The Cost of Email Marketing and How to Budget For It | Brafton

How much does it cost to attract and retain customers through an email marketing strategy? Do bulk emails even make an impact? How do I measure the effectiveness of my mailing list?

Let’s look at some stats:

Fast Email Marketing Statistics

Email marketing is one of the most popular drivers of customer loyalty. In fact, 64% of small businesses rely on email marketing as their primary means of customer acquisition, and 71.8% rely on their email marketing strategy to communicate with customers.

These stats illustrate why so many businesses commit to email marketing as a central element of their growth strategy:

Email marketing conversion rates can be a little more difficult to pin down because industries define them differently. For example, a software company might use demo signups as its primary conversion metric, while e-commerce companies define conversions as completed purchases.

So how much does it cost to get these results? It depends on the level of commitment to the strategy, as well as the types of tools and technologies used.

Here’s what the statistics show at a high level:

These figures show a wide range of spending. Ultimately, businesses need to look at a number of factors to determine what their email marketing budget should look like. Next, let’s see what elements contribute to the cost of email marketing.

What Factors Determine the Cost of Email Marketing?

Email marketing campaigns can be very simple or highly complex. On one end of the spectrum, a single marketing stakeholder can run small campaigns using freely available technology. On the other end, enterprises use automation and customer relationship management (CRM) tools to deliver large-scale campaigns.

Ultimately, email marketing spend falls into three buckets: technology, creative and data:


Any email marketing tool accounts for a large portion of email marketing expenses. It’s not advisable to send marketing emails from a personal email account. Under the CAN-SPAM Act, marketers are required to provide an easy way for recipients to opt out of future emails. Personal accounts do not provide the ability to opt out with a single click.

Fortunately, there are many email marketing platforms available at various price points, with most offering free trials. Some examples include:

  • AWeber: Designed for small businesses, AWeber has a number of useful features that allow marketers to automate email sequences, qualify leads, create templates, track results and much more.
  • Campaign Monitor: Built around drag-and-drop functionality, Campaign Monitor comes with hundreds of professionally designed templates to choose from. Its robust data integrations make it possible to customize sequences based on customer information.
  • WooCommerce: This e-commerce platform for WordPress features many marketing integrations, including the ability to connect a MailChimp account to a digital storefront.


Marketing automation tools make it easier than ever for business leaders to streamline email marketing campaigns, but no machine can write effective email copy. For that, you still need flesh-and-blood writers who understand your brand and its appeal to customers.

A lot goes into the creation of captivating email copy. Recipients make snap decisions based on email subject lines, so the copy has to be written by someone who understands what recipients want to read about. Creative writers can produce copy that encourages recipients to click into the email and then click through to your organization’s website.

Businesses that choose to produce copy in-house may save money in the short term but could end up spending a lot of time writing email variations. Time spent writing and split-testing email copy may be better spent running the business. For that reason, many leaders choose to work with marketing agencies to help with copy.

Beyond copy is the powerful medium of video. A few relevant statistics support incorporating video into your campaigns, whether in-house or outsourced, personalized or mass-produced: 

Your creativity is as good as your problem-solving. Producing good content can be a challenge and finding a great mixed-media approach to your email marketing campaign will take iteration and refinement. Video paired with the right copy can make your CPM rate soar and even increase your social media presence. 


For your email strategy to be effective, you need a strong email list. Considering that 99% of consumers check their email every day, there’s a good chance the people you want to reach will at least be open to the idea of reading your messages. However, you need their permission before you can send them messages.

There are many ways to grow your email list. For example, you can add CTAs to your blog posts to encourage readers to sign up for your newsletter. Or, you could create gated content like eBooks, which people can download in exchange for their email addresses.

Using CRM software, you can create a better picture of each customer on your list. The more information you have, the better you can segment your lists and create the customized email content.

When you need to grow your email list fast, you may want to consider purchasing an email list. This can be a little confusing for new marketers because you don’t really purchase a list of email addresses – remember, you need permission to send someone a marketing email. Instead, you pay for access to lists acquired by other organizations, such as market research firms. The list provider, or broker, will help you send customized messages and send you reports on open rates, etc.

