Small Business Toolkit

Email Marketing ROI Calculator

Email Marketing ROI Calculator

You’re no doubt familiar with the term email marketing; email marketing is the process of promoting your product or service via email.

Email marketing is an efficient marketing channel when used correctly, that’s why we created a calculator to help you work out your email marketing ROI.

Calculate your Email Marketing ROI


How do businesses use Email Marketing?

Email marketing can be used as a marketing channel throughout any stage of the customer journey. From awareness to conversion, email marketing is an adaptable channel that can used to generate sales, capture leads and generally make sure people remember you.

There are many types of email that you can send, here are just a few.

Informational Emails

Informative emails are those that are usually what is called one-to-many, i.e. the same email is sent to all of your subscriber list.

These types of emails usually consist of newsletters, ebooks, or advice.

Remember when you’re sending emails you want to provide your customer with a reason to check out your email and website, so what better way to do so than giving them useful tips and advice.

Informational emails are also used to send out updates on content to let users catch up on what they’ve missed, this could be your latest blog post or a product update.

The one thing to remember is, you can and should only send these types of emails to subscribers who have given permission to do so.

Here are a few examples of some popular forms of informative emails:


Newsletters are used by almost all businesses, corporations and even schools and used to let customers know what’s going on in the company.

They keep customers up to date on company policies, holidays and upcoming or ongoing offers.

In a way newsletters are quite useful, they increase the perception that customers have about a business and provide relevant information or offers on new products or clearances.

Newsletters can prompt customers to convert or spread the word of the business.

A great example of this is Innocent smoothies; their newsletter perfectly encapsulates their brand, it’s both funny, witty and informative.

Content Catch Up

Another common type of informative emails are catch up emails. These are sometimes sent out weekly or monthly, or whenever you have new content. They can also be personalised to users who haven’t visited their website in a while.

When done right catch up emails can provide your customers with the chance to catch up on useful content that they missed.

Remember when it comes to catch up emails to make it as much about your customers as you make it about yourself, business or content.

This adds a layer of personalisation and can make the difference between click or bin.

Promotional Emails

Promotional emails don’t usually have a set schedule and are sent whenever there is an offer or promotion.

These types of emails are used to entice a customer into clicking and converting and are quite easy to implement.

The one main thing to keep in mind when it comes to promotional emails is to make your offers clear.

Some people may not read through the entirety of a promotional email so having your offers in in front of them will make them almost impossible to ignore.

A few things to remember are to keep it short and simple, there’s not a whole lot you need to tell a customer when you’re promoting a product.

Just let them know the deal, how they can redeem it and the expiration date of the promotion.

You could create a graphic with the product and the offer details on and leave it at that.

Transactional emails

Another type of emails you can send are transactional emails. Transactional emails are emails that are sent when your customer triggers an action.

The most common use of transactional emails are order confirmations and receipts. Almost all of us has probably received one of these. Whenever you’ve made a purchase, you’ll have received one of these.

These are known as one to one emails and are only between the customer and the business.

What Makes Email Marketing So Useful?

Despite what you might hear, email marketing is still a very useful tool, partly because of what we talked about above, and for a plethora of other reasons.

Back in the early days of marketing and the cave man years of the internet, spam was pretty prevalent and gave emails a bad name.

But believe it or not in recent years because of things like filters, email marketing is getting a much better reputation.

According to reports from DMA “email marketing is the king of the marketing kingdom with a 3800% ROI and $38 for every $1 spent.”

No other marketing channel is reported to have that high of an ROI.

If we look at some more reasons why email marketing is so important we can compare it to other advertising channels.

Let’s look at social media. Social media may have the potential to reach more people, but if those people are offline, it means they won’t see your ads or promotions when they next log in due to an influx of fresher posts. That’s where emails come in.

Most if not all of the time your emails will at least reach your subscribers and even if they are deleted or about to be deleted, they require some attention for that to happen.

In the moment of deleting your emails the customer could see something eye catching and end up converting. So it’s a win, win.

Another reason why email marketing is quite effective is it can be really inexpensive. A study from 2014 shows for every dollar that was spent on email marketing the average ROI was $44.25.

Email marketing tools such as Mailchimp, are often low cost (with many including free plans for small lists), which means only helps this ROI.

How to Measure ROI For Email Marketing

Working out your email marketing ROI is actually quite simple, you just need to divide the revenue by the costs and then multiply the answer by 100.

Here’s the formula:


But wait, there’s more. When measuring your email campaigns there are a few extra metrics you’ll want to understand in order to provide context.

Click Through Rate

Click through rate is really just the percentage of people who saw or opened your email and clicked on a link within the email.

This gives you a rough idea of how engaging your emails, which is why it’s one of the most useful metrics when it comes to A/B Testing with emails.

How to work out CTR: total clicks ÷ delivered emails * 100 = clickthrough rate%

Conversions Rate

Similar to the click through rate, the conversion rate is a percentage of users who have clicked through some links on your emails, however the conversion rate goes further.

