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Email Marketing Metrics: What’s the Profitability of an Email Marketing Campaign?

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An email marketing campaign is either profitable (making money) or not (losing money).

To Calculate

Take the total number of revenue generated from the specific email marketing campaign and subtract the cost of the campaign and the cost of the goods sold, then divide the whole mess by the total number of emails delivered.

(revenue – the cost of email – the cost of goods)/# of emails delivered

Just to clarify, the cost of the campaign (and cost of goods sold) may include email marketing software, equipment, staff wages and/or materials.

What does the rate mean?

First, everything you do has a cost associated!

If you're in the black, then keep on truckin'. If you're in the red, then regroup and analyze what got out of hand.

Several different factors may be at play here:

  • You simply didn't sell enough product.
  • The cost of your email marketing campaign is way out of hand.
  • Your cost of making the products is out of control.

Whatever it is, this is a great exercise to see if you're actually making some dough on your campaign or not.

Applications

  • What type of email campaign is more profitable? Which loses money?
  • Is an email marketing campaign more profitable than an SMS, fax or direct marketing?
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