How to Measure ROI from Email Campaigns

Email marketing is renowned for its exceptional return on investment (ROI). In fact, studies show that businesses earn roughly $36–$40 for every $1 spent on email, on average.

This makes email one of the highest-ROI channels in digital marketing, consistently outperforming many other marketing tactics. Whether you are a small business owner, marketing professional, or e-commerce brand, understanding how to measure ROI from your email campaigns is crucial.

It enables you to justify your marketing spend and optimize future campaigns using hard data, rather than guesswork. In this comprehensive guide, we’ll explain what email ROI means, how to calculate it, which metrics and tools to use, and best practices to maximize ROI – across all industries and business sizes.

What is Email Marketing ROI?

Email marketing ROI (Return on Investment) refers to the net profit generated from your email campaigns compared to the costs invested. In simple terms, ROI tells you how much money your email marketing is earning for every dollar spent.

A high ROI means your email campaigns deliver a lot of “bang for your buck,” indicating cost-effective success. By contrast, a low or negative ROI signals that the campaign costs may be outweighing the returns, highlighting an issue to address.

To put it formulaically, ROI is calculated as:

Email Marketing ROI = ((Revenue from email – Cost of email) ÷ Cost) × 100%. For example, if you spent $1,000 on an email campaign and it generated $5,000 in revenue, the ROI would be 400% ([($5,000–$1,000)/$1,000]×100). This means you earned $5 for every $1 spent, or a 5:1 ROI ratio.

It’s important to note that some marketers calculate ROI using total revenue, but using net profit (revenue minus cost of goods and other direct expenses) gives a more accurate picture.

In other words, ROI should ideally reflect actual profit per dollar spent, not just gross revenue, so you truly understand the bottom-line impact of your email campaigns.

Why Measuring ROI Matters

Measuring email campaign ROI is vital because it directly quantifies your campaign’s success or failure. Unlike vanity metrics such as just opens or clicks, ROI ties your email efforts to dollars-and-cents outcomes. Here are a few key reasons ROI measurement is important:

Performance Benchmarking: ROI provides a standardized metric to compare different campaigns, audience segments, or channels. This helps you identify which email strategies yield the best returns and where to allocate your budget for maximum impact.
Budget Justification: Marketing teams (and small business owners) often need to justify expenditures. A solid ROI figure shows stakeholders that email marketing is delivering value, making it easier to secure budget or client buy-in.
Optimization and Decision-Making: Tracking ROI highlights what’s working and what’s not, informing data-driven decisions. Without measuring ROI, you’d be “flying blind” – but with it, you can spot trends and continuously improve campaigns for higher profitability.
Focus on Business Goals: Ultimately, email marketing shouldn’t exist in a vacuum. It should drive broader business goals like revenue growth, customer acquisition, and retention. ROI bridges the gap between email metrics and business results, ensuring your email strategy aligns with your company’s objectives.

In summary, ROI is one of the most telling indicators of email marketing effectiveness, so it should be a cornerstone of your strategy. It turns raw data into meaningful insight about how email contributes to your bottom line.

Setting Clear Objectives and KPIs

Before diving into calculations, it’s important to set clear objectives and key performance indicators (KPIs) for your email campaigns. Every campaign should have a defined purpose – and that goal will influence how you measure ROI.

For example, an abandoned cart email aims to drive direct sales, while a content newsletter in a B2B context might aim to nurture leads or boost engagement. Be specific about what you want to achieve (sales revenue, lead sign-ups, etc.), so you know what “return” to measure.

Establish KPIs that align with your goal: if revenue is the goal, track conversions and sales value; if lead generation, track form submissions or demo requests; if engagement, track clicks or forwards.

Setting measurable, relevant goals keeps your campaigns focused and provides benchmarks for success. At the same time, remain flexible – you can adjust your targets as you learn what resonates with your audience and as conditions change.

Timing is another factor. Email campaigns often have a short lifecycle – for instance, around 99% of engagement from an email send happens within the first 72 hours. This means you can evaluate performance shortly after sending.

However, if you’re running a series of emails (say, a drip sequence over a week or a holiday promotion spanning multiple emails), it’s wise to wait until the final email is sent and the campaign period is over to calculate ROI.

This ensures you capture the full impact. By defining objectives upfront and monitoring the right KPIs throughout the campaign, you set yourself up to measure ROI accurately once the campaign concludes.

How to Calculate ROI for an Email Campaign

Calculating email campaign ROI involves a straightforward formula. First, add up the total value generated by the campaign, then subtract the total cost of the campaign, and finally divide by the campaign cost. In formula form, it is:

ROI = (Total Return – Total Cost) ÷ Total Cost × 100%.

“Total Return” means the revenue or profit attributable to the email campaign, and “Total Cost” means all the expenses of running that campaign. Multiply by 100 to express it as a percentage, or omit ×100 for a ratio (e.g. 5:1). Let’s break down the components:

Revenue (Return): This could be direct sales revenue generated from the email (for example, purchases made by recipients who clicked your email).

If your campaign goal is lead generation or something not immediately tied to revenue, you might assign a monetary value to those leads (for instance, based on lifetime value or conversion rates).

Ideally, use net revenue (profit) by subtracting any direct costs of goods/services. For example, if an e-commerce email generated $5,000 in sales but the cost of the products sold was $4,000, the net profit (return) is $1,000.
Cost: Include all costs of creating and sending the campaign. This includes your email marketing platform fees, any advertising or list rental costs, money spent on design or copywriting, and even a proportion of staff time if significant.

