What Is Email Marketing ROI and How Do You Calculate It?
Email consistently delivers the highest ROI of any marketing channel. Learn how to calculate it and benchmark your performance.
Key Takeaways
- Email marketing averages £36-42 return for every £1 spent — highest of any channel
- Email ROI = (revenue from email minus email cost) divided by email cost
- Open rate, click rate, and revenue per email are the key performance metrics
- Automation sequences (welcome, abandonment, post-purchase) drive the majority of email revenue
Why email delivers the highest ROI
Email marketing consistently delivers the highest return on investment of any digital marketing channel. Industry studies put the average at £36-42 for every £1 spent. The reason is structural: your email list is an owned asset. Every email sent to your list is effectively free (beyond the platform subscription cost), so the incremental revenue from a well-crafted campaign is almost pure margin.
Calculating email ROI
Email ROI = (revenue attributed to email minus total email programme cost) divided by total email programme cost. Revenue attributed to email comes from your email platform's revenue tracking — most major platforms (Klaviyo, Mailchimp, Omnisend) track which orders were placed within a defined attribution window (usually 5-7 days) after an email was opened or clicked.
Key email metrics
Open rate measures what percentage of recipients open the email — a function of subject line quality and sender reputation. Benchmark: 20-25% for eCommerce. Click-through rate measures the percentage of openers who click a link. Benchmark: 2-4% of delivered emails. Revenue per email measures the average revenue generated each time you send — typically £0.10-0.50 for a well-run eCommerce programme.
Automation is the majority of email revenue
For most eCommerce businesses, automated email sequences (triggered by customer behaviour) outperform broadcast campaigns in both efficiency and revenue contribution. The key sequences are: Welcome series (new subscribers or customers — typically your highest-revenue automation), abandoned cart, browse abandonment, and post-purchase. These four alone can account for 30-50% of total email revenue.
List health is the foundation
A large but unhealthy email list is worse than a small, engaged one. High bounce rates damage sender reputation. Remove unengaged subscribers (no open or click in 90-180 days) after a re-engagement campaign. A list of 10,000 highly engaged subscribers generates more revenue than a list of 50,000 where 40,000 never open.