Be wary about buying cheap lists that claim to contain millions of addresses. They’re likely filled with junk accounts that no one actually checks. Numbers to keep in mind are that consumer lists cost between $100 and $400 per thousand emails, and business lists cost between $200 and $1,000 per thousand.

The 3 Types of Email Marketing

Email marketing can be the key to unlocking your business goals — but not all emails are created equal. In fact, there are 3 main types of emails that businesses should be aware of to make the most of their campaigns. Let’s take a closer look at each one:

  1. Newsletter email: This type of email is all about keeping your audience in the loop. It’s a great way to share news, updates, and promotions with your subscribers on a regular basis. Newsletters can be weekly, bi-weekly, monthly or any other frequency that works for your business. The focus should be on providing value to your audience members so they look forward to receiving your emails.
  2. Transactional email: These emails are triggered by a specific action or transaction, such as a purchase confirmation or a password reset. While transactional emails are often less exciting than newsletter emails, they’re incredibly important for building trust and maintaining a positive customer experience. Be sure to include all the necessary information, such as order details or login credentials, and consider adding a personal touch to make the email feel more human.
  3. Behavioral email: Behavioral emails are highly personalized and can be incredibly effective at driving conversions and engagement. For example, if a subscriber abandons their cart on your website, you could send them a reminder email with a discount code to encourage them to complete their purchase. 

How to Budget for Email Marketing

Email marketing is a cost-effective way to reach and engage with your audience. However, like any marketing initiative, it’s important to budget and plan your email campaigns to ensure they’re effective and efficient. Here are some key steps to help you create an email marketing budget:

  1. Determine your goals: Before you can create a budget, you need to understand what you want to achieve with your email marketing campaigns. Are you looking to drive sales, increase website traffic or improve customer engagement? 
  2. Identify your costs: Consider costs that come from investments such as purchasing email marketing software or hiring a dedicated email marketer, as well as design and copywriting resources. Alternatively, outsourcing to a third-party service provider that offers a range of services such as list management and analytics is also an option.
  3. Set your budget: Once you know your goals and costs, you can set your email marketing budget. Consider factors such as the size of your subscriber list, the frequency of your emails and the type of content you plan to create.
  4. Track and measure your results: To ensure you’re getting the most out of your email marketing budget, it’s important to track and measure your results. Analyze metrics such as open rates, click-through rates and conversions to see how your campaigns are performing. Use this data to refine your strategy and adjust your budget accordingly.

Remember, email marketing is an ongoing process, and your budget may need to be adjusted as you learn more about your audience and the effectiveness of your campaigns. 

Email Marketing Strategy Best Practices

If you’re going to spend money on email marketing, you want to get it right. But have you ever wondered what sets successful email campaigns apart from the rest? The answer lies in the 5 T’s of email marketing and some additional best practices that can help you craft effective email campaigns that engage and convert your audience.

The 5 T’s of Email Marketing:

  1. Tease: A great subject line and compelling preheader text can make or break your email campaign. Tease your audience with something attention-grabbing that entices them to open and read your email.
  2. Target: Knowing your audience is key to crafting effective email campaigns. Use segmentation and personalization to target your emails to specific groups of subscribers based on their interests, preferences and behavior.
  3. Teach: Provide value to your subscribers by teaching them something new. Share your knowledge and expertise on topics related to your industry or products to help build trust and authority.
  4. Test: Experiment with different elements of your email campaigns, such as subject lines, content and design, to see what resonates best with your audience. Use A/B testing to make data-driven decisions and optimize your campaigns over time.
  5. Track: Monitor your email campaign metrics to see how your campaigns are performing and identify areas for improvement.

In addition to the 5 T’s, there are some best practices you should follow to create successful email campaigns. These include cleaning and maintaining your mailing list regularly, having a strong email signature, being consistent in your typeface, avoiding purchasing contact lists, growing your email list organically and having a strategy to re-engage inactive subscribers.