If offering a discount or incentive, you might factor that in as a cost as well. Be comprehensive – capturing true costs will ensure your ROI figure is accurate.

Now plug these into the formula. For example, imagine you ran a promotional email to 10,000 subscribers that resulted in $8,000 of new sales.

Your costs included $500 for your email software (pro-rated), $200 worth of design/content creation, and roughly $300 of staff time, totaling $1,000 in costs. The ROI would be (($8,000 – $1,000) ÷ $1,000) × 100% = 700%. In other words, a 7:1 ROI – you earned $7 in net profit for every $1 spent.

Keep in mind that using net profit in the calculation is more truthful. Some marketers might simply do $8,000÷$1,000 = 800% in the above example, but that ignores $700 of cost of goods (if the $8,000 in sales isn’t pure profit) and inflates the ROI.

Always clarify what your “return” represents (revenue vs. profit) and be consistent. By sticking to a solid calculation method, you can reliably compare ROI across campaigns.

Tracking Revenue from Email Campaigns

A critical part of measuring ROI is accurately tracking the revenue that your emails generate. How can you tell which sales or conversions came from a particular email campaign? Fortunately, there are reliable methods and tools for this:

E-commerce Integration: If you run an online store, integrate your email platform with your e-commerce or CRM system. Many email marketing services (like Mailchimp, Klaviyo, HubSpot, etc.) can connect directly to platforms such as Shopify, WooCommerce, or your CRM.

This allows them to record when a subscriber from a campaign makes a purchase. For instance, Mailchimp’s reporting can show how much revenue each email campaign earned by pulling in order data. Klaviyo, tailored for e-commerce, automatically tracks conversions and revenue from emails once integrated with your store.

Similarly, HubSpot’s campaign analytics can attribute deals and revenue to specific email campaigns when you use its CRM. These integrations give you one-click ROI tracking in many cases.
Web Analytics (UTM Tracking): Another approach is to use Google Analytics (GA) or similar analytics tools. You can tag your email links with UTM parameters (source, campaign name, etc.) and then monitor conversions on your website attributed to that campaign.

Mailchimp, for example, allows easy GA tagging; and if configured, you can see email-driven revenue in GA reports.

This method is useful if your email platform doesn’t natively track sales, or to capture cross-channel behavior (e.g., someone clicks email, then later returns via direct traffic to purchase – advanced GA attribution can catch that).

The key is to ensure your conversion goals or e-commerce tracking are set up in Google Analytics, and that each email campaign has unique identifiers. Then, when sales occur, you can filter by those identifiers to sum up revenue.
Promo Codes or Coupons: If integration or analytics aren’t available (for example, a small business using basic tools), you can still estimate revenue by using campaign-specific promo codes or referral links.

For instance, include a unique discount code in your email; the redeemed codes in sales will show how much revenue that email drove.

This is especially handy for offline conversions too (e.g. an email that encourages in-store purchases could include a code to present in store).
CRM and Attribution for Leads: In B2B or longer sales cycle environments, an email might generate a lead that turns into revenue weeks or months later.

Using a CRM like HubSpot, you can track that a lead came from an email campaign and later closed a deal worth $X. HubSpot’s campaign tool will tie contacts and deals back to campaigns so you can see total revenue influence.

In such cases, you might attribute the full deal value to the email (if the email was the primary driver) or a portion of it if you prefer multi-touch attribution.

Some companies use multi-channel attribution models (first touch, last touch, linear, etc.) to distribute credit to email and other channels – this can get complex, but it’s something larger organizations consider when measuring marketing ROI holistically.

In summary, use the tools at your disposal to capture email-driven revenue as precisely as possible. Modern email platforms make this easier by providing built-in analytics and reporting.

For example, if you’re using Mailchimp, you can simply check the campaign report for “total revenue”. If you’re using Klaviyo, you’ll see detailed metrics like placed order count and revenue per recipient in the dashboard.

And with HubSpot, you can analyze campaign performance including influenced contacts, customers, and revenue. The data is there – make sure to leverage it.

Accounting for Email Marketing Costs

To get an accurate ROI calculation, you must tally up all relevant costs of your email campaign. Email marketing is often praised for being cost-effective, but it’s not free – and underestimating costs can give a false sense of high ROI. Be sure to consider the following cost factors:

Email Platform Expenses: This includes your email service provider (ESP) or marketing automation software fees. If you pay a monthly subscription to tools like Mailchimp, Klaviyo, HubSpot, Constant Contact, etc., you should allocate a portion of that cost to the campaign.

For example, if you spend $100/month and send four campaigns a month, you might attribute $25 cost to each campaign. Some platforms also charge by email volume or contact count – include those usage costs as well.
Manpower and Agency Costs: Consider the labor involved in planning, designing, writing, and sending the emails. If you have a marketing team or you yourself spend time on it, that time has a value.

A simple way is to estimate hours spent on the campaign and multiply by an hourly rate (or use a salary proportion). Similarly, if you outsourced copywriting or design, include those fees.
Content and Creative: If you used any paid assets – for instance, stock images, freelance design work, or content writers – those are direct campaign costs. Even if you used in-house resources, the effort can be counted as part of labor (as above).
List Building or Data Costs: If the campaign involves acquiring new email addresses (perhaps via a paid lead-gen campaign or a contest giveaway), factor in those costs.

