Introduction

Wondering whether this whole email marketing is worth the effort as a time-bound entrepreneur who’s already juggling several things at the same time? This blog post is going to help you compare email marketing to other marketing efforts and understand why so many businesses, new and old, use this as part of their marketing strategy. We will consider various factors that may be important in making your decision.

Benefits Of Email Marketing To Small Businesses

1. Cost Effectiveness

One of the most notable benefits of email marketing is its lower cost when compared to traditional advertising platforms. Email allows you to reach a wide audience without breaking the budget. Many email marketing platforms have modest plans that are ideal for small budgets, making them an accessible alternative for sole proprietors.

How does email marketing compare to traditional marketing in terms of cost?

Traditional marketing is not very bootstrapper-friendly. This is especially true when you compare it to traditional platforms like TV, radio, or print advertising which have a much higher barrier to entry especially for new or small businesses. What’s more, it’s much more difficult to gather data with these traditional marketing options since results are more difficult to measure and feedback isn’t as forthcoming.

Okay, but how do they compare to other online marketing platforms?

Email marketing is one of the most cost-effective digital marketing channels, with an average cost per lead ranging from $0.10 to $0.30, as opposed to other channels such as paid advertising, which may cost upwards of $3 to $5. And with some of the highest average return on investment (as compared to many other alternatives), email marketing offers an attractive way to conduct marketing campaigns.

Helpful Email Marketing Cost Tips

What are some typical costs associated with email marketing?

Email marketing expenses can vary greatly based on many factors, including the size of your email list, the complexity of your campaigns, and whether you prefer to manage your email marketing in-house or outsource it to an agency. Here are some common costs involved with email marketing.

1. Email Marketing Platform Fees

Monthly Subscription Costs: The majority of email marketing platforms charge a monthly cost based on the amount of subscribers.

For example:

Basic Plans: Prices range from $0 to $99 per month for up to 5000 contacts. Mid-Tier Plans: For larger lists (e.g., 10,000 contacts), monthly fees can range between $25 and $155. Enterprise Plans: For extensive lists (50,000+ contacts), rates can soar to approximately $270 or more per month.

2. Agency Services You may already have enough on your plate. You can get an agency or a freelancer to help you with things like email marketing, list building, content creation, or design. While many of these services can be attempted on your own, it’s usually better to get a freelancer or agency just so you can skip the learning curve. But if you have budgetary constraints, then you can do them yourself.

How can businesses calculate their email marketing Return On Investment(ROI)?

To calculate the ROI of an email campaign, businesses use this simple formula:

ROI = Revenue from campaign - Cost of campaign X 100

Cost of Campaign

For example. Let’s assume that a business's email marketing campaign generates $10,000 in revenue. The campaign's entire cost (including software, design, and copywriting) is $1,000.

Using this formula:

ROI = $10,000 - $1,000 X 100

$1,000

= $900

In this scenario, the company saw a 900% ROI, which means they earned $9 for every $1 spent on the email campaign.

2. Direct Communication

Email marketing enables you to contact your target audience directly, giving you a level of access that makes it much easier to build deeper relationships and higher engagement.

Why is email better for direct communication than social media?

Email marketing distinguishes itself from social media in that communications are delivered directly to subscribers' inboxes rather than being filtered by algorithms. Unlike social media platforms, where posts may only reach a tiny percentage of followers due to algorithmic constraints, emails are delivered directly to the recipient's mailbox. This ensures that your communications reach people who have opted to receive them. Studies have shown that email open rates can range between 15% and 25%, substantially higher than the organic reach of social media posts, which can be as low as 2%.

What are the benefits of building a direct relationship with customers via email?

Developing a direct interaction with clients via email promotes trust and loyalty. Consistent communication enables businesses to engage with their target audience regularly, offering relevant information and updates that keep the brand top of mind. This continual involvement fosters a deep connection, making clients feel valued and respected. Research has shown that brands that maintain consistent email communication experience higher customer retention and loyalty, as loyal customers are more likely to make repeat purchases and refer the brand to others. Tailored emails that address clients by name and target their interests have been shown to increase your customer’s responsiveness even more. It’s the difference between calling a person by their name versus calling them by a generic “Hey!”. This level of customization supports long-term connection with your customers because they feel like you’re talking to them personally. As a result, this strategy may potentially increase the customer lifetime value (CLV).

3. Targeted Messaging

One of the key reasons why entrepreneurs love email marketing is how highly targeted and deeply specific you can get even on a large scale. For most email marketing alternatives, you may be able to curate your messages and manage them when your client or lead list is small, but it gets stressful as your list grows in size and complexity. But with email marketing, It’s easy to send highly targeted and individualized messages that appeal to each subscriber group. Statistic: Personalized emails can generate six times more transactions than non-personalized ones. Segmenting your audience enables more relevant messaging, which can drastically increase engagement and conversion rates.

4. Measurable Results

Email marketing solutions offer its users the ability to track the performance of your campaigns. With critical metrics like open rates, click-through rates, and conversions being tracked, it’s much easier to tweak and optimize your strategy over time. This data-driven method ensures that your email marketing investment pays off. According to HubSpot, 70% of marketers believe email marketing is essential to their overall marketing strategy since it provides extensive information on open rates, click-through rates, and conversions.

5. Increased Brand Awareness

Brands may increase their industry credibility by giving excellent content and insights via email. This may not only strengthen the brand's authority but also build trust among subscribers. Over time, as customers receive regular and relevant information, they are more likely to know and recall the brand when considering market possibilities. Incorporating email content like newsletters, promotional offers, and educational content can effectively build your brand awareness.

Conclusion

Email marketing is a low-cost, high-return method for direct communication, tailored messaging, measurable outcomes, and improved brand exposure. Solopreneurs and small business owners who understand these major benefits often take advantage of the many upsides of email as a marketing strategy for their business. Stay tuned for the next installment of the series, where we'll look at the many types of email marketing campaigns that can be implemented.