Chapter 1

The truth about email ROI

If your organization wants to understand email’s true impact on business results, knowing your return on investment (ROI) from the channel is key. But here’s the thing… 

Measuring email ROI isn’t easy. Plenty of senders are unable or aren’t trying to do so. Those who are evaluating email ROI calculate it in different ways. 

Digital customer journeys have many touchpoints. That makes attribution tricky at best. In this chapter, we’ll take a closer look at the reality of email ROI and offer some advice for measuring email’s impact in your company.
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Key findings on email ROI

While the “death of email” has been greatly exaggerated, it’s fair to say that email ROI has been slightly overblown as well. Up until 2021, the Direct Marketing Association (DMA) published highly-cited reports including self-reported email ROI. The DMA found, on average, email marketing was delivering  between $38 and $42 for every $1 invested in the channel. 

According to Sinch Mailgun’s research, email ROI of 40:1 or higher is possible, but not exactly typical. Sometimes, averages can be deceiving. Plus, every organization is unique, using email for different purposes and measuring ROI in various ways. 

Here’s a quick look at results from our global survey of 1200+ email senders:

46%

of senders say they can measure the ROI of promotional emails.

60%

of senders who measure ROI for promotional emails say it is greater than $10 for every $1 spent.

13%

of senders measuring email marketing ROI say their return is more than $40 for every dollar spent.

43%

of senders say they can measure the ROI of transactional emails.

62%

of senders who measure ROI for transactional email say it is greater than $10 for every $1 spent.

14%

of senders measuring transactional email ROI say their return is more than $40 for every dollar spent.

While an ROI of 10:1 isn’t as mind-blowing as 40:1, making $10 for every $1 you invest in a communication channel is still exceptional. Our research found well over half of senders are achieving this for both promotional and transactional email programs. Plus, more than 1 out of 10 senders we surveyed do report email ROI of $40 or more for every dollar spent.

The truth is, there’s no such thing as “typical email ROI.” The smart move is benchmarking your returns from email communication and looking for ways to improve that number. 

A 10:1 return on any communication channel is genuinely exceptional. Our research shows the majority of reputable senders are already there, across both promotional and transactional programs. More than one in ten are seeing $40 back for every dollar spent. The range is wide, and that’s the whole point. There’s no universal email ROI. The question senders should be asking isn’t whether email has good ROI. Our data makes that answer obvious. The better question is what their specific program returns and what’s holding that number back. The ones doing forty-to-one started by asking exactly those two things.
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Kate Nowrouzi VP of Deliverability at Sinch

The business impact of email communications

Email is such a familiar part of business and everyday life, it’s easy to forget how important it is to keep communications and information flowing. But most senders in our survey understand exactly how essential email is.

A combined 78% of respondents say email is either “Very” or “Extremely” important to organizational success. Another 15% call it moderately important.

If your email program has ever experienced downtime, deliverability challenges, or other technical problems, you too likely understand its importance.

Whether it’s one-time-passwords that fail to reach users or major email campaigns that land in spam, when emails don’t hit inboxes, it can feel like your business comes to a grinding halt.

One of the best ways to understand the impact of email is to determine your ROI. And only some senders say they are able to do that.  

Ability to measure transactional email ROI

Transactional emails include a host of important messages that keep your business running. They include everything from order confirmations and fraud alerts to password resets and shipping updates.

Unlike the mass sending of promotional email, transactional emails are almost always triggered/automated, expected, and contain information for a specific customer or contact.

Our research found 43% of senders are measuring the ROI of transactional email. 32% say they don’t measure transactional email ROI while 25% are unsure.

Transactional email ROI isn’t measured by what it sells ⁠– but by what it protects, prevents, and enables. 

Measuring transactional email ROI

Email marketing drives revenue, making ROI measurement somewhat straightforward. However, transactional emails serve different purposes and may not be tied directly to sales. Organizations that measure transactional email ROI can include several factors:

  • Cost savings and efficiency: For example, order confirmation emails reduce the number of “Did my order go through” messages to support.
  • Risk mitigation and revenue protection: For example, missed payment reminders can lead to delinquency and churn. OTP emails protect users from fraud, but undelivered passwords keep customers out of their accounts.
  • Downstream conversion enablement: Transactional emails don’t drive revenue directly, but they do remove friction from conversion-critical moments. For example, if a signup confirmation or password reset email fails to deliver, users can’t access their account or complete intended actions, leading to abandoned journeys and lost future revenue.