The definition of conversion rate is the number of customers who view and click onto your email and then complete a predefined valued action, like a purchase or completing a lead generation form.

Because of the fact that conversion rate is directly linked to your conversions and completions it’s also one of the best email marketing metrics that can help you see how close you are to hitting your goals.

Here’s how you can work out your conversion rate:

(Number of conversions ÷ Number of total emails delivered) * 100

Email Marketing Tips

So you’ve come this far or just skipped to the tips, either way here are some things you could to to try and improve your email marketing.


The most important thing about your email marketing is, well, it’s the emails right?

You need to be able to create some enticing well written emails that tug on your customers attention.

So how do we do that?

The main thing is to stick to short and simple questions, and there are a few other things we can do to make our emails more engaging and less spammy for customers.

The first thing you’ll want to do is be more personal. Talk to your list as though you’re talking to one person.

This will make customers feel like there’s actually someone behind the screen sending them a genuine email.

And whilst we’re on the topic of seeming spammy, don’t send emails unless they are valuable and necessary! It takes just one email for a customer to completely block your brand from their brain’s trustworthy filter.

Talking about trust, it’s important that your business is trustworthy.  Customers want to know that the advice you’re dishing out is legitimate and then by shopping with you there data is safe.

Give them some real value in return for their email address, don’t just email your list when you need something. An exclusive coupon or the advice that you’d only share with your closest friends (or highest spending customer) can be extremely valuable.

Be empathetic and show them the human side of your business, where appropriate. Customers tend to respond better when they know there’s actual humans working behind it.

Most importantly, make sure you let customers know exactly what to expect when they sign up for your email list. Whether it be promotions or educational content, if they know what they’re in for, they’ll be less likely to unsubscribe.

Remember customers prefer transparency.

Subject Lines

One of the most important things when writing an email is the subject line.

The subject line can be what breaks or makes your email campaign.

If you write a killer subject line your email will have a much higher chance of being read. On the other hand if your subject line flops no one will read it.

One of the things you’ll want to try and use is actionable language, when you’re writing your subject lines include words that let the readers know what the email is about and what they can do with the email.

But remember when you’re writing subject lines you don’t need to weave these words around lots of verbs, instead be creative with the extra space and write something enticing.

Phrases such as don’t miss out or don’t miss your chance, give a great sense of urgency that can get users to open an email for fear of missing out!

Remember your first goal is to get people to read your email.

We all know what it’s like to have inboxes stacked to the rim with boring emails that we’ll probably never read.

Because of how many emails are sent and received it’s quite easy for your emails to get lost or overlooked. Gmail makes things worse with its segmentation.

When it comes to writing enticing emails you’re going to want to promise something good.

Letting your customers know exactly what you’re offering them and how it will help them will make them sit on the edge of their seat.

Make sure you’re also using power words, these are words that tug on senses and emotions. These will help your email to stand out in the crowd of other emails.

Always try to experiment to see what works well and what doesn’t work well. You’ll most likely be surprised by what works for you. Sometimes you need to disregard metrics like average subject line length.

Instead of relying on “average readers” focus on building a relationship with your email list so they’ll open your email based on recognition.

How to sell in your emails

Emails are usually sent out by businesses to keep their customers updated. But of course that’s not the only reason.

Emails are great marketing platform for selling products. Here’s some tips on how to do it successfully:

Remember when you’re trying to sell to your readers that you need to work towards your goals, keep your readers hooked with interesting stories that will eventually tie back to your sales message.

You can even add a sense of urgency by adding a deadline to stop customers for forgetting or coming back to your website later.


Another important aspect when it comes to email marketing is your email design, I mean sure copy and subject lines are important, but design can have a huge impact.

When opening an email, the visual look of it will be the first thing a reader notices, so it’s key to get it right.

You don’t really need to be an expert in design to be able to design some amazing looking emails though.

Something as simple as having your logo in the same place in every email can go a long way, whether this be the top left, the top right or at the bottom of your email.

Keeping your logo in one place gives a sense of professionalism and instantly reminds the user who it’s from.

Speaking of corporate image the colours used in your emails should be used sparingly and you should really only use colours that are associated with your business.

Sometimes less is more and in emails less colour usually looks cleaner. Of course adding a splash of colour that isn’t part of the businesses brand can be used well when it comes to grabbing the attention of the reader to certain areas of the email, like offers, promotions or CTA but don’t go overboard.

Grabbing attention is important, but when it comes to design you want to make sure you don’t go overboard with text, sometimes readers will get put off by a large amount of text; for some audiences keep your emails, simple, straightforward and easy to digest.

Remember you can always say more on your website after your readers click through.

That said for certain niches, long form emails are becoming more popular so make sure you research your audience and test, test, test!


Although email marketing may not seem like it, it’s one of the marketing channels that offers the highest ROI.

Of course email marketing can have a bad reputation when done badly, but in recent years spam filters have stopped people from seeing it that way.

When used correctly emails can be your strongest marketing asset, so be sure to use our calculator to keep on top of your ROI so you know how to improve it.