In the context of ROI (return on investment), does email marketing stand a chance against some of the big boys: Facebook, Twitter, LinkedIn, Instagram? Google Ads? In this blog we will take a close look and see if good ole fashion email marketing still has a place in this ever expanding digital world.
First let’s set the tone for what all the other social media and digital marketing channels have to compete against. Email was the first means of communication in the new digital world that we entered into in the mid 1990’s. Email actually has a longer history going back to the 1960’s with ARPANET, but only became commercially viable in the 90’s with the growth of the home computer. Ok no more nerd talk, back to marketing.
Today 3.8 Billion people are using email. That is a big number, but is it an effective means of getting your marketing message out?
According to McKinsey , email is 40 times more effective at acquiring new customers than Facebook or Twitter. When you want to grow your company, grow your customer base, get your message out to new prospects, you turn to email. Why? Because email delivers better results than any other channel.
An email communication to your prospects is 5x more likely to be seen than viewed on Facebook. Social Media has given the digital marketer a new way to connect with customers and prospects but email still remains as a trusted source to get your message out.
Understanding email can also be a lot simpler than becoming an effective social media marketer. Essentially there are three metrics to wrap your head around to know if your email strategy is working. They are: Open rate, CTR (Click-Through Rate), and ROI.
For every $1 spent on email marketing $44 is made in return, according to a study by CampaignMonitor.
In my years of working with clients, email marketing is last on the list of channels that are effectively being used. Most of my clients are in the SMB market, and until now marketing automation and similar tools have been a little too complicated for the average business owner. More on that later…
Your email open rate is calculated by dividing the number of unique opens by the amount of emails sent, minus the number of email that bounce (aka: bad or non-existent email addresses):
Open Rate = Unique Opens / (Number of Emails Sent – Bounces)
According to mailchimp statistics, most industries have an open rate of 21% and a click-through rate of about 2%. Mailchimp on average produces much lower numbers than a company using a email marketing platform integrated into a marketing automation strategy. MailChimp is largely used as a email “blast” tool. Although that can be effective it is not the ideal way to communicate with your prospects.
Click-Through Rate (CTR)
Click through rate is the measure of how many people clicked on a hyperlink within the body of your email. It’s important to note that CTR is a somewhat variable number, which can fluctuate depending on the content of your email as well as many other different factors, but generally, a healthy rate falls in the 5 to 8% range.
If you had an 8% click-through rate, it would mean that for every 100 people who opened your email, 8 people went on to click a link within that campaign.
Email Engagement vs Social Media Engagement
Email today is largely an opt-in methodology so users likely are getting messages that they are interested in. The industry average for opt-outs of email communication is well under 1%. Spam is always a problem, but is much more under control than a decade or more ago. We have much better laws against spam, software is much better at filtering it out, and spam just doesn’t work, so companies are not pursuing it as a viable means of marketing.
Statista shows that more than 2.5 billion people use social media every month. So it makes perfect sense for companies to spend their marketing dollars in this area. However, it’s a mistake to think that social media is the only way to reach consumers.
According to Statista, there are 5.6 billion active email users around the globe in 2019. In fact, research compiled by Campaign Monitor indicates that 72 percent of people would rather receive brand content through email, while just 17 percent prefer to receive their brand messages from social media platforms.
72% people prefer to receive promotional content through email, compared to 17% who prefer social media.
Why does social media have such a lower number? It is simple, it comes down to solicited vs unsolicited. People opted-in to email communication and even though Facebook does a “good job” of profiling me to understand my interested, the ad is still unsolicited… and for some people they find that a little creepy. With Email you get the be the bouncer, and your inbox is the nightclub.
If you haven’t started an effective email marketing campaign yet you have a flip of the coin chance of being behind your competition. Only 50% of SMB are using marketing automation.
50%of small and medium-sized business use their marketing automation software to send email drip campaigns. – Statista
If you are not convinced that email marketing is something that your organization should be doing then I think I need to repeat myself.
Email marketing is the king of the castle with a 4400% ROI!
This blog isn’t about choosing email over social media marketing, it is about understand where you will be the most effective.
Social media marketing is an excellent tool when your goal is to expand your reach and engagement.To connect with new prospects and introduce your brand to the world.
Email marketing is just better at driving sales.