing” something to them with “just the right amount of content” so as to incite their curiosity.”
Curious people click, and that’s great news for you if your goal is to generate more clicks and track them to calculate your newsletter ROI.
If you’re looking for the ideal combination for an excellent, ROI-generating newsletter, this is it. Consistency and high-quality, according to Kinsta’s Tom Zsomborgi.
“Our newsletter and our email list is a long-term investment. We treat it like a channel that drives engaged traffic to our website week by week. Consistency is key, based on direct feedback we know that subscribers are eager to receive it each Thursday. We never miss an issue.” says Zsomborgi, and adds that top-quality content isn’t something you should compromise with.
“The other element is truly unique and high-quality content diversified across different types. We have written content, video, and audio as well so all subscribers can find something they like. If you send it through Hubspot and you have a Databox integration there are a ton of findings you can uncover thanks to the available data.”
Tom Shapiro of Stratabeat underlines the importance of segmenting your campaigns. “An effective method for increasing the return from your email newsletters is to segment your campaigns so that your emails are more targeted for each audience. Email segmentation can be done by industry, job title, or persona. Or, alternatively, by the main challenge or area of need. Or, you can segment based on prior behaviors and actions (e.g., those who attended a specific webinar).”
This tip is incredibly useful for those who target broad audiences with different interests. “With segmented emails, the audience receives more relevant communications and messaging, which tends to increase response rates.”, concludes Shapiro.
For most participants in our survey (43.75%), the average newsletter open rate is between 16% and 25%. Around 25% of them manage to reach over 26% open rate, and the same percentage has an open rate up to 15%.
When it comes to CTR, 25% of respondents have a click-through rate between 2.1% and 2.5%, while 37.5% of them have a CTR between 2.6% and 5%. Only 12.5% of survey participants have a CTR over 5%.
To track newsletter open rate, marketers mostly monitor email open rates (43.75%), conversions (25%), and link clicks (25%). Marketers with an open rate of over 26% share some invaluable advice on how to leverage the moments when your subscribers are warmed up.
Paul Kim of Simple Rate says pushing their “top-performing affiliate content as soon as someone signs up to the newsletter” has worked well so far.
“Subscribers are warmest when they first sign up. They’re interested, they want to learn more. In our welcome email, we have a list of our top 5 posts we recommend they check out. This email always gets the highest open rates and click-through rates. Then, they’re put into our sequence which sends them an email each weekday pushing them to check out our affiliate content.
For example, our top-performing affiliate post is https://www.simplerate.ca/the-best-credit-cards/. Our top priority is to get as many eyeballs on this post as we can. So we link out to this guide in our welcome email, as well as in the PS section of each email.” explains Kim.
Ed Shub of BeenVerified says your whole strategy depends on what you’re looking to accomplish with your newsletter. Even if your primary goal isn’t ROI, you should find your primary goal and focus on it.
“Make your newsletter do one thing amazingly. If you want to generate clicks to the site then give compelling reasons for people to click. Don’t worry about conversions because that will hinder your main goal. If your content is compelling and presented in a good way in the newsletter the other things will follow. A newsletter can only do so much. If you give it two or more goals you end up doing a lot badly instead of one thing great.”
What are the most important metrics to track when your goal is to generate direct purchases? Most marketing experts track conversions (68.75%), as well as email open rate (12.5%) and link clicks (12.5%).
According to our survey, 25% of participants have an average newsletter open rate of 26% and more, and the same percentage also boasts an average CTR of 5% and above. However, the most common open rate is between 16% and 25% (for 56.25% of marketers), while exactly 50% of survey respondents said they had a CTR of 2.6%-5%.
Do you use your newsletter to sell products and services directly? Here’s how marketing experts work on increasing their ROI in this case.
How often do you pick up the phone when you don’t recognize the caller ID? Well, it translates to emails. That’s why you should use a familiar sender name when contacting your subscribers.
“People tend not to open an email from senders they don’t recognize. If you’re a well-known brand, use your brand name as the sender. To make things more personal, give the name of a real person, for example, Jackie from [your brand]. Also, make you send your emails from a real email address rather than a “no-reply” address so that subscribers can reply to your email if they wish.” says Gilad Rom of Huan.
And that’s exactly what we do at Databox too. 🙂
To sell more, you need to target a specific group of people. Identify their pain points and wishes, and talk to them about it. That’s what works for Kind Find, according to Collin Tate. “Build an audience with which you’re 100% in tune. For example, if your company sells diapers, create a laser-focused newsletter with content that matters only to new parents.”
How do you approach them? “Openly discuss topics that get overlooked or are taboo. Being in tune with your audience means knowing all of their likes/dislikes and fully understanding the problems they face. If you don’t have an in-house content creator that’s part of your target audience, hire someone. Don’t skimp out here. The quality of your audience is relational to the returns your newsletter will see — quality in, quality out.” says Tate.
Leanne Scott of Passive Income Superstars reminds us of a well-known copywriting “rule” that often gets overlooked. We should always focus on benefits rather than features. Telling people what they get from using our product or service works much better than simply listing a number of features an item has.
“Highlighting the benefits can showcase how that product or service can lead to solving a problem or achieving a goal. So for example, if you are promoting a product that will save your reader money, focus on what life will be like with that extra money. What could they afford to do that they couldn’t now? People buy into solutions, not products so show them how that product or service is going to improve their quality of life in some small way.” explains Scott.
Newsletters are a way to communicate more closely with your audience.
They give you a chance to talk to your subscribers one-on-one in their inbox, so a high-quality newsletter can do a lot for your business. It builds trust, creates a meaningful relationship between you and your reader, gives them effortless access to your best content, and warms them up for future purchases.
By following these 15 tips from some of the most successful marketing specialists, you’ll be able to create top-quality, enticing newsletters people will be eager to open. Segment, personalize, stay focused on your goal. And when you know what your goal is, you’ll easily calculate how much your newsletter pays off and how it contributes to your overall business objectives.
Apply the advice from our article and you’ll learn that the secret of a well-thought email marketing strategy with a high newsletter ROI is actually simple. Write well, and target even better.
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Stefana Zarić is a freelance writer & content marketer. Other than writing for SaaS and fintech clients, she educates future writers who want to build a career in marketing. When not working, Stefana loves to read books, play with her kid, travel, and dance.
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