How Much Revenue Should Come from Email?

Hey crew,

Let’s talk about revenue generated from your emails. There’s a good chance your email efforts are leaving money on the table.

Today I want to break down this process to help you determine whether or not you have optimized your email process to give you the highest possible ROI in this sales channel.

There are a few different areas you can kickstart to drive up the amount of revenue generated in this area of your business.

Look at the Percentage of Total Business Revenue. 

At BlueStout, the overall benchmark metric we tend to look at when assessing email marketing efforts is the percentage of total business revenue generated through email efforts.

The healthy range lies between 25-35%. Obviously this will fluctuate depending on how much you are spending on advertising, etc. (i.e. if you double your ad spend in one day then of course you’ll see the percentage from email drop. It’s important to look at this in the aggregate).

If your brand is doing well under 25% you have a significant opportunity to grow in driving revenue from email. And if you haven’t been doing a lot on the performance marketing side and are seeing 25-30% it’s possible that you could get close to 40% just by dialing in the components we’re going to discuss in a moment.

Some of our clients do upwards of 40-45%, which is crazy!

The increase percentage will vary from brand to brand, but utilizing this framework has tremendous potential to increase the effectiveness of your email efforts.

Look at the Split.

After determining how much of your total business revenue is coming from your email efforts, then it’s important to look at the split of revenue generated between campaigns and flows – emails fired automatically based on customer triggers (i.e. signing up for your email list, first and second purchase, abandoned browsing or cart, etc.).

Ideally, we like to see a fairly even split of 50/50 or 60/40 between the two email sources. If you’re looking at your metrics and seeing a drastic imbalance between campaigns and flows, you most likely have a lot of opportunity to optimize and drive more revenue through email.

Look at Open Rates.

Let’s face it. At the end of the day, if no one is opening your emails or engaging with them, no one is going to buy anything.

There are a lot of factors that influence email engagement from a general standpoint, and then looking more specifically at the components of your target demographic. However, if you’re seeing open rates below 20% consistently on your campaigns and/or 30% of your flows, there is definitely room for improvement.

Low open rates on campaigns is a fairly good indicator that you aren’t doing a good job segmenting your audience. When you send too much mail to too many people, or the actual content of those campaigns is poorly structured, you’re going to be sent straight to spam.

My Email Efforts Can Use Some Improvement – Where Do I Start? 

If you’re looking at your metrics and realizing that you are definitely under the bar, where do you start? Generally speaking, sending more email is better. More email should mean more engagement, action, product exposure, and eventually more purchases. However, it’s important to build out automations and campaigns in an optimized way.

  • Automations and Flows 

This is the very first place you should start when working to optimize your email efforts. The flows should be the highest performing of any email.

Why? Simple. These emails are being triggered based on actions your customer is taking. These emails should be the most profitable for your store.

Make sure you have built out all of the flows you need to cover the entire customer journey.

  • Campaigns 

Next, focus your efforts on dialing in your campaigns. The only way to truly optimize your campaigns is with really robust segmentations. Spend time segmenting your list into engagement tiers. This enables you to know exactly what to send to specific people on your list based on where they are in the buying process with you.

How many campaigns are you setting? On average, we recommend at least 8-12 campaigns per month (for some brands this can be higher).

How many segmentations do you have? At the bare minimum you should have 5 different segmentations of your list. At times, this could extend to 10-20. This will allow you to send more emails while maintaining high open rates and conversion.

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