Accurately measuring transactional email ROI requires a little extra work. Data needs to be shared between departments.

An online retailer could use historical data from support and sales for a process to help calculate the impact of order confirmations on email ROI: 

Each 0.1% improvement in order confirmation delivery reduces X “Did my order go through?” incidents per month, protecting $Y in revenue tied to canceled, refunded, or duplicated orders.

Transactional emails are without a doubt a worthwhile investment, especially for enterprise organizations communicating with a large number of customers every day. That means investing in reliable email infrastructure, using helpful deliverability monitoring tools, and finding partners with service-level agreements (SLAs) you can trust. 

Transactional email ROI benchmarks

While calculating the ROI of transactional email expenditures means diving deeper into your data, senders who make the effort are finding positive results.

62% of respondents who measure transactional email ROI say they’re getting more than $10 for every $1 invested.

On the other side,17% of senders see a return between $6 and $10 while 21% say they get $5 or less for every $1 invested in email.

Getting a lower ROI from transactional emails is not a sign you should send fewer transactional emails. Many of these message types are simply a cost of doing business. Your business needs to send them no matter what.

Lower ROI for transactional email may mean you need to evalutate where you can reduce costs, improve performance, and support better email deliverability.

Find out more about how email deliverability supports ROI. 

Ability to measure promotional email ROI

A slightly higher number of senders in our survey indicated they can measure their return from investing in email marketing efforts.

46% of respondents say they are actively measuring promotional email ROI. In our survey, we asked them to consider everything from campaigns to email newsletters.

It’s a bit surprising that more organizations aren’t paying closer attention to the impact of email marketing. Around 30% of senders don’t measure promotional email ROI while 24% are unsure if it’s being calculated. 

The challenge of marketing attribution

While the ability to tie many email marketing campaigns to sales generated from each send, it’s still very possible your company isn’t seeing the entire picture. That’s because digital marketing attribution can be a real mess. Your results depend on how you attribute sales and conversions to certain channels.

Some companies use a last-click attribution model, which means the last channel used before converting gets the credit. Others use a first-click attribution model, which is the opposite. There are also linear, position based, and time decay models, none of which is a perfect solution.

While no single model precisely reflects how customers convert, email remains one of the few channels that consistently influences awareness, consideration, and action across the customer journey. However, attribution models only explain part of the journey.

The takeaway for email senders isn’t to chase a “perfect” marketing attribution model, but to understand the limitations of each and evaluate email’s performance in context – alongside engagement, velocity, and downstream impact across channels. Remember, attribution models give channels credit, but what you really want to know is what influenced behaviors. 

If you want to choose an optimal process for attributing email marketing efforts, the time decay model may be best. Time decay attribution assigns more credit to a channel the closer it gets to a conversion point. Since email can fall just about anywhere in the funnel, this ensures the channel is recognized without over- or under-crediting it.

Here’s how the time decay model would look if a prospect first saw a series of ads before signing up for a brand’s emails, visiting a landing page, and ultimately converting on the website’s Pricing page.

How do you measure email ROI?

If you’re among the 57% of senders who aren’t measuring email RO, or aren’t sure how, here’s the basic formula:

(Total revenue from email – Total cost of email) / Email costs] x 100 = Email ROI 

So, let’s say you’re calculating ROI for a month in which you attribute $200,000 in revenue to the email channel. And you estimate your monthly email expenditures to be around $10,000.

That’s an ROI of 1,900%, which means you made $19 for every $1 your organization spent on email that month. These results would put a sender near the middle of what our survey revealed.

It’s a simple formula, but attributing the right amount of revenue to the email channel can make it tricky. Furthermore, email ROI is rarely a pure financial calculation. It’s a directional model designed to justify investment, compare channels, and guide optimization. But you still need to determine what costs to include in your calculation. 


