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How to properly calculate email marketing ROI (it's not just revenue/cost)

conversion_cathyCRO Expert

Email marketing reportedly has a 36:1 ROI. But how you calculate this matters enormously.

The naive formula

Revenue attributed to email / ESP cost = ROI. This dramatically overstates the return because it ignores all the other costs.

The real formula

(Revenue attributed to email - Total email program cost) / Total email program cost = ROI

Total costs include

  • ESP subscription
  • Team salary (proportional to email work)
  • Design and development time
  • Tools (testing, validation, analytics)
  • Content creation

Attribution matters too

Last-click attribution over-credits email. Multi-touch attribution is more accurate but harder to implement. At minimum, use a reasonable attribution window (7 days for most businesses).

Even with realistic calculations, email ROI is typically 10-15:1, which is still excellent compared to other channels.

#roi#analytics#measurement
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2 Comments

b2b_brian

Thank you for calling out the naive formula. Too many blog posts claim 36:1 ROI without accounting for the real costs of running an email program.

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metrics_mikeData Analyst

Multi-touch attribution is the holy grail. We use a simple model: 40% credit to first touch, 40% to last touch, 20% distributed across middle touches.

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