I was doing some light reading last night online on various marketing techniques, and I stumbled upon an article at Marketing Sherpa, by Adam T. Sutton, titled Email Marketing: Show me the ROI ,and Mr. Sutton discusses the wonderful advantages of using email marketing and how email marketing has one of the highest ROI’s in marketing overall stating that B2C marketing reports an average 256% ROI. I am so tired of hearing these half stats. What do I mean by that you ask?
Ever since the DMA reported that according to their research that the return on investment of email marketing was $43 to $1 meaning that for every $1 spent that $43 would be made, people have been coming out of the woodwork with these crazy numbers such as Mr. Sutton. But he’s not alone, back in July of 2009 Chad White at MediaPost wrote an article Email Marketing’s ROI Probably Closer To $130 Than $43.52 stating that according to his research the DMA’s numbers were wrong and that the actual ROI was closer to $130, and of course in February Mr. Sutton blew that out of the water as stated above with his whopping $256 ROI.
Here’s the thing, I am not here to tell you that these guys are wrong, and I am not here as someone who doesn’t like email marketing, quite the opposite in fact; I think email marketing is one of the best marketing tools on the planet. My problem with all of these companies, and bloggers that are giving you stats, is that they are only giving you half stats, and this causes marketing companies loads of grief. What do I mean half stats? Well it is very possible that the numbers that they are giving are right, and the DMA has proven more than once that email marketing has an awesome return on investment and due to all of these guys reposting and blogging these stats to anyone who will listen, every small business with a thousand bucks to spend thinks that they can do an email marketing campaign and make $43,000, or $130,000 or $256,000 because according to all these reports that’s the payoff from using email marketing. What all these experts are failing to tell you is that anyone who made these types of returns did not just do an email blast and magically make truck loads of money. Most of the companies if not all that this research was based on were larger companies who did research and development, customer analyzing, and market research, so they knew who their target customer was, they knew that this target responds favorably to the product or service being offered, they didn’t just start blasting email, and they did market sampling, they did test blasts, and when they finally did start their campaign, it was not a onetime blast, because in order for email marketing to be truly effective, consistency is a must. Another issue, these stats are based on emailing one’s own customers, not just anyone, its not quite as easy as it sounds. See my article from last year Using Email Marketing to Boost Salesfor some insight into what I am talking about.
I love email marketing, I have been using it for years, and I have sent more than my fair share of email, and I have sold email marketing to customers for years, but you have to give all the facts, not just part because not only is this misleading to small businesses, it becomes very aggravating for company that sells email marketing campaigns, because people keep throwing these stats at them, well according to “so and so” or according to the DMA If I spend $500 then I should get a return of over $20,000. Mr. Sutton and Mr. White please add another paragraph or two to your article in the future and give people all the information, and if you don’t have all the information, than please give me a call and I will be happy to help you out.
Joe Melle has founded and ran several successful businesses, and has had an interesting career in direct contact media, call center operations, sales operations, customer service operations, customer retention, and quality assurance; he has written over 140 business articles, and serves as a part time adjunct professor for a university teaching business, marketing, and management courses to both graduate and post graduate students.Email Me