The email marketing world is huge! It is worth roughly around 7.5 billion dollars worldwide according to Statista. So the question is, how much will email marketing cost your marketing budget?
The simple answer is: it depends on your company goals and how much are you willing to do yourself!
It can be free or it can cost you and your team tens of thousands of dollars each month.
BUT…
If you want to expand your outreach to thousands of people with a team of marketing or sales reps, there are a few extensions and CRMs that you can use. With these, you will be able to engage customers, drive sales, and nurture leads.
In this article, we’ll break down the different cost components associated with email marketing and provide insights to help you budget effectively.
Understanding Email Marketing Costs
The cost of email marketing can vary significantly depending on several factors. These include the size of your email list, the complexity of your campaigns, and the tools you use.
To get a clearer picture, let’s explore the main cost components associated with email marketing.
Cost Components of Email Marketing
Email Marketing Software
One of the primary expenses in email marketing is the software or platform you choose. Pricing models for email marketing tools typically fall into a few categories:
- Subscription-Based: Most platforms charge a monthly or yearly fee based on the number of subscribers or emails sent. For example, Mailchimp offers pricing tiers starting from free for small lists to over $300 per month for larger lists with advanced features.
- Pay-As-You-Go: Some services, like Sendinblue, offer a pay-as-you-go model where you pay based on the number of emails sent, which can be more cost-effective for businesses with fluctuating email volumes.
- Tiered Pricing: Platforms often have different tiers based on features and support levels. For instance, Constant Contact’s pricing starts around $12 per month for basic features and increases with advanced capabilities.
Example Pricing
- Small Business: $10 – $50 per month for basic plans.
- Medium Business: $50 – $150 per month for mid-tier plans.
- Large Business: $150 – $500+ per month for advanced features and large lists.
Design and Content Creation
Creating engaging email content is crucial for success but can also add to your costs. When we don’t just want text over your email, but attractive custom templates that focus on visuals, there will be additional costs.
- Templates vs. Custom Design: Many platforms provide pre-made templates at no additional cost. However, if you opt for custom designs, you might need to hire a graphic designer, which can range from $50 to $500 per email, depending on complexity.
- Copywriting: Crafting compelling email copy might require professional writers. Freelance copywriters typically charge between $50 to $150 per email, though rates can vary based on experience and project scope.
List Management
Managing and maintaining your email list is another cost factor:
- Data Segmentation: Advanced segmentation features, which allow you to target specific groups within your list, may come with additional costs, especially on higher-tier pricing plans.
- List Cleaning: Regularly updating and cleaning your list to remove inactive or incorrect email addresses is essential for maintaining deliverability and can be a part of your software package or an additional expense with third-party services.
Automation and Analytics
Automation and analytics help optimize your email marketing efforts but come with their own set of costs:
- Automation Tools: Setting up automated email sequences (like welcome emails or drip campaigns) can incur additional costs, particularly if using advanced features or third-party integrations.
- Analytics and Reporting: Access to detailed analytics and reporting might be included in higher-tier plans or could require additional purchases. Advanced analytics tools can range from $20 to $100 per month.
Hidden Costs of Email Marketing
Compliance Costs
Adhering to regulations such as GDPR and CAN-SPAM is crucial:
- Regulatory Compliance: Ensuring compliance with email marketing regulations can involve legal fees or specialized tools. Costs here can vary widely but expect to spend anywhere from $100 to $1,000 annually depending on your needs and the size of your business.
Testing and Optimization
Ongoing testing and optimization can enhance performance but may add to your budget:
- A/B Testing: Running A/B tests to refine subject lines, content, and send times may involve additional software or higher-tier platform features. This can cost anywhere from $20 to $100 per month.
- Performance Monitoring: Advanced performance monitoring tools may be necessary to track and improve campaign effectiveness, potentially adding $50 to $200 per month to your expenses.
Training and Support
Investing in training and support can ensure you get the most out of your email marketing efforts:
- Training Resources: Courses or training sessions for your team can cost between $100 to $500 depending on the depth of the training.
- Customer Support: Premium support options from your email marketing platform may be available for an additional fee, ranging from $10 to $100 per month.
ROI and Budgeting for Email Marketing
Estimating ROI
While email marketing can involve various costs, it also offers substantial potential returns:
- Potential Returns: Effective email marketing campaigns can lead to increased sales, customer engagement, and brand loyalty. According to the Data & Marketing Association, the average ROI for email marketing is $42 for every $1 spent.
- Case Studies: Many businesses have seen significant returns from email marketing. For example, a retail company increased its revenue by 30% through targeted email campaigns.
Budgeting Tips
To make the most of your email marketing budget:
- Setting a Budget: Assess your business size and goals to set a realistic budget. Small businesses might start with $200 – $500 per month, while larger companies may invest $1,000 or more. Always assess your leads, MQLS or SQLs and see if your email marketing strategy drives sales or positive returns at the end of each month.
- Maximizing Your Budget: Focus on high-impact areas like segmentation and automation to get the best results for your investment. Regularly review and adjust your strategy based on performance metrics. For example, use UTM tags to see the open rate of the URLs you place within each email.
Additional Resources for Email Marketing
Here’s a quick breakdown of all the main email CRMs that you can use.
Conclusion
Email marketing costs can vary based on several factors. We can say that it could cost you $0 to a maximum of $10000 per month for CRMs, design, hosting, automation, outreach specialists of freelancers, compliance, and additional costs for A/B testing.
Here’s a simplified breakdown:
- Software: $10 – $500+ per month
- Design & Content: $50 – $500 per email
- List Management & Automation: $20 – $300 per month
- Compliance & Additional Services: $100 – $1,500 annually
Estimated Monthly Total
- Small Business: $200 – $700
- Medium Business: $700 – $1,500
- Large Business: $1,500 – $3,000+
These estimates can help you budget effectively and achieve a strong return on investment. But there are many factors involved with targeting the right audience.
