The conversion rates of email marketing campaigns in the eCommerce space are very high compared to many other marketing channels.
Clicks from eCommerce campaigns usually have a lot of context and intent. This means that conversion rates from email marketing campaigns are usually quite high.
Email is a great way for your customers to recommend you to their friends.
The best marketing is word of mouth, and email automates this process as you can encourage your email subscribers to simply forward your emails to increase awareness and attract additional subscribers.
It's important to know how much each of your email subscribers is worth.
If you’re an e-commerce company with an online store, you have many goals. You want to build a community. You want to increase awareness. You want to grow your social media following. But your main goal is to drive sales and, more importantly, drive profitable sales.
I’ve said before that email marketing for ecommerce can be your most profitable marketing channel. But to make this channel successful, you need to do something that many other ecommerce companies don’t do – you need to determine how much each of your email subscribers is worth to you. By doing this, you can:
Create predictability in your business
To scale your e-commerce business, you need predictable growth channels. If you don’t know how much an email subscriber is worth, you won’t be able to create the predictability you need to invest in email as a channel.
predictability of forecast
Determine the true ROI of your email list building efforts
If you don't know how much an email costs, it's impossible to determine the ROI of marketing efforts aimed specifically at increasing your email subscribers.
More accurately determine the true ROI of your other channels
One of the dangers of eCommerce marketing is that you turn off channels that are actually profitable but you don’t realize it. For example, you might test Facebook ads , and those tests will show that your ROAS isn’t high enough. You might have a lot of people coming to your site, but too few of them are making a purchase. For that reason, you might turn off Facebook ads.
But what you don't realize is that people love your store, but aren't ready to buy right now. So they add their name to your email list. If you don't know how much your email subscribers are worth, you may not take that into account when buying Facebook ads and end your campaigns prematurely.
E-commerce success is math
E-commerce is an art. You have to have great products. You have to have a great store. You have to have something you're passionate about. But you also have to know math. And in math, you have to assign a value to each part of your funnel.
This will help you in partnership
When you know the value of each email subscriber, you can understand when a partnership is successful and when it is not.
partnerships to get more email subscribers
Lets you know when to scale
Most e-commerce businesses simply choose to increase or decrease their budget each month. But the tricky thing about any online business is that there are leading indicators. This means you may not see sales and revenue growth from scaling for a couple of months.
You want to make informed decisions about when and how much to scale. And to do that, you need to make decisions based on immediate actions (conversion to sales) and leading indicators (like the number of email subscribers and the likelihood that they will buy later).
How to Determine How Much Each of Your Email Subscribers Is Worth: The Basics
Well, now comes the fun part. We need to figure out how much each of your eCommerce subscribers is worth. Here's a quick formula for that:
Monthly revenue from email as a channel divided by the number of email subscribers = gross monthly revenue per email subscriber.
This is the best place to start. Here you should make sure that you have GA (or another analytics platform) set up to track the number of purchases that come from email clicks. This should be easy to do by including a specific UTM in each of your emails. You can use one common UTM across all of your eCommerce email marketing campaigns. Or you can get complicated and use different UTMs for different campaigns and combine them.
Source: SendX Tracking URLs
Ideally, you can assign the total revenue generated by your email subscribers and the actual average order values (AOV) of purchases made by your email subscribers. This will give you the most accurate picture and allow you to make further changes in the future.
Let's look at an example...
Jim's Online Flowers averages $30,000 in online uk whatsapp number list sales per month.
Jim sees his eCommerce email marketing efforts averaging $15,000 per month.
Jim also knows that he has 5,000 email subscribers who receive his e-commerce marketing emails every month.
This means that each email subscriber Jim has brings him $3.00 in gross revenue.
This means that, theoretically, if Jim wants to grow his online income to $60,000 per month, he will need to figure out how to get 20,000 email subscribers.
But Jim can't stop there.
He has to consider the cost of goods sold to know how much he can spend to acquire an email subscriber.
So, let's say Jim spends $50 on each flower, which he sells for $1.00.
This means that Jim is better off using the following equation:
