How Much Does Email Marketing Cost?

How much does email marketing cost and what are the factors in determining the price of a campaign? Responding to that question is similar to answering, “How much does a house cost?” The answer depends on a number of factors. These key factors drive the cost of implementing an effective email campaign.

Email-Campaign Costs — A Smart & Profitable Marketing Investment

Before talking about the factors that drive the costs of email marketing, let’s take a look at why you should invest in the email-marketing channel and how much you should invest. When it comes to return on investment (ROI), email marketing consistently outperforms other marketing channels. In fact, the average return is $44.25 for every dollar spent on email marketing. Yet, many people make the mistake of simply looking at the cost of creating and managing email-marketing campaigns as if it were an expense.

Spending money on marketing is an investment. The difference between an investment and a cost is that you get a return from an investment. And there’s no reason to do marketing if you don’t get a return. That’s why at FulcrumTech, we focus on ROI when developing and implementing email campaigns.

How Much Should You Invest in an Email-Marketing Campaign?

Start by determining the potential return. Consider the following example:

  • A company sells widgets for $50 each.
  • The gross margin is 50%, so the company yields $25 for every widget sold.
  • On average, over a year, a new customer buys five widgets, which yields $125 per new customer.

To determine this company’s break even investment, let’s start by having them spend $5,000 per month on improving their current email-marketing efforts. In this case, the company would need to sell an incremental 40 widgets. And, if their list consists of about 50,000 people, that means they would need only a 0.08% improvement to break even!

So what’s it worth to your company to improve your email marketing just a little bit?

Key Factors That Impact Email-Marketing Campaign Costs

For some reason, many people seem to think that email marketing doesn’t require the same level of costs as other types of marketing. To do it right, however, a significant amount of planning goes into developing and implementing an effective email-campaign strategy. Plus, once an email campaign is implemented, you have to monitor, manage, and optimize its performance to continually achieve great campaign results.

From the initial email assessment and campaign planning, to building out the copy and design for each email, to the ongoing management and optimization, the following factors play an important role in determining how much implementing your email campaigns will cost:

  • The number of businesses or interrelated businesses involved in the planning phase. For example, is the email-marketing campaign for one product, one product line, or for an entire division of a company that includes multiple product lines?
  • The scope of your email-marketing campaigns, including the number and types of emails needed. Does the email-marketing campaign involve a single monthly newsletter, a regularly timed promotional email campaign announcing weekly sales and specials, a series of automated abandoned-cart emails, or an email autoresponder series involving multiple steps and containing complex logic? The more complex the situation, the more time required for analysis, strategy development, design, implementation, and ongoing management.
  • The quality of your current email list. The higher the quality of a list, the less work is needed to implement an email campaign. But if the list is not permission based and has a high number of inactive subscribers, time and effort will be needed to build a quality list. This would likely require search engine optimization (SEO), pay-per-click advertising, and other list-building efforts.
  • State of your supporting marketing efforts. For any email-marketing campaign to succeed, a strong website foundation is essential. Without that, conversion will be a challenge. So, if your website, social media, and other supporting tools are not strong, some effort will be required to determine how to best ensure that they’re where they need to be to support your email-marketing efforts.
  • Level of complexity of the email concept and final design. Are you leveraging a pre-existing email template or looking at a purely custom design? Other variables impacting cost of building out the copy and design for each email include the number of rounds of review for wireframes and designs, the amount of copywriting required, the extent to which your communications are monitored by regulatory bodies (e.g., healthcare, pharmaceutical, financial/banking), and the technical sophistication of the product and market. The complexity of the final design also impacts the time required for coding the emails and quality assurance.
  • Your organization’s current technology. Will your technology support your email-marketing efforts now and into the future? To answer that question, you have to look at everything from getting your emails out the door to getting them into subscribers’ inboxes to creating the reports necessary for you to manage your business. If your current technology won’t provide adequate support for your email-marketing campaigns, then FulcrumTech can help you identify the most appropriate email service provider (ESP) and software-based services and solutions.
  • Level of complexity of the reporting and optimization testing required. The types of emails in a campaign (e.g., single emails versus emails that are part of an automated series), the volume of email managed, the number and types of variations in subject lines, headlines, design elements, calls to action, etc., that are being tested all have an impact on the cost of the ongoing management and optimization of email campaigns.

Keep in mind that there are also additional costs for distributing email campaigns, which typically depend on the volume of email you send and the ESP you use.

If you’re looking to design and implement an email-marketing campaign that delivers a high ROI, FulcrumTech is the email-marketing agency that can do it. Email-campaign strategy is one area in which we excel. If the email-campaign strategy isn’t right, whatever you implement won’t work. Our founder, Mitch Lapides, has built businesses with revenues in the tens and hundreds of million dollars and achieved double-digit growth. That’s the kind of capability we bring to the table. Email us or give us a call at 215-489-9336 and get started today!


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