How Much Does Email Marketing Cost?

What is the cost of email marketing, 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 a successful email campaign.

Email-Campaign Costs—A Smart and Profitable Marketing Investment

Before talking about the factors that drive the costs of an email marketing campaign or hiring agencies, 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. 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.

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 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 Cost of Email-Marketing Campaigns

For some reason, many people seem to think that email marketing is low cost 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.

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 cost of email marketing:

  • The number of businesses or interrelated businesses involved in the planning phase. For example, 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.
  • 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. 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.
  • 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.
  • 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 cost to create emails 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 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.
  • Level of complexity of the campaign performance reporting 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.

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

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!


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