Collecting and maintaining an email list does incur costs (through lead generation campaigns, signup incentives, etc.), which indirectly affect ROI. You may amortize list acquisition cost over several campaigns, but be aware of it.
Incentives/Discounts: If your email included a promotional discount or freebie, consider the cost of that incentive. For example, a 20% off sale affects your profit margin on each sale – effectively a cost.

You don’t necessarily subtract all discounted revenue (since revenue in ROI should already be net profit ideally), but it’s worth noting in profit calculation. If an email giveaway cost you $500 in products shipped, that $500 is a marketing cost.
Other Overheads: These might include email template tools, testing tools, or any other software (perhaps a deliverability tool or analytics add-on) used specifically for email campaigns.

Even a small expense like a $10 stock photo or a $30/month SMTP service should be counted if it’s part of your campaign toolkit.

By summing up these costs, you ensure the ROI you compute is grounded in reality. It might be tempting to ignore the “soft” costs like your time, but doing so could mislead you into thinking your campaign was more profitable than it truly was.

For instance, if you ignore labor, a campaign might appear to cost only $100 (software), but in reality, you spent 10 hours of work on it – which, if valued at $50/hour, is another $500 in cost. Being thorough with costs provides a clearer ROI and helps you find ways to improve efficiency.

(Perhaps you realize that a lot of time is spent designing emails, so investing in templates could reduce cost and improve ROI in the long run.)

Key Metrics to Monitor for Email ROI

While ROI itself is an aggregate measure, it’s driven by various underlying email performance metrics. Tracking these key metrics will help you understand why your ROI is high or low and where to tweak your strategy. Here are some of the most important KPIs related to email campaign ROI:

Open Rate and Click-Through Rate (CTR): These engagement metrics tell you how effectively your email is grabbing attention and generating interest. Open rate is the percentage of delivered emails that were opened, indicating the success of your subject line and sender reputation.

CTR is the percentage of recipients who clicked a link in the email, showing how compelling your content and call-to-action were. Higher opens and clicks alone don’t guarantee revenue, but they fill the top of the funnel – you can’t get conversions without them.

If your open or click rates are low, your ROI will suffer because fewer people even reach your offer. Improvements here (through better subject lines, copy, design, or targeting) will trickle down to better conversion counts.

(Tip: Track click-to-open rate as well – the ratio of clicks to opens – to gauge content effectiveness among those who opened.)
Conversion Rate: Conversion rate is the percentage of recipients (or clickers) who completed the desired action, such as making a purchase or filling a form. This metric directly ties to revenue: it tells you how well your email content and offer are “closing the deal.”

For example, if out of 1000 emails delivered you got 50 purchases, that’s a 5% conversion rate. Often we calculate conversion rate as conversions ÷ emails delivered (or ÷ clicks for a post-click conversion rate).

Conversion rate is a key indicator of ROI because a higher conversion rate means more revenue from the same send. Tracking this helps you see if changes in copy, offer, landing page, etc., affect the bottom line.

It’s an essential metric for evaluating success – a high conversion rate typically correlates with a high ROI, assuming your average order value or lead value is sufficient.
Bounce Rate and Deliverability: Bounce rate is the percentage of emails that could not be delivered to recipients (either hard bounces for invalid addresses or soft bounces for temporary issues).

Deliverability rate (or delivery rate) measures what portion actually landed in inboxes (not spam). These metrics don’t directly measure revenue, but they underpin it – you can’t generate ROI if emails don’t reach people.

A high bounce rate or spam placement issue will drag down all other metrics. Aim to keep bounce rates low (clean your list regularly) and deliverability high (authenticate your domain, send relevant content, monitor complaints).

A good deliverability rate is typically 95% or above. Maintaining this will protect your sender reputation and ensure your emails have the chance to produce returns.
Unsubscribe and Spam Complaint Rates: The unsubscribe rate is how many people opt out per email sent (e.g., 0.2%) and spam complaints indicate how many mark your email as spam.

While an unsubscribe here or there is normal, spikes in these rates can signal that your content is not meeting subscriber expectations or that you’re emailing too often. High unsubscribe or complaint rates can hurt deliverability and shrink your list’s revenue potential over time.

If you see an unsubscribe rate beyond about 0.5%–1% on a campaign, evaluate what might have turned readers off. Keeping these rates low preserves your list for future ROI and indicates healthy engagement.
Revenue per Email (or per Recipient): This is a directly ROI-centric metric: how much revenue do you earn per email sent or per recipient? Some platforms call this RPR (Revenue Per Recipient).

For example, if a campaign generated $5,000 from 10,000 emails sent, your revenue per email is $0.50. This metric is great for comparing campaigns of different sizes on an equal footing.

It’s also useful for segment analysis – e.g., you might find that emails sent to your VIP customer segment earn $5 per recipient, while a cold segment earns $0.10, indicating where the most value lies.

Klaviyo reports this metric to help e-commerce brands assess efficiency. Over time, you want to increase revenue per subscriber/email by improving targeting and content. Rising revenue per email sent will lead to higher overall ROI.
Customer Lifetime Value (CLV): CLV measures the total revenue a customer is expected to bring over their relationship with your business. While not an email-only metric, it’s relevant if your email campaign’s goal is to retain customers or increase repeat purchases.

For instance, an email might not generate a big immediate sale, but if it re-engages a lapsed customer who then makes multiple purchases over the next year, the ROI is realized in the long term.

