Email marketing may be one of the oldest digital marketing channels, but proving its value - and determining your potential agency’s role in maximizing it - has never been an easy task. When you’re investing in both the channel and an agency to manage it, the real question becomes: is the expertise you’re paying for truly driving results?

The key performance indicators for email marketing are less easily ascribed value than, say, ecommerce conversions, and channel costs aren’t as consistent as “average CPA” is for paid search marketing or “fixed commission rates” are for affiliate marketing. Add an agency’s fees on top of that, and brand marketers often face an uphill battle convincing stakeholders of the value in fully investing in email marketing expertise.

In this post, we’ll help you calculate the value of your email marketing campaigns – and share considerations we encourage brand marketers to take when assessing whether to run email marketing campaigns themselves or work with an external partner.

How to calculate the ROI of email marketing campaigns

The goal of all digital marketing initiatives is to generate loyal customers who return for multiple transactions. But this goal comes into focus even more with email marketing, given the nature of email and its strength in developing long-term relationships with subscribers.

To calculate ROI for your email marketing efforts, focus on key metrics like Lifetime Value at the subscriber level, which isn’t as common to measure across other marketing channels. At the same time, we encourage you to assess leading indicators of success like open rate, click rate, and deliverability.

Unlike other channels, the costs of email marketing can vary, and its value extends far beyond a single user transaction. However, when ROI is calculated – especially with an agency that uses smart campaign strategies and top-tier automated journeys or triggered messages – it’s almost always overwhelmingly positive.

How to assess the value of your email marketing when there’s no direct connection to revenue

Take the total revenue of a specific campaign, triggered message, or journey and work backward to arrive at metrics like revenue per open, revenue per click, and revenue per email delivered. This can be valuable for brands that have costs associated with their sending volume. For brands that pay a flat fee for their email platform, the more controlled costs can create a clearer picture of the ROI and total incremental value being created.

How to calculate the value of new-user acquisition in CRM marketing

It’s important for brands to understand that a new-to-file customer doesn’t hold any inherent value. It takes further marketing to build recurring loyalty from that customer to create the actual value.

While there are clear costs associated with acquiring new customers, it’s crucial for your analytics and reporting teams to provide visibility into the revenue generated from the new records added to your database. Without this data, it’s much harder to optimize campaigns effectively. By closing the loop and tracking new customers back to the revenue they generate, you can identify the right levers to pull and maximize your ROI.

Should you hire an email marketing agency or keep things in-house?

An email marketing agency can often deliver immediate value by uncovering opportunities you might not have tapped into yet. Expanding personalization and implementing automated journeys, for example, are two proven strategies that can significantly boost campaign performance. When agencies find quick wins like these, they often help generate returns that more than justify your brand’s investment.

Another important consideration when evaluating whether to bring on an agency is the potential cost savings compared to hiring in-house experts. While agency fees may seem like an added expense at first glance, they can often offset the costs of building and maintaining an internal team. When assessing your options, think about how partnering with an agency could streamline your resources and reduce long-term expenses.

By asking the right questions, your brand can determine whether email marketing is the right channel for your goals and if partnering with an agency is the smart move to maximize its potential. If you’re ready to explore how an experienced agency can elevate your email strategy, we’d love to hear from you. You don’t need to sign any contracts to pick our brains about email marketing strategy, of course; we’re happy to jump on a call and provide insights on your brand’s specific growth opportunities anytime. Drop us a line at info@dmipartners.com to start the conversation.