Email Marketing ROI: How to Measure the Impact of Your New Hire

Keith Kipkemboi

Email Marketer

Digital Marketer

Marketing Analytics Specialist

Recruiter

MailChimp

HubSpot

Google Analytics

Salesforce

Marketing

Email Marketing ROI: How to Measure the Impact of Your New Hire

Understanding and Calculating Email Marketing ROI

The Formula for Email Marketing ROI

What to Include in 'Total Revenue'

What to Include in 'Total Cost'

Why ROI is the Most Important Metric

Setting Your New Hire Up for Success

Establishing Clear Goals and Benchmarks

Ensuring Proper Tracking and Attribution

Defining a Reporting Cadence

Beyond ROI: Other Indicators of a Successful Email Program

Revenue Per Recipient (RPR)

Customer Lifetime Value (CLV)

List Growth and Health

Conclusion

References

Email Marketing ROI: How to Measure the Impact of Your New Hire

After you hire an email marketer, the next crucial step is to measure their impact on your business. Tracking Return on Investment (ROI) is the ultimate way to validate your hiring decision and understand the value your email channel generates. Whether you've chosen a freelance or a full-time professional, knowing how to measure their success is essential.

This article will guide you through calculating email marketing ROI and identifying the key metrics that demonstrate success. We'll also touch on other critical KPIs that paint a complete picture of your email program's health.

Understanding and Calculating Email Marketing ROI

Email marketing consistently delivers one of the highest ROIs of any marketing channel. In fact, many businesses see returns of $36 to $42 for every dollar spent. But here's the thing - you can't improve what you don't measure. Understanding how to calculate ROI is fundamental to proving your email program's worth.

When you bring on a new email marketer, one of their first tasks should be setting up proper tracking. This ensures you can accurately measure the financial impact of their work from day one.

The Formula for Email Marketing ROI

The basic formula is simpler than you might think:

ROI = (Total Revenue from Emails - Total Cost of Email Marketing) / Total Cost of Email Marketing × 100

Let's break this down with a real example. Say your email campaigns generated $50,000 in revenue last quarter. Your total costs (including your marketer's salary and tools) were $10,000. Your ROI would be:

($50,000 - $10,000) / $10,000 × 100 = 400%

That's a 400% return on your investment. Not bad, right?

What to Include in 'Total Revenue'

This is where things get interesting. Total revenue includes all sales and conversions you can directly link to your email campaigns. But how do you track this accurately?

Your email marketer should use UTM parameters on every link in your emails. These little code snippets tell your analytics tools exactly where traffic comes from. When someone clicks through an email and makes a purchase, you'll know that email drove the sale.

Don't forget to include:

Direct sales from promotional emails

Revenue from abandoned cart recovery campaigns

Sales from welcome series conversions

Repeat purchases triggered by retention emails

Most e-commerce platforms like Shopify or WooCommerce integrate with email tools to track this automatically. Your new hire should know how to set this up properly.

What to Include in 'Total Cost'

Calculating costs is usually more straightforward, but people often forget some expenses. Here's what to include:

Personnel costs:

Your email marketer's salary or freelance fees

Any design or copywriting support

Time spent by other team members on email projects

Tool and platform costs:

Email Service Provider (ESP) monthly fees

Design tools like Canva or Adobe Creative Suite

Stock photo subscriptions

Email verification services

A/B testing tools

Additional expenses:

Paid promotions to grow your list

Contest prizes or incentives

Training or courses for your email marketer

A typical small business might spend $3,000-5,000 monthly on email marketing, including a part-time marketer and tools. Larger companies often invest $10,000-20,000 or more.

Why ROI is the Most Important Metric

You might wonder why we focus so much on ROI when there are dozens of email metrics to track. Open rates, click rates, and conversion rates all matter. But ROI speaks the universal language of business - money.

Think about it this way. You could have amazing open rates of 40%. Your click rates might be through the roof at 15%. But if those engaged subscribers aren't buying, what's the point?

ROI connects all your email efforts directly to profit. It answers the question every business owner asks: "Is this worth it?"

When your email marketer shows you a 300% ROI, that means every dollar you invest returns three dollars in profit. That's a compelling story for any stakeholder.

Setting Your New Hire Up for Success

Measuring ROI accurately requires more than just math. You need the right systems, clear expectations, and proper tracking from the start. Here's how to set your new email marketer up to deliver measurable results.

Establishing Clear Goals and Benchmarks

Before your new hire sends their first campaign, sit down together and define success. What does a win look like for your email program?

Start with these questions:

What's our target ROI for the first six months?

How fast should our email list grow?

What conversion rate should we aim for?

How much revenue should email contribute to overall sales?

Be specific with your goals. Instead of "improve email performance," try "achieve 250% ROI and grow the list by 20% in Q1."

Your email marketer should also research industry benchmarks. If you're in e-commerce, average email conversion rates hover around 2-3%. B2B companies might see 1-2%. Knowing these numbers helps set realistic expectations.

Create a simple scorecard that tracks progress toward these goals. Review it monthly to spot trends and adjust strategies quickly.

