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Why you should start calculating your Revenue Per Email today

Aside from Return On Investment (ROI), Revenue Per Email (RPE) is one of the most valuable metrics you can track. Still, not a lot of marketers out there are doing it.

A MarketingSherpa study showed that none of the email marketers involved in the survey reported on ROI and only 33% of them track RPE. The rest limits their tracking to open rates, click-through and interaction rates. Needless to say, this leaves lots of room for improvement.

When it's hard to calculate ROI (or ROMI, Return On Marketing Investment, if you only take marketing costs into account), because it appears to be difficult to attribute marketing costs, calculating Revenue Per Email can be a good alternative. It doesn't exactly reflect profit, but can give you a good indication on the amount of revenue email campaigns generate + the total potential revenue value of an opt-in list. 

Basically, RPE = revenue generated per emails delivered. 

To link standard email metrics to revenue, you have to combine them with your web analytics (Google Analytics or other), where you define goals and funnels. And that's also where you define your conversion value. When you're in e-business, that's a 1-on-1 exercise. But for mixed or offline business, that's an essential part too. Not only in calculating RPE, but also for email marketing in general, as email is only a traffic driver and should be tracked in the same way as SEA or display ads. 

Revenue Per Email can be used in different ways, all giving their specific insights:
-    RPE per email contact
-    RPE per email campaign
-    RPE per month (on the total volume of emails delivered to the email opt-in list, whether sent to the entire list or to different segments) 
-    RPE per customer profile segment (product segments or transactional) 

Once you begin calculating RPE, you have a new and valuable tool on your hands to evaluate and optimize your email marketing performance. And you will be able to present the value and sales contribution of your email marketing channel in management reporting.

Stay tuned, as our next tipmail will focus on a case study to illustrate what RPE is all about…

Conclusion

Calculating the Revenue Per Email delivered gives you valuable insights on how well your email marketing campaigns are doing. It will come in handy as a convincing tool in management reporting, and it's essential as a measurement tool to fine-tune your campaigns.

Posted on
Nov 14, 2013