How should marketers test ROI on email campaigns?

  • Posted by: Aabid Tabrez
  • Category: Marketing

Sometimes a marketer might send a new B2B email campaign to a small sample of B2B contacts to test the ROI of that demographic. This is bound to fail.  To try and ascertain ROI on a sample, which costs less than the potential revenue of a single sale, never succeeds. Give your B2B email campaigns a sporting chance otherwise you are missing out on the most proven methods of achieving sales revenue.

The typical ROI on email campaigns is $42 for every $1 spent, according to the DMA, but this is over the medium term and cannot possibly be achieved using the small samples, in the hundreds, that some inexperienced marketers use to test their campaigns.

If, for instance, an events organisation sells a delegate ticket at say $400 and expects say a further $100 from in-event sales and cross-selling then the profit from a new delegate could be $500, assuming that the costs of the attendance to the events organisation are fixed.

ROI = (revenue – costs)/costs.

If the cost of acquisition of a highly targeted and validated B2B contact email address is say $0.70 then ROI begins at only one sale per 714 email addresses. 714 email addresses, at $0.70 costs $499.80, just under the $500 profit from a new delegate sale. At 2 sales per 714 email addresses then the ROI is ($1000-$499.80)/$ 499.80 = 1 which means you have achieved twice the profit of the cost of the B2B contact data.

Further increases in revenue from the email campaign come from:

  • Sales made that are linked to the email campaign such as peer-to-peer recommendations and social proof
  • Repeat business and attendance in future events from the same delegate and colleagues
  • Enhanced sponsorship and exhibitor revenue
  • Raised brand awareness

Good marketers typically test email campaigns with a minimum of 10X the likely revenue from a delegate ticket sale. In the above case that would be a minimum of 7140 email addresses at a cost of $4998.

The B2B contact data from ESG is highly targeted to exacting client specifications and validated using our triple proprietary AI & manual processes. Test our data for accuracy and validity. You will, as all our clients are, be astonished at the quality. Now test your B2B email content and campaigns but give them a sporting chance.

 

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Author: Aabid Tabrez

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2 Comments

  • Francois

    Makes a lot of sense. We do often look for unrealistic results without applying sufficient time and consideration to the indirect benefits of direct emailing.

  • Benjamin

    At Reed, we have availed ourselves of the B2B contact data from ESG and I am happy to say that we have been surprised every time by the accuracy of the contact data and the business we have generated from it. In our experience, it is very important to use a large enough set of data and allow enough time for results to develop.