Some campaigns (like onboarding series, loyalty program emails, reactivation campaigns) aim to boost lifetime value. Tracking CLV of customers acquired or influenced by email can demonstrate email’s impact beyond a single campaign.

If you notice that email-acquired customers have higher (or lower) CLV than average, that insight can guide your strategy (perhaps you’ll focus emails on nurturing high-CLV segments, etc.).

While CLV is a broader metric, it contextualizes ROI in terms of long-term profitability, not just one-off sales.
Overall ROI: Finally, of course, track the ROI percentage or ratio itself for each campaign. Many email platforms will calculate this if you input costs. You can maintain a dashboard or spreadsheet of each campaign’s spend, revenue, and ROI.

This lets you benchmark which campaigns performed best and learn from them. For example, you might find your “Holiday Sale 2024” email had an ROI of 500%, whereas your “Spring Newsletter” had 150%. Digging into why (subject, audience, offer, timing) will help improve future efforts.

Also compare email ROI to other channels’ ROI if possible – chances are your email ROI will be among the highest, reinforcing why investing in email is smart. According to industry data, email marketing typically yields an average of around $42 in return for every $1 spent, far outpacing many other channels.

By tracking ROI alongside these supporting metrics, you get a full picture of your email program’s health and impact.

(Pro tip: Many of these metrics are readily available in your email platform’s reports. For instance, Mailchimp and HubSpot will show opens, clicks, unsubscribes, etc., for each send. Klaviyo provides deeper e-commerce metrics like revenue per recipient. Use these dashboards to monitor KPIs in real time.

As Mailchimp notes, “Track key email KPIs like conversion rate, ROI, customer lifetime value, and cost per acquisition to see how emails impact your business goals.” This integrated view ties campaign metrics to real business outcomes.)

Tools and Platforms for Measuring Email ROI

You don’t have to measure ROI all by yourself in a spreadsheet – today’s email marketing platforms offer robust analytics to help. Here are some tools and how they facilitate ROI tracking:

Mailchimp: A popular choice for small businesses, Mailchimp provides an intuitive reporting dashboard. It tracks metrics like opens, clicks, conversions, and even revenue from each email campaign (if you connect your online store).

In Mailchimp, you can see purchase activity tied to emails, and it will calculate conversions and total revenue attributed to the campaign. Mailchimp also features industry benchmarks in reports so you can compare your performance.

Its analytics can show you ROI-related figures (though you may need to manually input costs to get an ROI percentage). The platform emphasizes ease of use – as one guide states, “a good email marketing platform will gather and report important email metrics”, allowing you to focus on interpreting the data.
Klaviyo: Klaviyo is an email platform built with e-commerce in mind (used by many online stores). It automatically tracks sales from emails once integrated with your e-commerce platform.

Klaviyo’s dashboard will show attributed revenue, number of orders, and revenue per recipient for each campaign or automated flow. One standout feature is the ability to analyze ROI by segment and campaign type.

Klaviyo allows you to dig into which customer groups generate the highest ROI from your emails. For example, you could see that your repeat customers segment yields a 10x ROI on emails, whereas prospects yield 3x, guiding your segmentation strategy.

Klaviyo also provides an ROI calculator tool and various predictive analytics (e.g., it can compute the predicted CLV of customers in a segment, which helps in measuring longer-term ROI). Its deep integration with online store data means ROI tracking is very granular and accurate.
HubSpot: HubSpot is a CRM and marketing platform widely used in B2B and SaaS, though it also serves B2C. With HubSpot, email campaigns are often part of a larger campaign entity that tracks contacts, traffic, and revenue.

In HubSpot’s campaign analytics, you can input the campaign cost and it will show ROI in terms of influenced deals and revenue. There’s an ROI report that highlights cost vs. revenue for your campaigns.

A benefit of HubSpot is that it ties email to the sales CRM – so if an email lead converts into a deal, HubSpot’s closed-loop reporting will attribute that revenue. This is excellent for measuring ROI on lead-nurturing email sequences or webinars invites, etc.

Additionally, HubSpot’s analytics help you measure multi-channel campaigns; you can see how email alongside social ads, etc., contributed to overall ROI. For marketing professionals needing to prove the ROI of their campaigns to executives, HubSpot’s integrated reports are very handy.
Google Analytics (GA): While not an email platform, GA is a crucial tool to measure ROI, especially for independent tracking. By using GA’s Campaign tracking (UTMs), you can attribute website behavior and conversions to your email campaigns.

GA’s e-commerce reports or goal funnels will show how much revenue came from users who arrived via your email (source/medium “email”). It requires proper setup, but GA can then calculate metrics like conversion rate for email traffic, revenue per session from email, etc.

If you know your email send cost, you could combine that with GA data to manually compute ROI. GA is platform-agnostic, so it’s great for seeing the bigger picture of how email drives traffic and sales relative to other channels.
Other Platforms: There are numerous other email marketing tools – e.g. Moosend, Constant Contact, Campaign Monitor, Omnisend, Sendinblue, and many more – and most offer some form of ROI measurement.

Omnisend, for instance, has an ROI calculator and reports that show that its users average $68 ROI per $1 spent (which is nearly double the industry average). The key is to explore your platform’s analytics section.

Look for metrics like “revenue generated” or “e-commerce conversions.” If your platform integrates with your CRM or store, enable that connection to get richer data.

Many platforms also allow you to input the cost of a campaign when sending; doing so will let them display the ROI % automatically in reports or dashboards.

