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Launch Your Online Business in Just 7 Days

With around 59% of customers stating that emails affect their purchasing decisions, you can’t afford not to invest in email marketing.


But just how big does your email marketing budget need to be?


In this post, we’ll take a look at how to calculate the cost of your email marketing, so you know what to expect when you launch your campaign.


Let’s get started!

1. What is email marketing?

If you’re considering the cost of running an online marketing campaign, odds are, you know what email marketing is, so we’ll keep this brief.


Email marketing is a digital marketing strategy that consists of sending emails to potential customers, or leads, to build a relationship with them.


The idea is to use emails to add leads to your sales funnel and turn each lead into a paying customer.


But is email marketing effective?


The short answer is yes, it’s very effective!


Around 4,6 billion people are expected to be using email by 2025, and 51% of shoppers prefer to shop online, so a well-thought-out email marketing campaign can be very profitable.


The average return on investment (ROI) for email marketing is around $42 for every $1 spent.


Consumers are more likely to buy from a company that sends personalized and relevant emails — in fact, your revenue can increase up to 760%.


Considering these statistics, email marketing is worth every cent!

2. What is the cost of email marketing

Email marketing cost

Email marketing cost is determined by several factors.


Let’s consider each of them in detail, so you know what it is you’ll be paying for.

2.1. Email service provider

To run successful email campaigns, you’ll need an email service provider (ESP).


An ESP is a service that allows email marketers to easily send email blasts to their subscribers.


Most email providers, like Gmail, have safeguards in place to detect, and protect, their users from unwanted spam.


Spam can be anything from annoying to malicious, and a credible ESP will help you make sure that your campaign doesn’t violate any regulations.


Ensure that you are compliant with the GDPR and CAN-SPAM act so that you don’t get flagged or, worse, fined!


Always get a lead’s consent before sending them marketing emails — building a good sender reputation with both customers and their email providers will improve your delivery rate.


More delivered emails mean a bigger chance of converting a lead into a customer!


Most email marketing platforms today include an ESP in their package, so when you start looking for business software, find an all-in-one platform, like systeme.io, that offers email marketing services.

2.1.1. Using Gmail

Before we continue, let’s answer the obvious question — why not use Gmail? After all, it’s free.


Gmail is aimed at individual accounts, so it’s not a marketing platform.


According to Gmail regulations, you’re limited to 500 emails in a single 24-hour period.


On top of that, deliverability rates with Gmail aren't guaranteed.


If you send a mass email blast from a personal email address, your mail runs the risk of being identified as spam.


The last place you want your email to end up in is the spam folder!

2.1.2. GMass

Send mass and cold emails with GMass

Send mass and cold emails with GMass

If you’re willing to pay a subscription fee, you can look at GMass.


GMass is a Chrome extension that you can use to turn your Gmail account into an ESP for your business.


It offers some basic functionality, such as:

  • Add unsubscribe options to your emails
  • Integrations with Google Sheets, allowing you to import email addresses
  • Automated follow-up emails
  • Email analytics that provide insight into open rates
  • A/B testing

However, the pricing starts at $12.95/month.


That might not sound like much, but it doesn’t offer any marketing tools, so you’d be paying that on top of the business platform you’re using.


If you’re just starting out, and you have a very small email list, you can use Gmail.


It’s technically free, but the time you’ll be spending on curating your list and the risk of your emails being marked as spam could end up costing you down the road.

2.1.3. Dedicated ESPs

With Gmail out of the way, let’s take a look at dedicated ESPs.


Most ESPs will charge you a monthly subscription fee based on the number of contacts you have on your email list or the number of emails you send.


Take careful note of this — some ESPs, like Mailchimp, will charge you per contact, even when they unsubscribe from your email list.


You could end up paying for inactive subscribers that no longer receive any marketing emails.


When choosing an ESP, you should also consider what additional features they offer.


At the very least, you need:

  • A/B testing to see what email content and subject lines work best
  • A variety of templates
  • Responsive emails that work on mobile devices
  • Analytics to keep track of open rates, bounced emails, and delivery rates
  • Unsubscribe options
  • A scalable pricing plan that grows with your business

2.2. Graphics

While text-based emails work, 67% of users state that they prefer image-based emails.


When it comes to adding graphics to your emails, you have 2 options.


You can use a graphic designer, either freelance or in-house, depending on the make-up of your company, or you can do it yourself.


The average rate for a freelance graphic designer in the US is between $24 - $30/hour.


However, you can pay as much as $150/hour.


