Updated February 2018
What is the cost of email marketing, and what are the factors in determining email-marketing services prices? How much does it cost to send an email? Responding to these questions 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 successful email campaigns.
Email-Marketing Campaign Costs—A Smart and Profitable Marketing Investment
Before talking about the factors that drive the email-marketing costs per email or email-marketing agency pricing, 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 $44.00 for every dollar spent on email marketing. Still, 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.
Email-Marketing Cost—How Much Should You Invest in an Email-Marketing Campaign?
As you set out to determine how much to spend on an email advertising 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 it spend $5,000 per month on improving its current email-marketing campaign efforts. In this case, the company would need to sell an incremental 40 widgets. And if its list consists of about 50,000 people, that means that the company would need only a 0.08% improvement to break even!
So, what’s it worth to your company to improve your email-marketing platform just a little bit?
Key Factors That Impact the Email-Marketing Services Price
For some reason, many people seem to think that email campaign cost is low compared to other types of marketing pricing. To do it right, however, a significant amount of planning goes into developing, implementing, and testing effective email-campaign strategy and solutions. Plus, once an email campaign is implemented, marketers must monitor, manage, and optimize its performance to continually achieve great campaign results.
Email-Marketing Services Pricing—How Much Does an Email-Marketing Campaign Cost?
When it comes to determining how much to charge for email marketing, how do email-marketing agencies do it? From the initial email assessment and campaign plan to building out the email content and design, to sending targeted messages, to ongoing management and optimization, the following factors play an important role in determining the average cost of an email-marketing campaign:
- The number of businesses or interrelated businesses involved in the planning phase. For example, to determine email-marketing prices you must take into account whether the email-marketing campaign is for one product; one product line; or for an entire division of a company, including multiple product lines.
- The scope of your email-marketing campaigns, including the number and types of marketing emails needed. Does the email-marketing campaign involve monthly email newsletters, 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, reporting, and ongoing management, which results in a higher email-marketing cost per email.
- The quality of your current email list and subscribers. The higher the quality of a list, the less work is needed to implement an email campaign, and the lower average cost per email sent. But if the list is not permission based and has a high volume 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, resulting in higher email-advertising costs.
- The 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 aren’t strong and don’t have a strong reach, 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 and lower your email campaign costs.
- Level of complexity of the email concept and final email template design. Are you leveraging preexisting email templates and messages or looking at a purely custom design? Other variables impacting the email template design cost 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., health care, pharmaceutical, financial/banking), and the technical sophistication of the product and market. The complexity of the final design also impacts email campaign pricing because of the time required for coding the emails and conducting quality assurance.
- Your organization’s current technology, marketing software, and knowledge base. Will your technology support your email-marketing efforts now and in the future? To answer that question, you have to look at everything from getting your emails out of the door to getting them into subscribers’ inboxes, to creating the data reports necessary for you to manage your large or small business. If your current technology won’t provide adequate support, tools, split testing, email automation, and anti-spam solutions for your email-marketing campaigns, then FulcrumTech can help you identify the most appropriate email service provider (ESP) and software-based services and marketing solutions, helping to make your email marketing cost effective.
- Level of complexity of the campaign performance reporting, analytics, and optimization email testing required. The types of emails in a campaign (e.g., single emails versus emails that are part of a marketing automation series), the volume of email managed, the number and types of variations in subject lines, headlines, custom design elements, dynamic content, sign-up forms, and the calls to action that are being tested all have an impact on the cost of the ongoing management and optimization of email campaigns.
Cost of Marketing Campaign Also Depends on Email Volume and the ESP Used
Keep in mind that there are also additional email costs for distributing email campaigns, which typically depend on the volume of email that you send and the ESP that you use.
There are a multitude of ESPs that offer a wide range of services and many pricing options. Which is the best ESP for your business? Check out the following FulcrumTech article that provides an overview of what you should take into account when determining which ESP best meets your needs and stays within your budget:
In addition, email deliverability is a primary consideration when comparing and choosing ESPs. Poor email deliverability is something you don’t want to opt for in order to have a low cost email marketing program. Increased deliverability equates to increased revenue and a higher ROI. And even a small improvement in deliverability can make a huge positive impact on your bottom line.
Although a majority of deliverability problems originate from email-marketing list issues, the right ESP can help you solve any deliverability problems and provide you with a well-monitored IP address. For example, when choosing an ESP, be sure to find out:
- What is the ESP’s reputation for deliverability?
- How big is the ESP’s deliverability team?
- Does the ESP use a shared versus dedicated IP address?
- In the case of a shared IP address, what’s the reputation of that IP address?
- Is there real-time monitoring and alerts for domain blocking and blacklisting?
- What is the ESP’s support and cost for such types of authentication as Sender Policy Framework (SPF), DomainKeys, and DomainKeys Identified Mail (DKIM)?
It’s essential that your emails are getting to your subscribers’ inboxes. If your emails end up getting blocked by spam filters or ISPs, you’re losing clicks and revenue, as well as hurting your company’s reputation.
Click on the following FulcrumTech article links for more information about email deliverability:
- Email Deliverability—How to Identify a Problem You May Not Know You Have
- Email Deliverability—What Really Determines Inbox Engagement?
If you’re looking to design and implement an effective email-marketing campaign that delivers a high ROI and results, FulcrumTech is the email-marketing agency that can do it. Email-campaign marketing strategy is one area in which our dedicated account management team excels. If the email-campaign marketing strategy isn’t right, whatever you implement won’t work. Our founder and expert, Mitch Lapides, has built businesses with revenues in the tens and hundreds of millions of 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 with our email-marketing agency today!