Okay, Mighty Mouse. Get your cape out and get out there. Show them…your marketing group…how to save the day. How, single-handedly, they can rescue their company from old-fashioned marketing techniques that are draining the company coffers and not producing a demonstrable ROI. Show them how they can pay less, risk less, measure better, and profit more…by committing more of their budget to email marketing.
This, Mighty Mouse, I can assume, is your pitch?
Ladies and gentlemen of the marketing team, before you look at how to budget for email marketing, you probably want to fully grasp why you should budget for it.
Especially right now. Hello…there’s a recession going on.
Which…is exactly why you should budget…more…for email marketing. Whether you have a $100,000 marketing budget, or a $10,000 marketing budget, putting a good chunk of your available dollars into email marketing makes better sense now than it ever has.
Are you…or your organizational hierarchy…having problems moving away from traditional marketing methods…direct mail, trade shows, flyers, and the other old ways of getting more customers, or getting your current customers to buy more? If so, consider a few facts:
- Fact #1: Forrester Research, an independent market and research company founded in 1983, projects that “e-commerce sales in the U.S. will keep growing at a 10 percent compound annual growth rate through 2014.” It forecasts “online retail sales in the U.S. will be nearly $250 billion, up from $155 billion in 2009. Last year, online retail sales were up 11 percent, compared to 2.5 percent for all retail sales.”
- Fact #2: Email marketing is a very cost-effective way to build relationships and increase sales. The cost of sending emails is very low. There are marketing service plans available for $20-$25 a month. Using a template, on average it will probably take about 5 hours to put together a newsletter, banner and/or ad. At $20 an hour, that’s what…$100. At $50 an hour, you’ve spent $250. Let’s say you have 2500 email subscribers…or potential email subscribers in your customer base. You’ve just created a new product line and you’re ready to launch. Using email, you’ll pay between 5 and 11 cents to deliver your advertisement. Now, a quick calculation for direct mail. First class postage alone… $1100, plus the $100 to $250 to write and design the advertisement using a template, plus paper and printing…and stuffing the envelopes…minimum 60 to 75 cents. Which genius in the marketing department wants to describe the most cost-effective advertisement? Even if you use bulk mail and post cards, the cost/benefit analysis strongly favors email delivery.
- Fact #3: Email results are visible…quickly. That $20 to $25 a month you pay for marketing services also includes the statistics that show you how successful your campaign is…open rate, click through rate, purchase results, and more. You can test variable components and make adjustments…quickly. No reprints, 2nd mailing or any of the other costs associated with a direct mail campaign not working according to plan.
So, now that you know why you should budget for email marketing, the how to budget for it really isn’t that difficult, is it?
In fact, after you reallocate enough marketing dollars to launch a long-term, well-designed email campaign, you may have enough left over to stock up on the extra inventory you’ll be needing.
Mighty Mouse, signing off here…heading out to rescue another marketing disaster in the making.