How To Measure the Success of Your Email Marketing Strategy

You need to measure your email marketing strategy to ensure you’re getting an acceptable return on your investment. If you use Google Analytics for campaign tracking, you can easily create reports to help you visualize your results. Here are a few important metrics to track:

Open rate (percentage of recipients who open your email), Click-through rate (percentage of recipients who clicked on a link within your email), Conversion rate (percentage of recipients who completed a desired action)

Open Rate

Calculation: Total number of opens / total number of emails delivered

Monitoring your open rate can show you how effective your subject lines are at capturing reader interest. If your open rate is low or begins to drop, consider A/B testing your subject lines.

Click-through Rate

Calculation: Total number of click-throughs / total number of emails delivered

Click-through rate helps you measure the effectiveness of your email body copy and link anchor text. If you have a high open rate and a low click-through rate, it’s a sign that you need to adjust your copy or re-think your CTAs.

Conversion Rate

Calculation: Total number of conversions / total number of emails delivered

This shows the ultimate success of your campaign. You’ll need the other metrics on this list to help you understand why your conversion rate is high or low.

List Growth Rate

Calculation: (Total number of new email subscribers – number of unsubscribes) / total number of subscribers

Growth is good. Use this metric to determine whether or not you need to adjust your content marketing strategy to bring in new subscribers.

Unsubscribe Rate

Calculation: Number of unsubscribes / total number of emails delivered

A high unsubscribe rate means that your readers aren’t getting much value from your messages. Go back to your market research and try to find where the disconnect is between your messaging and your audience’s needs.

A Newsletter-Based Email Marketing Strategy for Small Businesses

SMBs commonly center their email marketing strategy approaches around a weekly or bi-monthly newsletter. This is a good option for businesses that don’t need to do much audience segmentation. Here’s what the strategy might look like:

The Newsletter

Depending on the nature of your business, your newsletter might look like a traditional piece of direct mail that highlights top-selling products and special offers. Or, it might be a collection of useful information, relevant news stories and links to interesting articles.

Typically, email newsletters contain calls to action that encourage readers to click through to the brand’s website to learn more or shop.

Supporting Content

Inbound marketing is built by brands using their content marketing materials to encourage newsletter signups. For instance, blogs might contain CTAs that ask readers to submit their email addresses. Or, they can use larger pieces of content, like eBooks, as lead magnets to bring in new email subscribers.

Drip Campaigns

In addition to the regular newsletter, SMBs sending emails can also use automation platforms to send targeted messages at various stages of the buyer journey. Examples include:

  • Welcome email: When customers sign up for the newsletter, a welcome email can encourage them to add the email to their whitelist, ensuring future messages don’t get sent to the junk folder.
  • Cart abandonment: If potential customers put items into their shopping carts without completing a purchase, an e-commerce platform can send an automated reminder to see if they have any questions about the products.
  • Follow up: CRM software can send custom follow-up emails based on interactions customers have with the brand’s website or a member of the sales team.

Enterprise Email Marketing Strategy Examples

Enterprises may send thousands or millions of emails every day. They require scalable solutions with robust segmentation abilities. In addition, enterprises are more likely to leverage big data to glean insights about their customers.

Segmentation Automation

Enterprises use CRM platforms like Salesforce to track interactions with customers on a national or global scale. While hyper-personalization isn’t always possible, they can still segment their lists based on previous customer interactions, data from market research firms and similar sources.

Complex Email Sequences

Enterprises may have sales cycles that take months to complete. They use automated email sequences to keep their buyers engaged. By monitoring sales interactions and collecting pieces of customer data, enterprises can develop multi-stage email sequences to nurture leads and provide value before they complete the sale.

Email Blasts

At the enterprise level, list segments can be quite large, containing thousands of addresses. To reach people within these segments, brands leverage email blasts, which are single messages sent to a large base of recipients. Blasts can be used to introduce new products, announce events, conduct surveys and much more.

B2B and B2C marketers often use blasts to list

If you want to increase your average customer lifetime value, you need a direct line of communication with the people interested in your offerings. Email marketing remains one of the most viable strategies for maintaining deep connections with your customers.

Editor’s Note: Updated February 2023.

Source link

#Cost #Email #Marketing #Budget #Brafton