Email Marketing ROI and response rates

According to the report of the DMA 2012 Response Rate Report Email marketing response rates are, next to those of display, the lowest of all direct response channels.

Loyalty email marketing campaigns generate, on average, an average of response rate of 0.12%. This means that for every 100 users who saw the Call To Action in the email, 0.12 responded positively (converted).
Direct mailing actions (paper) generate, on average, a 3.4% response rate, almost 30 times higher than email. The only channel with a lower response rate than email marketing is display, with 0.4%. Surprisingly, the highest response rates are offered by the much-maligned telemarketingwith 12.95%.

When the variable "costs" is introduced into the analysis to obtain the ehe ROI of Email Marketing and the rest of the channels, the picture changes significantly.. The costs of sales through telemarketing are 78$ per order or lead (if the database is owned) and 190$ if the database is rented.

From the perspective of return, the Email Marketing ROI is the best performer, with a return of 28.50$ for every 1$ invested.. This is mainly due to their low cost. Against this background, it is not surprising that there is a temptation, justified in many cases, to increase the mailing pressure on the various lists. The more I send, the more I earn. This is the upside. The downside is the increase in unsubscribes, complaints and thus the damage to our reputation as a sender.

The key is to find the right balance in the intensity of the sending we do. Ehe ROI of Email Marketing is an interesting metric, but it does not reflect the cumulative value of the database. For this, variables such as the Churn Rate must be introduced. The metric that can help us to have a vision of the future is the Customer Lifetime Vlue.