In summary, leverage your email marketing software to its fullest. These tools not only send emails but also track performance. By using a platform with strong analytics (and ensuring it’s properly integrated with your sales data), you can save time and gain accurate insights.

The heavy lifting of data collection is done for you. Your job then is to interpret the data and take action – for example, noticing that one campaign had lower ROI might prompt you to tweak the copy or targeting next time.

Conversely, seeing high ROI on a certain type of email (say, a welcome series) can justify investing more in that strategy.

(Note: If you’re not currently using a platform that provides good reporting, it may be worth switching or augmenting it. The ability to measure ROI easily is a game-changer. As a marketer, “knowing what’s working, what’s wasting the budget, and where increased investment will deliver the greatest return” is essential – the right tools make this possible.)

Best Practices to Maximize Email ROI

Measuring ROI is only half the battle – you also want to improve it. Higher ROI means more revenue for every dollar spent, which is the ultimate goal of any marketing effort. Here are some best practices to boost your email campaign ROI across industries:

Segment and Personalize Your Emails: One-size-fits-all emails tend to have lower engagement and conversion. By segmenting your audience (e.g., by demographics, purchase history, engagement level) and sending targeted, relevant messages, you can dramatically improve results.

Personalized emails (with content or offers tailored to the recipient) are proven to raise ROI significantly. In fact, businesses that leverage dynamic content and personalization see an average ROI of 4300%, versus only 1200% for those that don’t personalize.

Even simple personalization – like using the recipient’s name and recommending products based on past purchases – can build trust and drive more sales. Segmentation examples include VIP customers, new subscribers, lapsed customers, industry-specific groups, etc.

Each segment might get different content that resonates best, leading to higher conversion rates. The effort in segmenting lists and creating personalized content pays off in better ROI.
Leverage Automation and Triggered Campaigns: Not all emails are manual one-off blasts. Automated emails (triggered by user actions or timed sequences) often have much higher engagement and return.

For example, welcome email series, abandoned cart reminders, re-engagement campaigns, birthday offers, etc., target subscribers at key moments.

According to research, automated email workflows generate up to 30× higher returns compared to generic one-off newsletters. A platform like Klaviyo reported that the average return per recipient for broadcast campaigns was $0.11, while automated flows earned $1.94 per recipient (and even $3.65 for abandoned cart flows).

This huge difference means if you haven’t set up automation, you’re leaving money on the table. Identify opportunities in your customer journey to add automated emails – for instance, a series to nurture new leads, post-purchase follow-ups asking for reviews or cross-selling, win-back emails to those who haven’t purchased in a while, etc.

These tend to be timely and relevant, yielding higher conversion rates and ROI. Automation also improves cost efficiency (set it up once, it runs hands-free), which further boosts ROI by reducing manual effort.
Optimize Email Content and Design: Great content drives action. To maximize ROI, ensure your emails are well-designed, mobile-friendly, and persuasive. Craft compelling subject lines to boost open rates – an unopened email can’t convert.

Use concise, benefit-focused copy that speaks to your audience’s needs, and include a clear call-to-action (CTA) that stands out visually. Design plays a role: a clean layout, easy-to-read text, and an eye-catching CTA button can guide readers toward the conversion.

Also, remember that a large portion of your audience will read emails on their phones – roughly 41.9% of emails are opened on mobile devices. So use a responsive design that looks good on small screens, with legible fonts and buttons that are easy to tap.

If the user experience is smooth, they are more likely to follow through with the desired action, improving your conversion rate and ROI. Every extra hurdle (like tiny text or a broken layout on mobile) can hurt your results.

Test your emails on multiple devices and email clients. An optimized design builds credibility and keeps readers focused on your message, which ultimately leads to better ROI.
A/B Test and Continuously Improve: A/B testing is one of the most powerful tools to boost email ROI over time. By experimenting with different elements (subject lines, email copy, images, CTAs, send times, etc.), you can identify what resonates best with your audience.

Companies that regularly A/B test their emails see dramatically higher returns – one study found that those who often A/B test report an average ROI of 4200%, versus 2300% for those that never test.

That’s an 83% increase in ROI attributed to testing and optimization! The insight here is that small tweaks can yield significantly better performance.

For example, you might discover that a certain subject line style boosts open rates by 10%, or that one offer generates double the conversions of another. Over time, these improvements accumulate.

Make it a habit to test something in each campaign – even if minor – and apply the learnings to future emails. Just be sure to test in a scientific way (split your list randomly, change one variable at a time) so you can trust the results.

By iterating your way to higher engagement and conversion, you’ll naturally increase ROI. Remember, what works today may fatigue tomorrow, so continuous testing keeps your strategy fresh and effective.
Ensure Deliverability and List Hygiene: Earlier we noted how deliverability issues can hamper ROI. To maximize returns, proactively manage your sender reputation and email list quality.

This means using proper email authentication (SPF, DKIM, DMARC) so ISPs trust your emails, keeping an eye on spam trigger words or problematic content, and using a spam checker tool if available to catch issues before sending.

Also, clean your list regularly – remove or suppress addresses that consistently bounce or never engage. Many marketers implement a sunset policy (e.g. if someone hasn’t opened or clicked in 6-12 months, send a re-engagement email, and if they still don’t engage, stop emailing them).

This practice keeps your list focused on interested subscribers, improving open rates and reducing spam complaints. The result is better deliverability, which means more of your emails reach inboxes to have a chance at generating revenue.

