Figuring Out if Your Email Marketing ROI is Actually Good for Your Business!
When I first started my little agency, I spent hours each week putting together emails to share my latest projects with customers. But it was hard to know if all that work was paying off. Was anyone even opening and reading them? Were they leading to more visits to my site or even sales?
I knew I needed to start tracking things better if I wanted my mailers to really start making a difference. A friend suggested I use Google Analytics to help measure how people were interacting with my emails. While it seemed pretty technical at first, once I got the hang of it I could finally see which emails were resonating and which topics my subscribers cared about most.
Now when I sit down to plan my next newsletter, I have real data to guide me on what catches people’s attention and how they respond. It gives me confidence to keep investing my time, knowing if I create relevant content that readers want to engage with, it will help my little business grow.
What is email marketing ROI and why is it important?
Email marketing ROI refers to the measurement of the return on investment generated by your email newsletters. It helps you understand the effectiveness of your email marketing efforts and enables you to make data-driven decisions to improve your campaigns.
By tracking the ROI of your email newsletters, you can determine the success of your campaigns in terms of revenue generated, conversions, and engagement metrics such as open rates and click-through rates.
Measuring email marketing ROI is important for several reasons. Firstly, it allows you to allocate your marketing budget effectively by identifying which newsletters are generating the highest return. Secondly, it helps you identify areas for improvement in your email marketing strategy.
Thirdly, it provides insights into customer behavior and preferences, allowing you to tailor your newsletters to better meet their needs. Overall, measuring email marketing ROI enables you to optimize your campaigns and drive better results.
Understanding the Impact of Your Emails with a real live example
As any small business owner knows, it’s important to make the most of your marketing efforts. When A friend of mine launched her cafe last year, I told her that email would be a big part of building her customer base.
“I love sharing the latest recipes and photos from the kitchen. But somewhere between writing the newsletters and hitting send, I realized I wasn’t actually tracking if all that work was paying off.”
She knew she needed a way to gauge how people were interacting with her emails and if it translated to more customers through the door. That’s when I helped her to start exploring metrics like open and click-through rates.
“Seeing those numbers gave me a whole new perspective. I could tell which subject lines or styles of content made people want to learn more. And I noticed busier weekends usually followed my mailers right away.”
Armed with that visibility, Joanne was better equipped to focus her energy. She doubled down on newsletter elements that seemed to drive the most traffic and sales. Over time, she gained a real sense of what type of information her readers found truly engaging and useful.
“It’s been really cool to see the direct impact my emails can have. Now I feel confident putting more thought and care into crafting messages my subscribers will appreciate. Which at the end of the day is good for them and good for business!”
By understanding how people responded through measurement, my friend Joanne found ways to heighten the value of her newsletters and continuously grow her cafe’s reach. It just goes to show that a little insight can go a long way.
How to set up Google Analytics for email marketing ROI tracking?
Before you can measure email marketing ROI with Google Analytics, you need to set up tracking for your newsletters. Here’s a step-by-step guide to help you get started:
1 — Create a Google Analytics account:
If you don’t already have one, sign up for a Google Analytics account and set up a new property for your website.
- Go to the Google Analytics website: Open a web browser and go to https://marketingplatform.google.com/about/analytics/.
- Create an account: Click on the “Start measuring” button in the top right corner.
- Provide an account name: Enter a name for your Google Analytics account, such as “My Website Analytics” or “My Business Analytics.”
- Configure data sharing settings: Choose whether you want to share data with other Google products, such as Google Ads and Display & Video 360.
- Click “Next”: Continue to the next step to create your first property.
- Create a property: Enter a name for your property, such as “My Website” or “My App.”
- Select the type of property: Choose whether you want to track website traffic or app usage.
- Enter your website or app URL: If you’re tracking a website, enter the full URL of your website. If you’re tracking an app, enter the app’s URL in the format “package_name://YOUR_APP_ID”.
- Select the time zone and currency: Choose the time zone and currency that you want to use for your reports.
- Specify your business objectives: Tell Google Analytics about your business objectives, such as increasing website traffic or generating more leads.
- Click “Create”: Google Analytics will create your property and start collecting data.
- Add a data stream: Google Analytics will ask you to add a data stream to start collecting data. If you’re tracking a website, you can add a Universal Analytics data stream using the Google Analytics setup wizard. If you’re tracking an app, you can add a Google Analytics 4 data stream using the Firebase console.
Once you have added a data stream, you can start using Google Analytics to track your website or app traffic. You can view reports on website traffic, user behavior, conversions, and more.
Here are some additional tips for opening a Google Analytics account:
- Use a strong password: Create a strong password that is difficult to guess.
- Enable two-factor authentication (2FA): 2FA adds an extra layer of security to your account.
- Review your data sharing settings regularly: Make sure that you are comfortable with the way that your data is being shared.
- Monitor your account for suspicious activity: Keep an eye out for any unusual activity in your account, such as unauthorized access attempts.
2. — Enable tracking for email campaigns:
In your Google Analytics account, navigate to the admin section and select the property for your website. Under the “Tracking Info” tab, click on “Campaigns” and enable the option for “Enable Demographics and Interest Reports”.
- Tag your email newsletter links: To track the performance of your email newsletters, you need to add UTM parameters to the links in your newsletters. UTM parameters are tags that you add to the end of your URLs to track the source, medium, and campaign name. You can use Google’s URL Builder tool to generate UTM tags for your newsletter links.
