What Growth-Focused SMEs Need to Know About DTC Email Marketing ROI
Plus, 7 startup DTC email marketing best practices to achieve your first wave of growth.
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DTC/B2C SMEs that engage in email marketing can enjoy drastically higher sales with less fees and better ROI.
Depending on your industry, email marketing can yield an ROI of 45:1.
One of the best investments you can make in your email marketing is to hire a copywriter from the get go to provide the best conversions possible (as soon as possible).
Over the years, I’ve talked to a lot of small business owners in the direct-to-consumer (DTC) space.
All of them want to get their products and services in front of as many consumers as possible. Obviously! These brands are ambitious, driven and excited about launching their product and/or reaching the “next-level” of online sales.
Some become very successful, and others do not.
The main difference between all of these small-and-medium enterprises (SMEs)? Their use of email marketing.
When it comes to online selling, SMEs want to optimize every channel: social media, search ads, SEO, third-party retailers and more.
But in my experience – when SMEs neglect to take advantage of email marketing – this is when they completely miss sales targets and struggle terribly with the low ROI of other platforms.
In this post, I want to dive deep into the unparalleled ROI of email marketing for B2C and DTC brands. This article will help you understand why email marketing is so effective and how it can be the key determinant of SME success or failure.
And, since I’m an email copywriter, I’ll be emphasizing the power of effective email marketing copy as well.
The Only Way to Grow: DTC Email Marketing
I know that headline is a little sensational, but I’m not the only one who thinks that!
According to research done by Litmus, for every $1 spent on email marketing, brands see about $36 in return. And, depending on your industry, the ROI could be even higher (say, in the 45:1 ROI range).
You can’t get this with other platforms like YouTube, Instagram or even TikTok.
Mark Mei, founder of Dahaus Digital, shared a great infographic on LinkedIn to demonstrate the drastically higher ROI potential of email marketing versus paid search, paid social, SEO, content marketing, display ads, video and organic social. (RIP organic social…)
Graphic courtesy of Mark Mei.
As you can see from the picture, all the other marketing channels are important, but email marketing yields the best ROI.
Plus, what if one day Instagram or LinkedIn goes under? Even TikTok has a history of potentially being canceled.
If you only have an engaged audience on social media, you’re at the mercy of the platforms’ successes, failures and legal regulations (which are now starting to be scrutinized by lawmakers).
Benefits of Email Marketing for DTC Brands (Beyond ROI)
We will focus primarily on the ROI of DTC email marketing, but here are some additional benefits to selling your products directly via email:
No third-party selling fees (e.g. Amazon, Etsy), so you’re making as much as possible on every sale.
Direct advertising to interested customers since you must allow contacts to opt-in to your emails.
Ongoing relationships with potential customers for brand awareness, loyalty building, nurturing and future conversions.
Capturing leads that would have otherwise never returned to your website or brand social pages.
Revenue-boosting upsells, downsells and cross-sells since you have the time and attention of customers (albeit short attention).
Some competition, but less competition overall since you’re only competing with the hundreds of emails in their inbox (rather than the billions of places they could be online).
Easy conversions and traffic flow to your website, which is your competitor-free corner of the Internet.
Complete personalization and segmentation to inspire the best offers and conversions possible for every contact.
So, with all of these benefits for DTC brands, email marketing is not only effective, but it’s profitable.
That’s not to say that email marketing is easy! Or, that anyone on your team should send out advertising emails all willy-nilly.
Just like the big brands do, SMEs should seriously consider hiring professionals to create and manage their email campaigns – including email list managers, designers and ecommerce email copywriters. (Which of course, will come at a cost.)
Next, let’s look at the costs associated with managing email marketing campaigns. You can then compare the cost-to-benefit ratios for your own brand.
Qualitative ROI of DTC Email Marketing
Every business will be different in terms of how much they earn from email marketing. And we already mentioned the potential monetary ROI above.
You’ll want to sit down and analyze how much you spend (or would spend) to run email marketing campaigns, who you’re paying and how effective they are in creating conversions for your business.
You’ll also need to create a system that helps you understand your email open rates, click-through rates, conversions and click-to-open rates (CTOR).
All of these email marketing metrics will give you different insights about your audience and the effectiveness of your campaigns.
However, I want to explore some qualitative measures when it comes to determining the impact of email marketing and how it can affect SMEs long term.
Email Advertising Is Pretty Cost-Effective
Unlike the potential sky high cost of paid social and competitive paid search, email marketing boasts a much lower cost than other marketing channels.
What Do You Need to Run an Email Marketing Campaign?
The Basics: business email address, email marketing software
The Next Level: email marketing manager or virtual assistant, automation software
The Ultimate Package: email copywriter, graphic designer, email strategist
The Done-for-You Option: email/digital marketing agency
And that’s really it.
Sure, you could add other resources to your email marketing arsenal, but many SMEs see profound success just by hiring an email copywriter and setting up automated emails in-house.
Email Marketing Is Crazy Easy to Improve
While you may not hit 7-figure sales during your first email promotion, most email software gives you the ability to track open rates, click-through rates and conversions.