According to research, even testing your emails for spam filter issues can raise ROI by 39%, and ensuring they render well across clients can add another 18% uplift. These are substantial gains from something as seemingly technical as deliverability.

Think of it this way: an email that lands in spam is wasted cost with zero return, so hitting the inbox consistently is key to ROI.
Optimize Send Frequency and Timing: How often you email and when you send can impact ROI. If you send too often, you risk fatigue and higher unsubscribes; too infrequently, and you miss opportunities or are forgotten.

Finding the optimal frequency keeps your audience engaged without burning them out. For instance, one study found the “sweet spot” for many businesses was sending 9–16 emails per month, which yielded an average ROI of about 46:1 (4600%) – higher than both lower-frequency senders and those blasting more than 16 times a month.

Of course, the right frequency varies by audience and content type, but monitor your engagement and unsubscribe rates to fine-tune this. Timing matters as well – sending when subscribers are most likely to open (consider time zones, and test different days or times).

While there is no universal perfect time, optimizing timing can lift engagement a bit, contributing to higher conversion. Some brands find, for example, that early weekday mornings work, others swear by mid-day sends.

Use your data to pick a timing that maximizes visibility in the inbox. Engaging content at the right time and cadence will drive better overall results.
Focus on Customer Value and Experience: In the long run, the best way to improve ROI is to deliver value to your subscribers. If your emails consistently help, inform, or delight your audience (rather than just pushing sales), you’ll build trust and a loyal following that converts more readily.

That means curating content that addresses their needs, personalizing recommendations, and even sending the occasional no-strings-attached useful email (like a how-to guide or industry insight).

Engaged subscribers have higher lifetime value and responsiveness. Also, ensure that the post-click experience is optimized: your email might get the click (conversion start), but if the landing page or checkout is poor, you’ll lose the sale.

Align your email content with a seamless website experience to convert clicks into revenue. By taking a subscriber-centric approach – treating your emails as part of a relationship-building process – you’ll see improved metrics across the board, from open rates to conversions, which all roll up into a better ROI.

Remember, an email campaign isn’t just about one sale; it’s about nurturing a customer’s journey. Satisfied subscribers will not only buy (improving ROI now) but also stay subscribed, giving you the opportunity to earn more from that relationship over time.

Implementing these best practices can significantly elevate your email marketing ROI. Start with one or two changes at a time (for example, set up an abandoned cart automation, or segment your next shipment by past purchase vs. new leads) and measure the impact.

Over time, incremental improvements in each area – targeting, content, sending strategy, and deliverability – will compound into a much stronger ROI for your email program.

Finally, keep an eye on industry benchmarks to understand what’s achievable and where you stand. Many reports publish average email ROIs by industry.

For instance, one study noted that nearly 1 in 5 companies achieve an email ROI of 70:1 or higher ($70+ for every $1 spent), and certain industries like ecommerce, retail, and consumer goods often see above-average ROI (upwards of 45:1).

Even within industries, specific campaign types can excel – e.g., in the automotive sector, automated emails generate far more revenue per recipient (over $5.47 per email) than standard bulk emails (around $0.16 per email).

The figure below illustrates how automated emails dramatically boost revenue per recipient in various industries, underscoring the value of targeted automation in maximizing ROI:

Illustration: Average revenue per email recipient by industry and email type (automated flows vs. standard campaigns). Automated emails (dark bars) consistently drive higher revenue per recipient across industries like automotive, tech, retail, etc., compared to regular one-off campaigns (light bars).

This translates into higher ROI for automated campaigns, as they generate more return from each email sent. By learning from such data and continuously refining your approach, you can strive for best-in-class ROI outcomes.

Frequently Asked Questions (FAQs)

Q1: What is ROI in email marketing, and why is it important?

A1: ROI in email marketing stands for Return on Investment and measures how much profit you earn from your email campaigns for each unit of cost. It’s calculated by dividing the net revenue gained by the campaign’s cost.

For example, if you spend $500 on an email campaign and it generates $2,000 in net profit, the ROI is 300% (a 4:1 return). ROI is important because it directly shows the effectiveness and financial impact of your campaigns.

A high ROI means your email marketing is cost-efficient and drives substantial results, whereas a low ROI signals that something may be amiss (either high costs or low revenue, or both). Focusing on ROI helps you justify your email marketing spend and guides you to make smarter decisions to improve profitability.

Q2: How do I calculate the ROI of an email campaign?

A2: To calculate email campaign ROI, use the formula: ROI = (Revenue – Cost) ÷ Cost × 100%. First, add up all revenue generated by the campaign. This could be direct sales attributed to the email, or an assigned value for conversions (like lead value).

Next, total all costs of the campaign, including your email platform fees (pro-rated), content creation, labor, and any other expenses. Subtract the cost from the revenue to get net profit, then divide by the cost.

For example, if an email brought in $10,000 in sales and your costs were $2,000, the net gain is $8,000. Divide 8,000 by 2,000 = 4, and multiply by 100 to get 400% ROI. In ratio form, that’s a 5:1 ROI (since you got $5 back for every $1 spent).

Remember to use net profit (after cost of goods) if possible for a true ROI. Most email platforms won’t calculate ROI % automatically unless you input costs, so you may do this in a spreadsheet or use built-in ROI calculators. It’s a simple calculation that provides powerful insight into your campaign’s success.

Q3: What is considered a “good” ROI for email campaigns?

A3: A “good” ROI can vary by industry and campaign type, but email marketing is known for very high average ROI. Multiple studies put the average email ROI around 36:1 to 40:1 (3600%–4000%), meaning $36–$40 return per $1 spent.