- Integrate Google Analytics with your email marketing platform: Most email marketing platforms have built-in integration with Google Analytics. Consult the documentation or support resources of your email marketing platform to learn how to integrate it with Google Analytics. This integration will allow you to track specific email campaigns and measure their performance in Google Analytics.
How to calculate email marketing ROI with Google Analytics?
Once you have set up tracking for your email newsletters, you can start measuring their ROI using Google Analytics. Here’s a step-by-step process to calculate email marketing ROI:
- Define your goals: Before you can measure ROI, you need to define the goals of your email newsletters. These goals can include revenue generated, conversions, lead generation, or any other key performance indicators (KPIs) that align with your business objectives.
- Create custom goals in Google Analytics: In your Google Analytics account, navigate to the admin section and select the property for your website. Under the “View” column, click on “Goals” and create custom goals that align with your email newsletter objectives. For example, if your goal is to generate revenue, you can create a goal that tracks the number of transactions, or the total revenue generated from email campaigns.
- Track conversions: With your goals set up, Google Analytics will start tracking conversions from your email newsletters. You can view the conversion data under the “Conversions” tab in Google Analytics. This data will give you insights into the number of conversions, conversion rate, and revenue generated from your email campaigns.
- Calculate ROI: To calculate the ROI of your email newsletters, you need to compare the revenue generated from your campaigns with the cost of running those campaigns. The cost can include expenses such as email marketing software, design, copywriting, and any other associated costs. Divide the revenue generated by the cost and multiply by 100 to get the ROI percentage.
How to improve email marketing ROI with Google Analytics?
Now that you have the tools to measure email marketing ROI with Google Analytics, let’s explore how you can improve your ROI by leveraging its features:
- Segment your audience: Use Google Analytics to segment your audience based on demographics, behavior, or engagement metrics. This will allow you to tailor your email newsletters to specific segments and deliver more relevant content, resulting in higher engagement and conversions.
- Analyze engagement metrics: Dive deep into the engagement metrics of your email newsletters, such as open rates, click-through rates,bounce rates, and time on page. Identify patterns and trends to understand what content resonates with your audience and what needs improvement. Use this data to optimize your email newsletters and increase their effectiveness.
- Perform A/B testing: Use Google Analytics to conduct A/B tests on different elements of your email newsletters, such as subject lines, call-to-action buttons, or design layouts. Analyze the results to identify the variations that perform better and implement them in your future campaigns.
- Track conversion funnels: Set up conversion funnels in Google Analytics to track the entire customer journey from receiving the email newsletter to completing a desired action, such as making a purchase or filling out a form. Identify any bottlenecks or drop-offs in the funnel and optimize those areas to improve your conversion rates.
- Monitor campaign performance: Regularly monitor the performance of your email campaigns in Google Analytics. Keep an eye on key metrics such as open rates, click-through rates, conversion rates, and revenue generated. Identify any fluctuations or anomalies and take proactive measures to address them.
How to measure email marketing ROI with Google Analytics dashboards?
Google Analytics provides customizable dashboards that allow you to visualize and monitor your email marketing ROI metrics in real-time. Here’s how you can create a dashboard to measure email marketing ROI:
- Navigate to the Dashboards section: In your Google Analytics account, click on “Customization” in the top navigation menu and select “Dashboards”.
- Create a new dashboard: Click on the “+ New Dashboard” button to create a new dashboard.
- Choose a layout: Select a layout for your dashboard that best suits your needs. You can choose from a blank canvas or pre-built templates.
- Add widgets: Click on the “+ Add Widget” button to add widgets to your dashboard. Choose the metrics and dimensions that you want to display, such as revenue generated, conversion rate, open rate, or any other relevant metrics.
- Customize and save: Customize the appearance and configuration of your widgets as per your preferences. Once you are satisfied with the setup, click on the “Save” button to save your dashboard.
By creating a custom dashboard in Google Analytics, you can have a consolidated view of your email marketing ROI metrics, making it easier to track and analyze the performance of your campaigns.
Here’s what else to consider
When measuring email marketing ROI with Google Analytics, there are a few additional factors to consider:
- Attribution modeling: Google Analytics offers different attribution models that determine how credit is assigned to different touchpoints in the customer journey. Experiment with different attribution models to understand the impact of your email newsletters on conversions and revenue.
- Frequency and timing: Monitor the frequency and timing of your email newsletters. Test different sending frequencies and times to identify the optimal schedule that generates the highest engagement and conversions.
- Content relevance: Ensure that your email newsletters provide valuable and relevant content to your subscribers. Personalize the content based on their preferences and behavior to increase engagement and conversions.
- List hygiene: Regularly clean and update your email subscriber list to maintain a high-quality audience. Remove inactive subscribers and ensure that your list is GDPR compliant to avoid any legal issues.
- Benchmarking: Compare your email marketing ROI metrics with industry benchmarks to gain insights into how your campaigns are performing relative to your competitors. This can help you identify areas for improvement and set realistic goals for your email marketing efforts.
In conclusion, measuring email marketing ROI with Google Analytics is essential for optimizing your email marketing campaigns. By setting up tracking, defining goals, and analyzing the performance metrics, you can make data-driven decisions to improve your ROI. Leverage the features of Google Analytics, such as segmentation, A/B testing, and dashboards, to enhance the effectiveness of your email newsletters and drive better results. Remember to continuously monitor and optimize your campaigns to stay ahead in the competitive landscape of email marketing.