Some will even generate heat maps that allow you to see what parts of the email are most engaging.
Then, with some simple (and perhaps automated) A/B testing, you can discover which subject lines, preview texts, CTAs and headers are most effective.
If you hire an email copywriter, you’ll also have a significantly higher chance of sales and conversions.
And once you’ve developed high-performing emails by testing them out with a small fraction of your email list, you can then send them out to a wider audience and generate the most conversions, sales and revenue possible.
Direct Email Marketing Makes for Impressive Stats
For SMEs, these impressive stats often equate to awesome sales results. For the experts working on these campaigns, they make for great professional accomplishments – and great party talk.
A Few Notable Stats I’ve Achieved for My Email Clients:
Generated 7-figure sales from a single ecommerce email campaign. This also was their most successful single campaign to date at the time! (2022)
Achieved a 4% CTOR versus the company’s 2.5% benchmark in the ecommerce space. (2021)
Yielded an 80%+ average email open rate for a live event campaign. (2021)
Aside from these email campaigns, I’ve also helped clients with cold outreach, nurture series, retargeting and more. All of which focused on driving conversions, sales and capturing new, old and/or lost leads.
Email Extends Your Customer Lifetime Value (CLV)
If you want to manually call or visit your customers over and over again, go ahead. But email is probably a way better way to do that at scale.
With the invention of automation and AI, SMEs have a much easier time maintaining customer relationships and continuing their ability to convert with them.
That being said, SMEs who fail to personalize and humanize their email marketing will quickly find themselves in the spam folder and/or generate ultra high unsubscribe rates. And this happens all the time.
To remedy this huge risk, email managers can help optimize deliverability and strategy to achieve the best DTC email marketing outcomes. You also have to follow the most updated email marketing best practices and guidelines. Some of which are now mandatory as of February 2024.
SMEs that hire email copywriters can rest assured that their email copy will be completely tailored to what the customer needs to hear - without being scammy or salesy.
Copywriters create compelling emails and intriguing subject lines that get opened more often. Their in-email body copy should also inspire significantly more conversions than what your team had previously generated on a whim.
7 Startup DTC Email Marketing Best Practices for Your First Wave of Growth
Here are some tips for implementing your first round of DTC email marketing campaigns.
Whether your brand is completely new or you’re introducing email advertising for an established brand, these things will help you boost conversions and sales from the get go.
#1 Get Customers on Your Email List, Rather than ContactsOne of the biggest mistakes SMEs make is not ensuring that the people who sign up for emails are indeed potential customers. They build a big list, but the people on it are not in their ideal target audience. That means you’re selling to people who have extremely low purchase potential.
#2 Spend Big on Your Subject Lines
By this, I mean you should be really focusing on the effectiveness of your email subject lines. Or, you should be investing in a skilled email copywriter to create them. After all, if the customer never opens your email, you don’t stand a chance at getting conversions.
#3 Avoid Generic Blast Messaging
A huge reason why email marketing fails for many businesses is because they send email blasts that sound like email blasts. The email copywriting is generic and not personalized. You always want your emails to sound warm, interesting and personal.
#4 Automate Everything for Your Sanity
Low-budget SMEs try to manually send out marketing emails to save money on email automation software. But the problem is that you’re so consumed with the process that you can’t afford to do anything else. Luckily, all-in-one tools like FG Funnels offer cost-savings for essential software. I only pay an extra $20/month for my email list! Check out my review of FG Funnels here.
#5 Test Every Single Thing
Again, this is where investing in a small team of email marketers will pay off big time! But luckily, most email software allows you to test small sections of your audience before sending to a wider audience.
#6 Comply with All Email Marketing Best Practices
I’m not a regulatory email specialist, but there are optional and mandatory things that you must incorporate into your email marketing, especially if you’re a DTC/B2C brand. Not only will these things improve customer trust, but complying will also ensure you don’t get penalized as spam or worse. Things like email deliverability, SPF records, voluntary opt-ins, DMARC and DKIM should all be examined.
#7 Prioritize the Copywriting
A colorful email design might interest your audience, but it’s the compelling email copywriting that will get them to convert. When you find a great email copywriter, they can drastically boost open rates and conversions. Many can also help you optimize other areas of your marketing funnels to ensure that you are getting the most sales and revenue as possible.
Highly Effective DTC Email Marketing Starts with the Copywriting
Call me bias, but copywriting is everything when it comes to crafting high-performing email campaigns. After all, if you don’t have a great subject line, hardly anyone will open your email.
And if you don’t have great in-email copy, anyone who opens the email will click out, hit delete, mark as spam, or worse – unsubscribe and forget about you all together.
And let’s not forget about your competitors! Chances are, they’ve already implemented DTC email marketing. But we can always outdo them.
If you want to explore what it’s like to work with an email copywriter and find out rates, contact me to talk!
Over the last 4 years, my primary service has become ecommerce email copywriting – simply because it is so in-demand by growth-centric SMEs. And it’s been wildly successful.
