figures from your campaigns start coming back, it is inevitable that ROI
discussion will be a central topic, particularly with senior management. While
it would be foolish to diminish the importance of ROI (particularly with those
who are providing budget for your campaigns!), nevertheless the merits of a
pure ROI focus is a topic of debate right now. This is particularly the case as we see
greater convergence of email marketing with other channels such as social
media, which makes it that bit harder to assess its true independent impact on sales
Marketing Reports", Kevin Hillstrom, CEO of
Minethatdata discusses the often problematical use of ROI as a definitive
metric. Consider the following hypotheses:
marketing ROI is based on low cost, not revenue generation
on email marketing can be high, this assumption is based primarily on the low
set-up and execution cost inherent in the technology, rather than on revenue
generation through subsequent product or service sales.
instance, in non-branded paid search, you may generate 100 clicks, spending
$50, to generate one order for $100. In catalog marketing, you may spend $50
sending catalogs to generate two orders for $100. In email marketing, you may
spend a dollar sending 700 emails to generate one order for $100."
instance email does have clearly the best ROI; however that's based purely on
the low cost base.
the relative value of email marketing
relative value of email marketing changes when you look at other measures of
financial success. Taking the above example a stage further:
marketing would generate $1,400 sales for every 700 catalogs mailed.
Non-branded paid search would generate $700 for every seven hundred clicks.
Email marketing would generate $100 for every 700 emails sent."
If we take
the above into account, email marketing is the worst performer. It is therefore
fair to say that a great ROI does not necessarily correspond to significant
revenue growth for the business.
"best" channel depends on your goals.
clear that, as mentioned in previous blogs on "email marketing strategy", that the
best marketing channel and metrics for analysis, depends on your company goals.
In the above example, catalogue generated a lower campaign ROI, yet generated
more profit on paper. Conversely, email had the best ROI but limited potential
in this scenario to drive huge sales and profit increases.
conclusion reached by much of the best practice research on email marketing, is
that unfortunately many businesses are still willing to accept low email
conversion rates as long as the ROI is "proven". This will have to change if
you are to realise the longer term benefits of effective and profitable email
final phase of this (long-running) series on email marketing, we turn towards
the product - Sage E-marketing for Sage CRM. This was released last year in
If you are
a newcomer to CRM in general, Sage CRM in particular, or the email marketing
functionality within version 7.1 (as an existing customer), you may find the
next set of blogs useful. These will provide a high level overview of the
functionality, with explanation of the various screens you will see in front of
you. Those of you familiar with the functionality may wish to skip these blogs.
and to conclude these blogs as a complete series, we will do a detailed
analysis of the demo story that comes out-of-the-box in version 7.1. The
purpose here will be to give you, as a user or interested observer, some
context and narrative using sample data.
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