Ten Steps for Developing an Effective E-mail Strategy, Part 6

This is it, the final piece of the six-part series on developing an effective e-mail strategy. You’re well on your way to a formal e-mail strategy. Don’t despair if you’re just joining us. You can easily catch up by reading parts one, two, three, four, and five.

One last time, here are the 10 steps required to develop an effective e-mail strategy:

  1. Identify qualitative goals.

  2. Analyze the current situation.
  3. Complete a competitive analysis.
  4. Define the target audience.
  5. Determine which types of e-mail meet your needs.
  6. Develop a content strategy and a frequency and send schedule.
  7. Design the e-mail template.
  8. Create quantitative goals.
  9. Compile budget and ROI (define) projections.
  10. Evaluate results and tweak the strategy accordingly.

These come from the strategy section of my new book; the publisher’s offering this chapter free of charge, if you want more detail about the process. Also in the chapter is a case-study-like example, so you can see how it’s done.

We’ve already covered in detail items one through eight. Today, we’ll cover items nine and ten: compiling budget and ROI projections, and evaluating your results and tweaking your strategy accordingly.

Compile Budget and ROI Projections

What does an e-mail campaign cost? In the early days, e-mail was often touted as being free, but to develop a professional e-mail program you do need to spend some money. Some of the key line items to include in your budget are creative costs and the send.

Creative Costs

I’m using the term “creative” rather broadly here, including e-mail copywriting, design, and programming. Do you have to bring in specialists in each area to develop your e-mail? Not necessarily. You can do it yourself, but understand you’ll often get better results from professionals.

The pricing I’ve included here is for work done by good-quality freelancers. Consider these figures to be minimum ranges; below this and I’d question the resource’s value.

Can you spend more money on e-mail than my guidelines suggest? Oh, yes. There’s a top-notch New York interactive agency I work with, on behalf of a client, where e-mail creative starts at $5,000 and up. That’s more than three times the estimated cost below. Is the response to its e-mail three times better? Not necessarily. But it can charge these rates because companies pay them.

Copywriters use a variety of pricing models. The most common are a charge by the word, an hourly fee, and a flat rate per e-mail. In general, you can expect to pay one of the following:

  • $0.50 to $1.00 per word

  • $75 to $125 per hour
  • $350 to $700 per one-page e-mail

I prefer to work on a flat-rate basis, with a fixed cost upfront. To get the best from a copywriter, be sure you provide a detailed creative brief.

If you’re only sending text e-mail, you won’t need a designer. But HTML, used judiciously, is a better way to present information (even with images blocked), so it makes sense to bring in someone who can help you with layout and look.

As with copywriters, I prefer designers who charge a flat rate per e-mail. That said, sometimes great designers charge by the hour, so here are some ballpark cost estimates for both models:

  • $75 to $150 per hour

  • $100 to $500 per one-page e-mail

E-mail design can be a minefield. Be sure you work with a designer who understands her role is to support the business goal. While it needs to be appealing to the eye, it shouldn’t overshadow the copy. My e-mail creative checklist will help you do this and get the best from designers.

The last, but equally important, member of any creative team is the programmer. You may not need a programmer if your e-mail service provider (ESP) offers templates or a WYSIWYG editor. But if you do, expect to pay either:

  • $40 to $75 per hour

  • $100 to $250 per e-mail

I usually estimate the programming cost at about half the designer cost. Be sure your programmer is familiar with the ins and outs of e-mail and will guarantee the integrity of his work across multiple e-mail client platforms. Get the basics from this article written awhile back by my colleague Tim Slavin. Recently released Outlook 2007 is creating some new coding issues; Mark Brownlow provides an overview of the controversy, along with links to resources for coders.

The Send

I strongly recommend using an ESP to send your e-mail. There are ESPs to fit every budget, and most offer deliverability and other support you’d miss out on if you use an in-house system.

There are self-service and full-service options here. The former is going to be more affordable, but you’ll need to do the work yourself. The good news is most systems are user-friendly and take little training.

Most ESPs charge either on the quantity of e-mail messages you send per month or the total number of e-mail messages of your list (with unlimited sends included). In both cases, expect to pay a minimum of:

  • $15 to $25 a month for up to 2,500 messages

  • $20 to $50 a month for 2,501 to 5,000 messages
  • $50 to $100 a month for 5,001 to 10,000 messages
  • $100 to $250 per month for over 10,000 messages

For very large lists, ESPs often price on a CPM (define) basis. Many offer flat-rate annual pricing with a maximum yearly send quantity, but you can (and should) still try to estimate a CPM so you can identify a unique cost for each send.

If you’re in need of an ESP, check out the e-mail category winners of the 2006 ClickZ Marketing Excellence Awards. David Daniels of JupiterResearch also does an annual “Email Service Provider Market Guide“with a great overview of the top ESPs.

Your budget for a single e-mail may end up looking something like this:

Item Cost ($)
Copywriting 700
Design 500
Programming 250
Send (800,000 at $10 CPM) 8,000
Total 9,450


Once you’ve identified the send’s cost, you can project your ROI.

Earlier in this series I covered developing quantitative goalsfor your e-mail program and included an example. These goals are going to be the source of your revenue projections. The 800,000 send quantity I used above is from this example; we’ll pair it with our revenue projection of $105,062 to calculate an ROI:

Item Value($)
Total cost 9,450
Total revenue (projected) 105,062
Net profit (projected) 95,612
Revenue per marketing dollar spent (projected) 11.12

In this instance, assuming revenue projections are met, the organization would be earning $11.12 for each dollar spent on marketing. This is well below the $57.25 average ROI for e-mail reported by the Direct Marketing Association late last year, but most marketers would still find it appealing.

Evaluate Results and Tweak the Strategy Accordingly

Once you complete your e-mail strategy, it’s both an ending and a beginning. The best, most effective strategies are living documents. Refer to it whenever you start a new e-mail. You should also keep track of your results and lessons from each send, and use them to tweak the strategic plan as needed.

You may find that your actual opens, clicks, revenue, or other metrics are higher or lower than your projections. If so, add an appendix to your plan with revised projections that use the actual figures.

It’s old-fashioned and, yes, paper-based, but I recommend storing your e-mail strategy document in a three-ring binder. This allows you to add appendices as needed. It also allows you to create a tab for each e-mail or campaign and to keep copies of creative as well as results at your finger tips. It’s a resource you’ll turn to repeatedly, and it can be passed on to your successor when your wildly profitable e-mail campaigns earn you that promotion you will so richly deserve!

That’s my 10-step plan for developing a strategy to improve your e-mail program — and your organization’s bottom line. Once you finish your budget and ROI projections, you can start implementation. Let me know how it goes.

Until next time,


Want more e-mail marketing information? ClickZ E-Mail Reference is an archive of all our e-mail columns, organized by topic.

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