Return on investment (ROI) is a very popular metric because of its versatility and simplicity. Obviously, a positive ROI means an individual or business invested their money wisely and saw a return greater than the original investment. Alternatively, a negative ROI signifies a lower return than the original investment. For certain investments (not necessarily monetary), ROI is very easy to measure; you can see it, feel it, hear it, smell it, or even taste it. But how do you measure ROI for complex business efforts such as email marketing? HubSpot’s marketing automation software makes it pretty easy.
Don’t believe me? Here’s a simple three-step process to help you measure the ROI of your email marketing campaigns with HubSpot.
Step 1: Understand the Investment
The first step is to understand how much the investment actually is. What are the resources allocated to email marketing on a monthly basis? Essentially, this boils down to the monetary value of the amount of time specific employees (or an outsourced agency) are spending towards email marketing. Figuring this out should be fairly simple as long as you know how much they are being compensated and what percentage of their time is focused on email marketing.
Tip: I wouldn’t attempt to include a percentage of your monthly HubSpot cost when tracking email marketing ROI. It’s such a robust platform with an abundance of applications and functionality. The ability to send, monitor, and measure emails is just a scraping the surface of your monthly subscription cost and its associated value.
Step 2: Use the Sources Tool within HubSpot
Next, within your HubSpot portal, go to the Reports tab and select Sources. After opening the Sources application, you will see a graph representing the following sources:
Organic Search – Discover the keywords and search engines that are bringing visitors to your site. Note that Google now encrypts most of their searches; if a keyword is not provided then you will see the term 'Unknown Keywords SSL.'
Referrals – See which external sites are sending the most traffic to your site through inbound links.
Social Media – Find out which social media sites are generating visits to your site.
Email Marketing – See which email campaigns and messages received the most clicks resulting in visits your site.
Paid Search – Find out how well your paid search ads are performing through the amount of traffic generated by ad clicks.
Direct Traffic – Determine how much traffic is generated by visiting your website directly (or with no referral source).
Other Campaigns – See which marketing campaigns (as defined by tracking URLs) are bringing visits to your site.
Obviously, for this particular scenario, you’ll want to pay close attention to Email Marketing as a source for visits, contacts, and customers. Using this tool, you are able to see the amount of visits, contacts, and customers as well as the conversion rates of visits-to-contacts and contacts-to-customers. You can set a custom date range to only show data from the last year, month, week, etc.
To understand revenue, all you need to do is examine the customers from Email Marketing within your custom date range and sum up the amount of revenue generated from each of these customers. If you click the number (it will be highlighted in blue) of customers from Email Marketing in the Sources report, you will be directed to a new page with all of those customers and links to their individual contact records.
Step 3: Compare Revenue (Return) to the Investment
A third grader could handle the third and final step with ease. Take the amount of revenue generated from email marketing customers within your custom date range and subtract the determined monetary value assigned to a specific employee’s or employees’ (or outsourced agency) amount of time spent on email marketing during that same custom date range. There you have it!
Takeaway and Other Tips
“Email Marketing ROI: Measure with Ease Using HubSpot” was the title of this blog. I bet you didn’t think it was as easy as the three steps I shared above. I kid you not; it truly is.
Keep in mind that it isn’t the purpose of all emails to generate sales on their own. Emails can be used to distribute customer surveys, nurture leads after they’ve downloaded a resource or visited your store, or encourage leads to pick up the phone and call one of your sales reps. Moreover, there may be many customers who are recorded under a source such as Direct Traffic or Social Media who received email communications that brought them closer to the bottom of the sales funnel. Therefore, even if your email ROI isn’t in the black, it doesn’t necessarily mean your email marketing isn’t working.
Take a look at some of these tips to help you further determine the ROI of your email marketing efforts and continue to improve the success of your emails:
Check out customers coming from other sources by opening their contact records and seeing if they received any email communication during their buyer journey. You may be surprised!
When on the Sources application, click the blue “Email Marketing” link to get a glimpse of the performance of your email campaigns and specific emails within those campaigns.
Visit the “Trend and Suggestions” link on the right side of the Sources page to see some of the recent trends in Email Marketing, Organic Search, Paid Search, Social Media, etc.
There is always room for improvement with email marketing. Analyze the data HubSpot provides you to make strategic revisions and continue increasing that ever-so-sought-after ROI.