From the moment the first email went out into the ether sometime in the 1970s, brands have been looking for ways to utilize the medium for marketing purposes. And over the years, email marketing has become not only one of the most popular forms of digital brand-consumer engagement, but also one of the most profitable. The benefits of email marketing stretch far and wide, with many brands discovering that building a subscriber list and sending out personalized, targeted content is fundamental to strengthening their relationships with current and potential customers. 

As you might expect, though, there’s a lot more to it than just typing up a message and pressing send. In order to be successful, a brand needs to be well-versed in email marketing best practices, tools, and techniques, and it certainly doesn’t hurt to invest in email software either.

So, what is email marketing, and how does it work? Here’s what to know, including the key analytics that determine whether a campaign is a win or not. 

What Is Email Marketing?

Let’s kick off with an email marketing definition.

Email marketing is a form of digital advertising that entails sending direct, usually promotionally driven emails to the inboxes of subscribers. Various examples include product launch messages, deals and coupons, sale announcements, welcome emails for new subscribers, abandoned cart emails, and informational emails, such as those that help customers set up a newly purchased product or service.

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Welcome messages promote instant engagement with new subscribers and have the highest open rates of all types of marketing emails.

People are busy, so effective email marketing requires cutting through the noise of a cluttered inbox. That’s accomplished in a few different ways, each of which is important in its own right for running a successful campaign:

  • Opt-in Subscriptions: Brands should only contact subscribers who have voluntarily opted-in to hearing from them. This ensures an attentive audience and helps keep messages out of the Spam box. It’s also required by law under the General Data Protection Regulation (GDPR).
  • Personalized Messages: Generic messages don’t tend to get a positive response. To make stronger connections, brands should be sending personalized messages based on an individual’s behaviors, history, and location in the sales funnel.
  • Calls to Action: There’s more to email marketing than just staying top of mind, which is why every email that a brand sends should include a clear call to action. This gives the message purpose and outlines what next step constitutes successful outreach.

When it’s done right, email marketing has the power to do more than just promote products and services. Optimizing the email marketing funnel—and the content behind it—can turn leads into customers and customers into a business’s most vocal fans. It can also help create a community of engaged and active brand followers.

Why Email Marketing Is Important

Is email marketing effective in 2021? You bet. Despite 50+ years of use, email is far from dated when it comes to its marketing utility. On the contrary, there’s a wide range of email marketing benefits, each of which speaks to the continued importance of including emails in a comprehensive marketing strategy.

More than half of the world’s population (four billion people) uses email, and that number is expected to jump by another half a billion by 2024. For marketers that want to reach as many people as possible, email provides a way to do just that. And unlike social media or blog posts, it’s a lot easier to get your message directly in front of its intended recipient. It’s also easier to track if they see it and what they do next.

To further understand why email marketing is so important, it helps to look at its unique benefits. Below, we’ve outlined what some of these benefits are, plus some interesting email marketing statistics.

Email Marketing Benefits

Four out of five marketers say that, if they had to choose, they’d sooner give up social media than email marketing.

The benefits of email marketing go beyond a high ROI (though at $36 for every $1 spent, that’s a pretty big benefit right there). Marketers who excel with their email marketing campaigns see a lot of positive outcomes, with plenty of incentive to continue making emails a high-priority digital endeavor.

Here are some of the biggest reasons why email marketing is worth the investment for brands.

It Boosts Sales

People don’t give away their contact information to just anyone. By opting in to receiving emails, a subscriber is saying that they’re interested in what a business is doing and selling—a statement that indicates they’re already at least somewhat willing to make a purchase. And according to the stats, 60% of consumers have made a purchase as a result of a marketing email.  

It’s Cost-Effective

An inbox is a valuable place to be. Emails get right in front of a brand’s target audience, and they do so without an upfront ad payment or a pay-per-click setup. Even businesses with a small budget can use emails to their advantage, and many find that the payoff is well worth any money that goes into it.

It’s Easy to Personalize

A smart campaign starts with segmentation—i.e., dividing contacts into lists depending on where they are in the funnel (for example: new customers, potential customers, or customers who have gone MIA). This allows for more personal, more targeted content distribution, and higher open rates as a result.

It’s Versatile

From building brand awareness and incentivizing first purchases to re-engaging with old customers and ensuring a positive post-purchase user experience, emails are well-suited to most business goals. No other digital marketing medium can do quite so much, or do it quite so well.

It’s Trackable

Businesses get a wealth of data with every send that helps clue them in to what’s working and what’s not with their audience. No matter the email marketing KPI (key performance indicator), brands can consistently track their email marketing analytics with very little effort, in turn gaining a ton of insight into what they can do to improve.

Email Marketing Statistics

The numbers don’t lie. If you want to know just how big of a punch email marketing packs, start by checking out some of the stats around it:

  • Total revenue for email marketing around the world is $7.5 billion. By 2027, it’s expected to reach $17.9 billion. (Statista)
  • In 2020, 78% of marketers said that email was important to their overall success. (Litmus)
  • 81% of B2B marketers cite email newsletters as their #1 form of content marketing. (Content Marketing Institute)
  • Among consumers, 61% are happy to receive weekly promotional emails, and 38% would prefer to receive them even more frequently. (Marketing Sherpa)
  • Welcome emails are opened 86% of the time—4x as much as other types of marketing emails and with 10x as many clicks. (Get Response)
  • Email conversion rates are comparable to those from organic and paid search and significantly higher than social media and display ads. (Smart Insights)

How Does Email Marketing Work?