The rate of the graphic designer is determined by several factors, such as:

  • Experience
  • Location
  • Education and/or certifications
  • Additional skills

Most designers will have an online portfolio, so you can find someone whose style will suit your brand.


Alternatively, you can do it yourself by using templates.


This is another reason why using a dedicated ESP is a good idea, as most come with an existing array of templates you can customize.

2.3. Agency or do-it-yourself

When it comes to designing and running your online campaigns, you have 2 options.


You can either use an email marketing agency, or you can invest in email marketing software and run your own campaign.


This will depend on the size of your company, the number of employees you have, and your employees’ expertise.

2.3.1. What you can expect from an agency

When you work with an agency, you get the complete package.


A good email marketing agency will provide:

  • The ESP
  • A project manager or account manager to manage your campaign
  • Designers
  • Copywriters

Email marketing agencies will take the project from start to finish.


They usually provide a combination of services:

  • Survey your email list, and do market research to see what will appeal to your audience
  • Build a landing page and lead funnel
  • Create ads to add new subscribers to your contact list
  • Create welcome and follow-up emails
  • Set up drip campaigns and automated email sequences
  • Develop content for emails and a weekly newsletter
  • Run split testing and analytics to see how your campaign is performing

If you have the resources, investing in an agency is not a bad option, but it’s expensive!


Agencies usually don’t charge by the hour — getting to know a client and their product takes time, so charging per hour is simply not practical.


Instead, many agencies might charge per project, especially if they’re setting up an automated campaign.


Most commonly, agencies are put on a monthly retainer that can be between $2,500 - $7,500/month.


If you have a large business with complex campaigns, and the resources to do so, investing in an agency is worth considering.

2.3.2. Marketing platforms

If an agency is outside your reach, don’t despair.


With the number of email marketing platforms available, you can run a fairly complex campaign yourself with relative ease.


The pricing will depend on:

  • Whether you’re using a dedicated ESP or an all-in-one platform
  • Which features you want
  • The number of contacts you have
  • The volume of emails you plan to send

You can read our post on the top email marketing platforms, but let’s take a quick look at what you can expect to budget for some of the top platforms.


While systeme.io’s Free plan will give you all the tools you need to run a successful campaign for up to 2,000 contacts, the same isn’t true for other platforms.


So, when you start shopping, expect to pay between $25 - $195/month for 10,000 contacts depending on the email platform and plan you choose.


At systeme.io, we want to see your business succeed, so our plans scale with you as your email list grows.


Start with our Free plan, and build your email list up to 1 million contacts!


Keep reading for an overview of what exactly systeme.io has to offer.

3. How to calculate the cost

How to calculate the cost

So now we’ve looked at all the different elements that make up an email marketing campaign.


But how do you calculate the cost of your email campaign?


Step 1 — Determine the monthly fee of your ESP


Consider what you’ll need from your ESP:

  • How many subscribers do you have on your email list?
  • How many emails will you be sending to each contact?
  • Will you be using email templates or a graphic designer?

Based on this, you can find an ESP that can handle the volume of emails you will be sending and comes with customizable templates (if you so choose).


Step 2 — Determine the cost of the graphics and content


This will be the hourly rate of a graphic designer and/or copywriter if you’re using freelancers.


However, if you’re using an in-house designer or copywriter, or doing it yourself, you’ll need to consider the time spent on designing or customizing templates and writing content.


The time an employee spends on the marketing campaign will be covered in their salary, so consider this as part of your email marketing cost.


Step 3 — Managing the campaign


The time any employee spends on sending emails, running tests, and analyzing analytics to determine effectiveness is time you pay for, so keep this in mind when calculating the cost of your campaign.


To determine your email marketing costs, you need to add the cost of the:

  • ESP monthly subscription
  • Freelance graphic designer and/or copywriters
  • Time employees spend on the campaign

4. Key performance indicators to consider

Your campaign is ready to launch, but what metrics should you consider when it comes to measuring your success?


Let’s take a look at the key performance indicators (KPIs) that’ll give you a clear idea of whether or not your campaign is on the right track.

4.1. Bounce rate

How to calculate the bounce rate

How to calculate the bounce rate

The bounce rate of your emails has to do with the deliverability.


There are 2 types of bounces — a soft bounce and a hard bounce.


A soft bounce occurs when your ESP can’t deliver an email because the recipient’s inbox is full.


A hard bounce is when you send emails to an invalid address.


Hard bounces can affect the cost of a campaign — every email you send will cost you time and money.


A soft bounce might still bring in a sale down the line, but a hard bounce has a 0% chance of succeeding, so it’s time and money wasted.