What costs are included in email ROI calculations?

Deciding what to include in email costs varies widely by organization.

When asked to select what gets rolled into ROI calculations, many respondents chose variable costs such as email infrastructure (25%), which would include shifting send volumes.

22% include the cost of email campaigns, but only 10% factor in the cost of using freelancers or agencies.

Many also include fixed costs such subscriptions for email tools (24%) as well as solutions for contact database management (24%) and deliverability/compliance (22%).

Around 5% of senders who say they are measuring ROI admit they aren’t tracking costs in detail. This makes it awfully hard to get an accurate view of email ROI. 

Email ROI and labor costs

21% of senders in our survey add the cost of people and labor in ROI calculations. That could include your email team, deliverability specialists, or any other employees who frequently work with the email channel. Others may consider labor a sunk cost that shouldn’t be included.

Labor costs are often excluded from email ROI calculations because they are shared across multiple channels. Unlike other expenditures, headcount does not scale directly with email performance, making it less useful for evaluating incremental returns. It may be useful to include if you’re determining the value of increasing the headcount of your email team. 

Measuring email performance

Whether you calculate ROI or not, you need to understand how email is performing.

Our survey found typical email engagement metrics are the most popular way to gauge the channel’s performance. Click rates (65%) and open rates (63%) topped the list. However, going further gives you much deeper insights.

Revenue per campaign (21%), revenue per email (19%), and total email channel revenue (17%) are tougher to measure, but they tell you more about how email is impacting business results.

Deliverability-related measurements, including the delivery rate (45%), bounce rates (35%) and spam complaint rates (21%) were also fairly common.

Only 12% of all senders in our survey use email ROI to measure performance, and 6% say they don’t measure email performance at all. 

Barriers to investing in email

Despite email’s impressive ROI, money seems to be the biggest reason why organizations don’t invest more in the channel.

Our survey found 43% of respondents say budget constraints are a top three barrier. That’s followed by 24% who are prioritizing other communication channels and 23% who say it’s difficult to prove email’s ROI.

That difficulty almost certainly plays a role in the 20% of senders who say getting buy in from leadership is a barrier, which should be an indication that determining email ROI is worth the effort.

Technical issues, such as difficulty with integration (17%), can be remedied with the right partner, especially those who offer scalable email APIs your team can use to build email into its products.

A lack of technical email expertise (17%) can also be addressed with helpful partners who provide technical account managers (TAMs) dedicated to your email program’s success. 

Are you underinvesting in email communications?

While achieving high email ROI may sound like a good thing, it could also be a sign your business isn’t investing enough in this important customer communication channel. It seems counterintuitive, but it’s simple…

If a channel provides a high return, it makes sense that investing more in those efforts would increase your return even further. Email is an essential yet affordable marketing and communication channel that delivers results. So, it follows that putting more time, resources, strategy, and budget towards improving email communication would likely benefit your organization.

Email industry veteran and author, Chad S. White, of Zeta Global explains: 

Generating a super-high email marketing return on investment of, say, 60:1 or more sounds impressive, but it’s actually a sign of underperformance. That’s because, while healthy margins are good, the real goal for most programs is to maximize profits. So, if you have a 60:1 ROI, that means your program is ignoring a wide range of opportunities to invest in tactics, strategies, and other improvements that would generate lower, but still very high returns of, say, 40:1, 30:1, 20:1, or even 10:1, which is still far higher than returns in traditional media. Why pick just the juiciest low-hanging fruit, when you could spend more time and pick way more fruit?
Chad S. White Group VP of CRM Strategy, Zeta Global

How Sinch Mailgun helps with email ROI

Sinch Mailgun helps businesses improve email ROI by ensuring reliable delivery at scale and maximizing inbox placement. With Mailgun Send, brands get powerful APIs to send transactional and marketing emails with speed and accuracy. Mailgun Optimize adds tools for authentication, deliverability monitoring, and engagement analytics to fine-tune performance. Together, they turn email into a high-performing, measurable growth channel.

Email benchmarks: How do you measure up? Chapter 2 Email benchmarks: How do you measure up?