Ensuring Proper Tracking and Attribution

Here's a truth bomb: most businesses don't track email revenue correctly. They're either missing sales or giving email too much credit. Your new hire needs to fix this immediately.

First, verify your analytics setup. Google Analytics should have e-commerce tracking enabled. Your ESP should integrate with your sales platform. Every email link needs proper UTM parameters.

Your email marketer should create a tracking template like this:

Campaign source: email

Campaign medium: newsletter, promotional, or transactional

Campaign name: specific campaign identifier

They should also set up conversion tracking for different customer actions:

Newsletter signups

First-time purchases

Repeat purchases

Average order value from email

Don't forget about multi-touch attribution. Sometimes a customer opens an email, doesn't buy immediately, but purchases later after seeing a social media ad. Modern analytics tools can track these customer journeys and give email appropriate credit.

Defining a Reporting Cadence

Regular reporting keeps everyone aligned and accountable. But drowning in daily metrics helps nobody. Find the right balance.

Here's a reporting schedule that works for most businesses:

Weekly: Quick performance snapshot

Last week's campaign results

Revenue generated

List growth numbers

Any urgent issues

Monthly: Detailed performance review

Full ROI calculation

Campaign performance breakdown

A/B test results and learnings

Next month's strategy

Quarterly: Strategic planning session

ROI trends and projections

Customer lifetime value analysis

Competitive analysis

Budget recommendations

Your email marketer should create a standard report template. This saves time and ensures you're always looking at the same metrics. Many ESPs offer automated reporting that can streamline this process.

Beyond ROI: Other Indicators of a Successful Email Program

While ROI reigns supreme, it doesn't tell the whole story. Several other metrics reveal the health and potential of your email program. These indicators often predict future ROI and help identify opportunities for growth.

Revenue Per Recipient (RPR)

Revenue Per Recipient might become your new favorite metric. It's simple yet powerful: total email revenue divided by the number of people on your list.

If your list has 10,000 subscribers and generated $50,000 last month, your RPR is $5. This means each subscriber contributes five dollars monthly to your bottom line.

Why does RPR matter? It helps you understand the true value of your audience. A smaller, engaged list with high RPR often outperforms a massive list of uninterested subscribers.

Your email marketer can improve RPR through:

Better segmentation based on purchase behavior

Personalized product recommendations

Win-back campaigns for inactive subscribers

VIP programs for top spenders

Track RPR monthly and watch for trends. If it's declining, your list might need cleaning or your content might need refreshing. If it's growing, you're doing something right.

Customer Lifetime Value (CLV)

A skilled email marketer doesn't just drive one-time sales. They build relationships that increase customer lifetime value. This metric shows the total revenue you can expect from a customer over your entire relationship.

Email marketing excels at boosting CLV through:

Welcome series that build brand loyalty

Educational content that increases product usage

Exclusive offers for repeat customers

Birthday and anniversary campaigns

Here's a real-world example. A skincare brand found that customers who engaged with their email content spent 67% more over two years than those who didn't. Their email marketer created a content calendar mixing educational skincare tips with product recommendations.

To track CLV improvements, compare customers who engage with emails versus those who don't. Most e-commerce platforms can segment customers this way. You'll likely see email subscribers have significantly higher CLV.

Your new hire should focus on strategies that encourage repeat purchases:

Post-purchase follow-up sequences

Replenishment reminders for consumable products

Cross-sell campaigns based on purchase history

Loyalty program communications

List Growth and Health

A growing, healthy email list is like a savings account for your business. It's an asset that generates returns month after month. But size isn't everything - quality matters more.

Your email marketer should track several list health metrics:

Growth rate: Aim for 2-5% monthly growth for most businesses. This accounts for natural list decay as people change emails or lose interest.

Engagement rate: What percentage of your list opens or clicks emails in a 90-day period? Engaged subscribers are far more valuable than dormant ones.

Churn rate: How many people unsubscribe monthly? A rate above 1% might signal content or frequency issues.

List hygiene: Regular cleaning removes invalid emails and unengaged subscribers. This improves deliverability and reduces costs.

Smart list-building strategies your marketer might implement:

Exit-intent popups with compelling offers

Content upgrades in blog posts

Social media campaigns driving email signups

Referral programs rewarding subscribers who share

Remember, a list of 5,000 engaged subscribers often generates more revenue than 50,000 uninterested contacts. Your email marketer should prioritize quality over quantity.

Conclusion

Measuring the impact of your new email marketer goes beyond tracking opens and clicks. ROI provides the clearest picture of success, directly connecting email efforts to business growth. By establishing proper tracking, setting clear goals, and monitoring both financial and engagement metrics, you'll quickly see the value your new hire brings.

Start with the ROI formula and ensure accurate revenue tracking. Set up regular reporting to stay informed without drowning in data. Look beyond ROI to metrics like Revenue Per Recipient and Customer Lifetime Value for a complete picture of email program health.

Most importantly, give your email marketer the tools and support they need to succeed. With proper measurement in place, you'll not only justify your hiring decision but also uncover opportunities to scale your email program's impact.

Remember, email marketing typically delivers the highest ROI of any digital channel. With the right person managing it and proper measurement in place, it can become your most profitable marketing investment.