4.2. Open rate

How to calculate the open rate

How to calculate the open rate

The next important indicator is the open rate.


If your bounce rate is low, and the emails are reaching the inbox, but the open rate is also low, you might need to invest more time in testing your subject lines or consider the days and times you send your mails.


Also, consider content — are you giving your reader something worth their time?

4.3. Click-through rate

How to calculate the click-through rate

How to calculate the click-through rate

The click-through rate (CTR) is a very important indicator to keep an eye on.


If your open rate is average for your industry, but your CTR is low, you need to consider your call-to-action (CTA).


An underwhelming CTA, or the promotion of offers that your lead isn’t interested in, might be the cause of your low CTR.

4.4. Conversion rate

How to calculate the conversion rate

How to calculate the conversion rate

Conversions will show how many of your leads moved through your funnel and reached the final goal of your campaign — whether that was purchasing a product or signing up for a newsletter or event.


Your ultimate goal will be converting leads into paying customers, so make sure your emails give them what they’re looking for.

4.5. Number of unsubscribes

How to calculate the unsubscribe rate

How to calculate the unsubscribe rate

The final indicator to consider is the number of unsubscribes you have.


If a high number of leads are unsubscribing, odds are, you’re not delivering content that they’re interested in.


So, take another look at whether you are targeting their needs and addressing their concerns.


While a large number of unsubscribes is an indication that something is wrong, a small number of unsubscribes is not necessarily something to be concerned about.


Leads who unsubscribe from your email list are no longer interested in your product or service, so the chances of converting them are very low.


Along with being a legal requirement, giving leads the option to unsubscribe means you won’t be spending resources on leads that have little chance of becoming customers.

5. Email marketing services

There are a lot of marketing services available today — from true all-in-one platforms to basic platforms that allow for sending emails but little else.


However, for the best platform to run your email marketing, look no further than systeme.io!

5.1. Run your campaign with systeme.io

systeme.io logo

systeme.io logo

Systeme.io is more than just an email marketing platform. It’s an all-in-one marketing tool that’ll help you with every aspect of your business.


With systeme.io, you can have up to 2,000 contacts and send unlimited emails, for free.


When it comes to email marketing, systeme.io provides:

  • Email templates to help you create and customize your email campaigns
  • Landing page templates for marketing campaigns
  • A website builder to launch your business
  • Opt-in forms and pop-up templates to grow your email list
  • Unlimited emails, so you can send as many emails as you need
  • Automated email sequences that do the manual work for you
  • Business analytics to help you keep track of how well your campaign is doing

With systeme.io, you’re not only limited to email marketing, you can also:

  • Build a website for your business
  • Run a blog to deliver relevant content to your leads
  • Run an affiliate program to get more eyes on your products
  • Create an online store to sell your products
  • Build sales funnels
  • Offer evergreen webinars, and create online courses

5.1.1. Systeme.io’s pricing

systeme.io’s pricing plans

systeme.io’s pricing plans

Systeme.io offers a Free plan, as well as 3 paid plans.


The Free plan is free forever, and no credit card details are required.


You can pay per month, but if you pay annually, you’ll save 30%.


With every systeme.io plan, you get access to the following features:

  • Unlimited number of emails
  • Unlimited file storage space
  • Unlimited membership site members
  • No transaction fees
  • Affiliate programs
  • 24/7 online support

With the Freemium plan, you also get access to:

  • 3 sales funnels and 10 funnels steps
  • 1 blog with unlimited blog posts
  • 1 membership site/online course
  • 1 automation rule, workflow, and tag
  • 1 email campaign
  • 1 one-click upsell, order bump, coupon code, and A/B test
  • Deadline funnels
  • Stripe and PayPal integrations
  • 1 custom domain

As your business grows, you can easily scale your business with our 3 paid plans:

  • Startup plan at $27/month — You get more of everything as well as 3 custom domains
  • Webinar plan at $47/month — We throw in 10 custom domains, 10 webinars, and upgrade all the remaining features
  • Enterprise plan at $97/month — We give you unlimited everything, so you can build a business and create as many marketing emails as you need!

Are you ready to create and launch email marketing campaigns that convert?


Join the systeme.io family today!

6. Conclusion

An effective email marketing campaign can greatly boost your sales, so it’s a worthwhile investment.


You can use an agency or do it yourself — and with all the options available, tailoring a campaign to suit your needs, and your budget, is entirely possible.


Using an all-in-one marketing platform, like systeme.io, will make the process easier and more cost-effective.


So visit systeme.io today to launch your first campaign for free!

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