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Maximizing Email ROI Means Repeat Business

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According to a recent report by the Direct Marketing Association, marketers can expect an estimated $48.29 ROI for every dollar spent on email marketing. The report also indicates that email marketing ROI is higher than other forms of marketing – including paid search, search engine optimization, direct mail, and affiliate marketing.

However, don’t be too quick to abandon all your online marketing efforts in favor of email. Email is capable of high returns – no doubt – but superior email marketing performance usually happens when email is sent after initial customer acquisition to build a steady stream of repeat business.

Repeat customers are a lot more profitable than first time buyers (6-7 times more profitable, according to the Harvard Business Review). Repeat customers have already learned enough about your business to feel comfortable spending money, and therefore you need fewer marketing impressions to elicit action. These customers are also easier to target with specific messages focused on their interests and behaviors related to the buying cycle. Targeted messaging increases conversion rates because consumers are more likely to respond to personalized marketing messages.

Here are some other ways you can use email marketing to gain repeat business and higher ROI:

  • Collect an email addresses from every customer. Put an email list signup link on every page of your website, put a guestbook in your store or office, and collect email addresses from customers when they check out. Make sure you obtain explicit permission along with every email address so you’re compliant with the CAN-SPAM act.
  • Divide your email list by interest. For example, group your customers by product line, the incentives they respond to, or buying behavior so you can send more targeted messages.
  • Ask your customers for referrals. Referrals don’t need as many marketing impressions to elicit action, and email is easy to forward. Make sure your email content is valuable enough to forward.
  • Cut down on the content. Loyal customers don’t need as much information to make a purchase as your prospects do. To avoid over-communicating, keep your content focused on generating enough interest to drive people closer to a purchase decision.
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