Checking out email marketing examples in your own inbox can give you an idea of what this sort of marketing looks like, but to really understand how it works, it helps to break it down into its component parts.

As the statistics above make clear, emails can be a hugely profitable part of a brand’s digital marketing strategy. Done incorrectly, however, they can also fall completely flat, failing to engage, convert, or even reach their intended recipients.

How do you ensure emails are a win, then? With these five key steps to implementing a successful campaign.

Step 1: Building an Email Marketing Funnel

Most marketers are familiar with the sales funnel—a journey that a customer takes from prospect to lead to purchaser to brand loyalist. The funnel is much the same but applied directly to email marketing. It’s about using email content to guide your subscribers through this journey, strategically serving up the right content at the right time to take an individual from interested would-be purchaser to someone who shouts their love for a brand from the rooftops.  

To create an email marketing funnel, brands should map out the uber-specific journey that their customers take. This provides a blueprint for how to design and integrate the next four steps, as well as for how to craft content that’s ready to convert.

Step 2: Designing an Email Marketing Campaign

A killer email campaign doesn’t happen by accident. It takes a lot of preparation and research, all of which comes together into a campaign with a distinct plan and purpose.

Before disseminating any content, a business needs to know who they’re trying to convert, what conversions they’re trying to achieve, and how they intend to achieve it. This is the outline of the campaign, and sets the tone for all that comes next, from copywriting to analytics. Crucially, all goals of the campaign need to be measurable so that it’s easy to know what success looks like.

Step 3: Sending Out Email Promotions

Here’s where content comes into play. Email promotions run the gamut from special offers to event invites to sale announcements, and they all have one overarching goal: to drive more revenue.

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This promotional email from Birchbox went out in early November 2020, just in time for customers to start crossing gifts off their list.

Promotional emails tend to not be too text-heavy. Rather, they give just enough information to pique interest and then lead readers to an on-site landing page. A brand may promote a sale and include a handful of product recommendations to give subscribers a taste of what they would find if they clicked through, then let the intrigue of the promotion itself do the rest of the work.

Step 4: Growing Email Marketing Lists

Lists are the backbone of any campaign. And it makes sense, since a brand can’t convert people if they have no one to send their messages to.

In terms of what makes a good list, it comes down to numbers (the more people who are subscribed, the more potential for conversions) and segmentation (dividing subscribers into sub-lists based on where they are in the funnel).

As previously mentioned, opt-ins are critical. Brands that message people who haven’t agreed to hear from them are viewed as pushy. They’re also violating both etiquette and the rules set out by certain regulatory agencies.

Step 5: Using Email Software

A savvy email marketer knows that it’s better to work smarter, not harder—and that’s where email software comes in. Software takes a lot of the guesswork out of building templates, segmenting lists, and tracking key email marketing metrics. It can also be used to automate sends. For example: automatically sending a “Did you forget something?” email to someone who abandoned their online shopping cart.

All of these benefits have made email software a standard in the industry. Today, 85% of B2B marketers use it, and automated email campaigns are among the top three tactics that marketers use to improve performance.

Email Marketing Metrics That Matter

Tracking the right metrics is key. And while having a high email marketing ROI is obviously a big one, it’s far from being the only one that’s important.

All brands will have unique goals and benchmarks, but there are a number of indicators that most rely on when determining whether a campaign was successful or not. Here are some of the major metrics that make the list.

6 Email Marketing KPIs to Track

  1. Open Rate: The number of emails opened divided by the number of emails that were sent.
  2. Conversion Rate: The number of recipients who followed through on the call to action divided by the number of emails that were sent.
  3. Bounce Rate: The number of emails that bounced (got marked “return to sender”) divided by the number of emails that were sent.
  4. Clickthrough Rate: The number of recipients who clicked on a link in the email divided by the number of emails that were sent.
  5. Email List Growth: New subscribers minus unsubscribers divided by total number of subscribers for a set period of time.
  6. Email Unsubscribe Rate: The number of recipients who clicked the unsubscribe button divided by the number of emails that were delivered into inboxes.

Getting Started With Email Marketing

Everyone has to start somewhere. If you’re new to the game, first establish what your initial goals are and take steps toward growing your contact list. Resist the urge to purchase address lists, since in addition to providing you with low-quality, unlikely-to-convert leads, these can also contain spam traps: invalid email addresses that lure senders and get them flagged (and often banned) by email servers.

Once you’ve got a reason to send emails and people to send them to, you can get to work on content creation. An email newsletter or a promotion are both good starting points. Create your campaign and send your messages, then look to your metrics to find out how well you performed.

Over time, you can add more complexity to your campaigns, including list segmentation and automation software. Don’t feel like you need to do everything at once, but do stay up to date on marketing trends and best practices. As with any marketing tactic, the rules of engagement are always changing, and it’ll be your job to stay on top of them so you can make the biggest impact possible with each email you send out. 

Written by:

Laura Mueller