Some reports cite about $42 per $1 as a global average in recent years. By comparison, other channels like paid search or social ads often have lower ROIs. So if your email campaigns are hitting around 30:1 or above, you’re on par with industry benchmarks.

Excellent campaigns can perform far above average – it’s not uncommon for well-optimized programs to see 50:1, 70:1 or more. In fact, about 18% of companies report ROI greater than 70:1, and top performers (with superb segmentation, automation, etc.) might achieve 100:1 or higher on certain campaigns.

The key is to compare against your own baseline and industry. If you’re at 10:1 and the average in your sector is 30:1, there’s room to improve. Generally, anything above 10:1 is decent (still better than many marketing activities), 30:1+ is great, and the higher the better.

Remember that ROI isn’t everything – for example, campaigns that build customer loyalty might not show immediate high ROI but have long-term value – but it’s a critical metric to watch.

If your ROI is below expectations, revisit your strategy (content, targeting, frequency, etc.) to find efficiencies or opportunities to increase revenue.

Q4: How can I track which sales or leads came from my email campaign?

A4: Tracking attribution from email to sales/leads is typically done using a combination of your email platform and analytics tools:

Use your email platform’s tracking: Most email marketing services (Mailchimp, Klaviyo, HubSpot, etc.) have built-in analytics that track user actions.

For e-commerce, integrate your store (Shopify, Magento, etc.) with the email platform – this way it will automatically record purchases made by users who clicked through your emails.

You’ll see metrics like number of orders and revenue per campaign in your email report. For lead generation, if your email links to a form or landing page, some platforms can track form submissions from that email (especially if using embedded forms or unique links).
Google Analytics and UTM parameters: Ensure that the links in your email include UTM parameters (unique campaign identifiers).

For example, you might tag the URL as utm_source=email&utm_medium=newsletter&utm_campaign=SpringSale. In Google Analytics, you can then view conversions or e-commerce sales filtered by that campaign name.

GA will show how much revenue or how many goal completions came from that email campaign. This method is very effective for online conversions. It was noted that connecting Mailchimp with Google Analytics, for instance, is a quick way to attribute revenue to emails.
CRM and campaign tracking: If you’re using a CRM like HubSpot or Salesforce, use its campaign or source tracking features. HubSpot can automatically credit contacts and deals to an email campaign if the links or tracking code are set up.

That means if someone clicks your email, fills out a form, and eventually becomes a customer, HubSpot will tally the revenue in the email campaign’s results. This is crucial for B2B or multi-step sales.
Unique promo codes or landing pages: Another simple approach is using a unique coupon code or signup page for each email.

For example, email subscribers get code “EMAIL10” for 10% off – then you track usage of that code in order to gauge how much sales the email drove. Or you create a special landing page URL only used in the email – any leads or sales from that URL are attributed to the email.

In practice, you might use a combination of these. The easiest for online businesses is an ESP-store integration or GA tracking. For offline impacts, codes and manual reporting may be needed. The goal is to ensure every conversion has a trace back to the source.

When set up correctly, you’ll be able to say “This email resulted in 150 website visits, 40 orders, and $5,000 in revenue” and thus calculate ROI confidently. Most modern platforms are built to provide this kind of visibility, so take advantage of those features.

Q5: What expenses should I include in email marketing ROI calculations?

A5: You should include all direct costs associated with your email campaign to get an accurate ROI. Key expenses to factor in:

Email software/platform costs: If you pay for an email service (ESP) or marketing automation platform, include that. Use a proportional amount if the cost covers more than one campaign.

For example, if you pay $100/month and send four campaigns monthly, allocate $25 to each campaign’s cost.
Content creation and design: Any money spent on creating the email content. This could be freelance copywriter or designer fees, the cost of images or templates, etc. Even if you do it in-house, you might assign a value to that work (e.g., the hourly wage of the employee times hours spent).
Employee time/manpower: Time is money – if you or your team spend significant hours on the campaign, you can translate that into a cost. For instance, 10 hours of work at $30/hour is $300. Some marketers skip this in ROI, but it’s worth considering to see the true efficiency of campaigns.
Data and list costs: If you purchased an email list (which is generally not recommended practice) or spent on ads to acquire subscribers (like a Facebook Lead Ad campaign to grow your list), those costs should be included, typically amortized over the first campaign or first few campaigns to those contacts. Also, any costs for email verification tools to clean your list could be included.
Promotional costs: The cost of any incentives used in the email. For example, if you gave away a $50 gift card as a contest prize in the campaign, that $50 is a cost.

If you offered free shipping to everyone via that email, and 100 people used it at a cost of $5 each to you, that’s $500 cost attributable to the campaign. Essentially, consider the margin impact of promotions.
Miscellaneous tools or overhead: Perhaps you use an email testing tool, or pay for a SMTP service, or other software integrated specifically for email – include those if they were needed for the campaign.

If you have a dedicated email marketing specialist on salary, you might include a portion of their salary as part of the overhead for all campaigns.

In short, any expenditure required to execute the email campaign should go into the cost side of the ROI formula. This comprehensive approach prevents under-counting costs.

It’s better to slightly over-count costs and find you still have a good ROI, than to ignore costs and believe your ROI is rosier than reality. Including all costs might bring your ROI percentage down a bit, but it gives you a truthful assessment of profitability.

