Email Economics : A Simple Reminder
Predictions for the global economy vary from a modest but brief recession to one that is far more severe and lasts through 2023, depending on the day. Predictions get even more variable when that is reduced to regional economic zones.
Companies are moving swiftly to control costs before one of these situations occurs, that much is certain. While it has regrettably resulted in layoffs, it has also resulted in line-by-line expense reviews.
One of the first departments to be requested to cut costs is the marketing department. At most companies, regardless of the state of the economy, it is an annual or semi-annual activity, based on my own experience throughout the course of my career.
When those situations arise, my go-to reference point is the tried-and-true ROI metric. Simply simply, does “x” provide a profit that justifies the cost? If so, perhaps nothing that defines “x” is affected. If not, it naturally disappears.
PROVEN, CONSISTENT ROI FROM EMAIL
Email is cost-effective in these times—and, to be honest, at any time. When you look into the return on investment of email marketing, you’ll frequently find statistics showing that it generates between $35 and $40 for every $1 invested. If you dig a bit more, you’ll discover that this return appears to be constant independent of the state of the economy.
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.
Even though none of the aforementioned facts is brand-new, 2023 budgets will be in the spotlight, so when the inevitable expense review occurs, remember to include email firmly in your plans. When it comes to your digital marketing channels, it’s your best bet. It has numerous use cases, is a 1:1 communication that is permission-based, and performs well in terms of ROI.
Email should be the foundation of your digital marketing strategy, with additional channels acting as complements to email in order to maximise results. Email cannot, however, be the sole tool in your arsenal.
Email will still be the channel that marketers can count on to deliver results, no matter what 2023 brings.
