Is Email Dead? The Economics of Ecommerce Email Marketing

ecommerce email marketing

There are many reasons stores should send email: to build stronger relationships with customers, to highlight new products, to stay top of mind, to make customers happy.

But there’s also the obvious reason: to get customers to return to their store and make a purchase.

The goal of this post is to quantify the value of email marketing for Ecommerce stores so they can benchmark themselves and to help stores who aren’t doing email marketing now understand how value it is.

A Quick Overview of Ecommerce Email Marketing

At Klaviyo, we break Ecommerce email marketing into two buckets:

  • Newsletters: Monthly, weekly or daily emails that are scheduled to go out to a list of customers.
  • Triggered emails (or Flows): Abandoned carts, welcome series, post-order follow-ups, cross-sell emails. Essentially any email that goes out to a customer based on what they have and haven’t done.

To take a look at each, we took a look at a sample of the 10’s of millions of Ecommerce emails that we send. Because Klaviyo is plugged into stores via their Shopify, Magento, Bigcommerce or custom Ecommerce platforms, every email sent is automatically tied back to whether a purchase was made (and whether the recipient had opened or clicked it beforehand).

The Impact of Ecommerce Newsletters

We found that the average newsletter made $0.18 per email sent.  Within that range though, we found tremendous variation:

ecommerce email marketing (2)

60% of emails made just less than $0.10 per email, while 3% of campaigns made $1-2 per email sent.

With any newsletter campaign, there are lots of reason it might work better or worse: timing, whether it includes a promotion or sale, whether it’s a big new product launch, whether it had great content, the price point of the items featured.

Within results, we saw that campaigns could vary significantly week to week for an individual store; however, we did see that stores that were great at email had consistently great performing campaigns.

The take-aways:

  • It should also help you get a sense for how valuable it is to think of ways to grow your newsletter
  • If you are, it should give you a sense of how you compare.
  • If you aren’t sending campaigns, this should give you a good sense of how valuable they could potentially be.

This doesn’t mean that you should just email your customers more. We’ve clearly seen that if you don’t consistently provide content your recipients love, they will abandon you (which is a topic we’ll cover in a later post).

The Impact of Abandoned carts

The typical abandoned cart email goes out a few hours to a few days after a customer starts a checkout but doesn’t complete it.  As Dan Wang mentioned on the Shopify blog a few weeks ago, nearly 70% of carts get abandoned.

When using email to recover abandoned carts, we saw an average of ~$12 recovered per checkout abandoned. Again, the variation was tremendous:

ecommerce email marketing (dollars recovered)

While most stores recovered just under $10 for each abandoned checkout using email, 5% of stores were able to recover an average of ~$30 per abandoned cart. One very surprising finding: for 5% of stores the emails made almost nothing.

Our conclusion: every store should consider trying cart abandonment emails. While some stores worry about bothering customers, by striking a helpful tone, focusing on making your brand shine through in the email, and sounding like a human, you can give your customers a great email to bring them back.

If your results aren’t as good as others, a few ideas:

  • A/B test your content – particularly to try a simple and more personalized message or different subject lines.
  • Try sending different numbers of emails (1 vs 2)
  • Experiment with different lengths of time after checkout was abandoned
  • Consider segmenting your abandoned cart emails with different content for first-time buyers vs those who have bought before

The Impact of Sending Win-back Follow-ups to Lapsed Customers

One of the most effective emails we’ve seen our customers send is the “win-back” email specifically targeted at bringing back customers who have bought before but not recently.

More than other emails, we see way more variation in what these emails look like, whether they include discounts, whether they go out after a month or after 6 months.  While we didn’t collect data on win-backs in this sample, we’ve previously seen win-back emails drive $9 in impact per email sent.

If you haven’t started sending win-backs, try starting with a short personal email 90 days after someone purchases encouraging them to come back and potentially offering a discount.

Welcome Series, Cross-Sell, Product Reviews, etc

In addition to newsletters, abandoned carts and win-backs, there are a whole series of other emails that Ecommerce stores send that drive significant purchases. We didn’t quantify their impact as part of this sample, but we’ll revisit them going forward. Either way, the point is that the economics of the emails we’ve looked at shouldn’t fully address all of the eonomics of your email marketing programs.

Estimating the Impact of Ecommerce Email

Our goal in doing this analysis was to give Ecommerce stores the information they need to evaluate how important email marketing is to them.

Based on size, number of checkouts, customers, etc, you should be able to do some back of the envelope math to get a rough idea of the impact of email marketing on your store – and you’ll generally find that this potential impact is too big to ignore.

It’s easy to see how a 5,000 person newsletter list leads to $50,000 in sales in a year (with 2 emails a week for 52 week,  $0.20 per email per person, etc) – and more when you add on win-backs, abandoned carts and many of the other emails like welcome series and cross-sell offers we didn’t discuss.

Email marketing is certainly not a dead channel for email marketing – in fact, it’s hard to find a more vibrant area of innovation and growth. There is a lot of need for better emails (and spammers have given email a bad name), but the reality is that it’s still a great way to reach customers that can be good for everyone.

Recipes for Linking Analytics to Decisions: A New Approach

A survey that changed a product overnight & other tales of data-m…

4 top converting welcome emails (with the data to prove it)

.yuzo_related_post img{width:260px !important; height:250px !important;}
.yuzo_related_post .relatedthumb{line-height:16px;background: !important;color:!important;}
.yuzo_related_post .relatedthumb:hover{background:#ffffff !important; -webkit-transition: background 0.2s linear; -moz-transition: background 0.2s linear; -o-transition: background 0.2s linear; transition: background 0.2s linear;;color:!important;}
.yuzo_related_post .relatedthumb a{color:#323b43!important;}
.yuzo_related_post .relatedthumb a:hover{ color:}!important;}
.yuzo_related_post .relatedthumb:hover a{ color:!important;}
.yuzo_related_post .yuzo_text {color:!important;}
.yuzo_related_post .relatedthumb:hover .yuzo_text {color:!important;}
.yuzo_related_post .relatedthumb{ margin: 0px 0px 0px 0px; padding: 5px 5px 5px 5px; }

jQuery(document).ready(function( $ ){
//jQuery(‘.yuzo_related_post’).equalizer({ overflow : ‘relatedthumb’ });
jQuery(‘.yuzo_related_post .yuzo_wraps’).equalizer({ columns : ‘> div’ });

Back to Blog Home
Get email marketing insights delivered straight to your inbox.