Plus, it can highlight areas to become more efficient. For example, if content creation is a big chunk of cost, maybe templates or repurposing content could reduce that.

Or if your ESP cost is very high relative to returns, maybe it’s time to negotiate or consider alternatives. The accuracy of ROI hinges on the accuracy of the cost side data, so be thorough.

Q6: How can I improve the ROI of my email campaigns?

A6: Improving ROI means either increasing the revenue generated by your emails, reducing the costs, or (ideally) both. Here are some high-impact ways to boost ROI:

Increase your conversion rates: Revisit your email content and design to make sure it’s as effective as possible at driving action. This can include writing better subject lines (to get more openings), more persuasive body copy, clearer CTAs, and using strong visuals.

Also optimize the landing page or site experience after the click – a smoother checkout or sign-up will turn more clicks into sales. Even small lifts in conversion rate (e.g. from 3% to 4%) can significantly improve revenue and ROI.
Use segmentation and personalization: Rather than sending one blanket email to everyone, segment your list so you can tailor messages.

Personalized emails have higher engagement and sales, leading to better ROI. For example, send product recommendations based on past purchases, or target different industries with content specific to their needs.

Segmentation ensures subscribers get relevant content, which makes them more likely to respond (and not unsubscribe).
Implement automated campaigns: Automation (like welcome series, cart abandonment emails, re-engagement campaigns) can yield a lot of revenue with minimal ongoing cost.

These trigger-based emails often have higher open and conversion rates, thus boosting ROI significantly. Once set up, they continuously generate returns.

For instance, an abandoned cart email might reclaim 10-15% of lost sales that you’d otherwise miss – that’s essentially free extra revenue from an automated workflow.
A/B test and optimize: Regularly test different elements of your emails to improve performance. Try two different subject lines, or a different email design, or various offers.

By finding the best-performing tactics, you can improve metrics across the board. As noted earlier, frequent A/B testing correlates with much higher ROI. Always be refining – what you learn from tests can be applied to all future campaigns.
Trim unnecessary costs: Look at where your money is going. Are you paying for a list of 50,000 contacts when only 20,000 are active? If so, pruning inactive subscribers could lower your ESP billing tier and save cost (while actually improving deliverability).

Are you spending a lot on fancy designs for every email? Perhaps create modular templates to reuse. By making your process more efficient and cost-effective, you reduce the “I” (investment) in ROI without sacrificing the “R”.

Just be careful not to cut corners on things that affect quality – it’s about smart spending, not just minimal spending.
Improve deliverability and sender reputation: Ensure your emails reach the inbox. Simple steps like authenticating your sending domain, using a consistent “From” name, cleaning your list, and avoiding spammy content can keep deliverability high.

If more emails get delivered and seen, more can convert, raising your ROI. It’s been found that keeping emails out of spam and in front of eyes can meaningfully boost ROI (some sources say by nearly 1.4x).
Consider multi-channel follow-ups: While email alone has great ROI, sometimes complementing it with other channels can amplify results. For example, following up an email campaign with a targeted SMS or retargeting ad can reinforce the message and capture additional conversions.

This can increase the overall return for relatively little extra cost (assuming you have those capabilities in place, like via an omnichannel platform). Just ensure the added cost doesn’t outweigh the gains – track the combined ROI.

Every audience and business is different, so it’s wise to analyze which lever will move the needle most for you. If your open rates are low, start by improving subject lines and segmentation.

If open/click are decent but conversion is low, focus on offer, design, and landing page. If everything is working but ROI is still middling, perhaps costs are too high – look into more cost-efficient tools or scaling your campaigns to get better economies of scale (email is very scalable; the cost of sending to an extra 1,000 people is often marginal, so growing a qualified list can improve ROI).

By continuously tweaking both the revenue side and the cost side, you’ll see your ROI climb over time.

Conclusion

Measuring the ROI of your email campaigns is essential for understanding the true value of your email marketing efforts. It empowers you to see how effectively you’re turning marketing dollars into revenue and identify areas for improvement.

In this guide, we covered how to calculate ROI step-by-step, from tracking every sale back to your emails, to summing up all costs involved. We also explored the key metrics that feed into ROI – like open rates, conversions, and revenue per email – and how to use popular platforms such as Mailchimp, Klaviyo, and HubSpot to gather these insights.

The big takeaway is that ROI brings accountability and clarity to email marketing. It helps businesses of all sizes, from small e-commerce shops to large B2B enterprises, ensure their email strategy is profitable.

And the good news is email consistently proves its worth – it boasts one of the highest ROI of any channel, often around 36:1 or more on average. By measuring ROI, you not only prove the value of email marketing to stakeholders, but you also gain the knowledge to optimize campaigns for even better results.

Remember that ROI is not static. You can continually boost your email ROI by applying best practices: refine your targeting and personalization, invest in automation, test and learn from your campaigns, and maintain excellent deliverability and list health.

Email marketing is dynamic – consumer preferences change, inbox competition evolves – so keep using your ROI data to adapt. The strategies that yielded a 500% ROI this year could potentially yield 600% next year with the right tweaks.

In conclusion, no matter your industry or business size, measuring and improving email ROI should be a core part of your marketing process. It ensures that every campaign is tied to business outcomes and that you’re getting maximum value from the effort you put in.

With diligent tracking, analysis, and optimization, you can turn email marketing into a revenue-generating engine that consistently delivers a strong return. Here’s to your next email campaign being your most profitable one yet, driven by data and a focus on ROI!