The Economics of Email – A Simple Reminder
Depending on the day, predictions for the global economy vary from a mild but short-lived recession to one that is far more impactful and lasts throughout 2023. Distill that down to regional economic zones and predictions become even more varied.
One thing is certain, companies are shifting quickly to reign in expenses before one of these scenarios plays out. While that has unfortunately led to layoffs, it is also taking place in the form of line-by-line expense reviews.
Marketing departments are always one of the first to be asked to trim expenses. Speaking from personal experience over the course of my career, it’s an annual or semi-annual exercise in most companies, regardless of economic conditions. In uncertain times it comes with more urgency, but it’s a practice many of us have been through.
When those moments come around, the first thing I look to is the tried and true ROI metric to be my guide. Simply put, does the return from “x” justify the expense? If yes, then hopefully whatever defines “x” is spared. If not then of course it goes away.
Email – Proven, Consistent ROI
In times like these, and at any time to be honest, email is budget-friendly. Conduct a search on the ROI of email marketing and you’ll consistently find data that says email returns $35 – $40 for every $1 spent. Dig a little deeper and you’ll find this return seems to hold true regardless of the economic climate.
Even in 2020, one of the most uncertain times in recent history, email proved to be incredibly valuable as a retention tool. At a time when everyone was physically disconnected, email helped businesses remain digitally connected to current customers, allowing them to spend, donate, etc. It was how some businesses managed to hold on until some return to normal arrived.
Always Worth the Investment
While not every industry using email for direct or indirect revenue generation will see the same results, relative to other channels it’s still going to produce the greatest overall return. As a bonus the cost is quite predictable, which always makes your finance team happy.
By comparison, paid ad prices are rising, meaning budgets (normally set quite early in the year) exhaust much faster and deliver less return. Whereas even if your ESP puts through a price increase, it remains a predictable monthly cost and may only slightly impact your return.
While none of the above is new information, 2023 budgets are front and center, so when the inevitable expense review comes, consider this a reminder to keep email firmly in your plans. It’s the safest bet you have when it comes to your digital marketing channels. Its use cases are many, it’s a permission-based 1:1 communication, and it outperforms in terms of ROI.
Email certainly can’t be the only tool in your digital marketing toolbox, but it should be the one that you build around, employing other channels as complementary to boost your results even higher.
Whatever 2023 brings, email will continue to be the channel marketers can rely on to deliver results. If you need a little help or inspiration, check out our blog or guides some helpful insights and resources.
