What Are The Benefits of Email Marketing for Small Businesses?

The first email marketing letter sent by Gary Thuerk from Digital Equipment Corp. resulted in $13 million in sales. Since then, this digital marketing tool has been used widely for both commercial and non-commercial purposes.

It is also quite popular with small business owners due to its affordability, functionality, and efficiency. However, there are still considerations regarding email marketing.

Unfortunately, not all business owners are ready to invest their hard-earned money in marketing. At the same time, it's always always a growth point. When used wisely, email marketing helps you reach your audience, boost sales, make your brand more recognizable, and build credibility and trust. Let's explore the benefits of this tool and how you can make your marketing efforts work for your business needs.

What Is Email Marketing?

Email marketing is a way to promote products or services through email newsletters. However, this is not spam, since mailings are only sent with the user's consent. Email marketing is a one-stop channel for business advancement. It's widely used in many areas, including B2B, online commerce, the services sector, the web, and even show business. When implemented correctly, this tool may be a practical solution for boosting sales and building strong relationships with your target audience.

The Importance of Email Marketing

The importance of email marketing lies in its efficiency. Email campaigns help business owners stay in touch with their clients, inform them about new offers, and create website traffic. Whether you sell hand-made stuff or advertise $3,000 installment loans for bad credit, your ultimate goal is to attract the target audience and get the customer to take the final action, such as making a purchase or applying for a loan. This is exactly what email marketing campaigns do.

Why Might Business Owners Need Email Marketing for Small Businesses?

Many people still consider email marketing an outdated and ineffective tool. However, it's obviously not. As a small business owner, you may find this tool useful due to the following data-driven reasons:

  • 82% of marketers all over the world use email marketing;
  • According to SeQuel's 2023 Direct Mail Marketing Benchmark Report, 89% (+3% compared to 2022 data) of marketers have increased or maintained their direct mail investments in the last year;
  • 91% of respondents claim that email marketing campaigns positively impact the company's performance and presence;
  • Agency Analytics data says email marketing is about 15 times more effective in terms of ROI compared to social media marketing.

Top 10 Advantages of Email Marketing

Here are the major email marketing benefits.

1. High ROI

According to the data for 2023, each $1 spent on email marketing campaigns comes with a huge return of about 3,600% (or $36). In some cases, ROI can be even up to 4,500% ($45 for each $1 spent). More than that, some instruments can help you increase these numbers. Techniques like a double opt-in or A/B testing can result in a higher return.

2. Personalization

Personalization is quite important as customers want to read emails that meet their current needs or can address their specific problems. As there's no one-size-fits-all solution, adding a sense of uniqueness to your advertising is always a good idea. Email marketing makes creating personalized content possible and – what's also quite important – easy. This can positively affect sales by attracting loyal customers.

3. Brand Recognition

While huge companies and corporations can buy advertising space in Times Square to increase brand recognition, small businesses are forced to search for a more affordable solution. Email marketing allows you to build a strong brand presence by using unique design solutions and providing your customers with valuable and informative content. Thus, it becomes much cheaper and easier to build a recognizable brand appearance.

4. Access to Target Audience

Since email marketing campaigns are conducted on a permission-based basis, all the people on your list are your potential customers. As they provided their contact information of mere motion or personally agreed to an email newsletter, they are already interested in your product or service. This means that you can offer your product to people who are ready to buy it by using the right techniques.

5. Integration with Other Marketing Channels

Email marketing can be easily integrated with social media marketing and other advertisement and promotional instruments. For example, you can use your social media accounts to gain subscriptions and then add social media links to your emails to generate traffic. This is quite helpful for your business's SEO ranking, which can potentially bring you more new customers.

6. Sales Improvement

According to the latest data, about 59% of consumers claim email marketing affects their purchasing decisions. This means that people are very likely to buy products you advertise via this marketing channel. You can also use email marketing to engage former customers who haven't made purchases on your website for a while.

7. Relationship Establishment

As email campaigns can directly reach your customers with information they are likely to see, you can use this opportunity to build strong customer relationships. All you need is to provide valuable data, timely inform your clients about promotions you have, and offer extra perks. For example, you can provide birthday discount coupons or simply send congratulations.

8. Excellent Combination of Price and Quality

Email marketing shows excellent results in terms of price-quality ratio. By paying a relatively small amount, as for the modern marketing industry, you can get a very good return, boost sales, and increase your client base.

9. Traffic Boosts

Another advantage of email marketing is the ability to insert links to your sites and increase traffic on relevant pages. Depending on your specific business goals at the moment, you can either promote a product and increase sales or provide links to other pieces of content provided on your site or blog. Thus, you can boost site traffic, as well as inform consumers about some special offers, including limited-time ones.

10. Ease of Result Tracking

Email marketing is easily measurable, meaning that you can evaluate it efficiently and make adjustments for better results if needed. If you use email marketing software, you can see the number of emails you've sent, how many of them were opened, and how many times users clicked on the links provided in your email. All these will help you understand whether your campaign is successful or requires any improvement.

Email Marketing Drawbacks

Although email marketing is a practical tool for boosting sales and ROI and establishing strong relationships with users, it comes with a few considerations. Here are the major cons of email marketing:

  • People often confuse mailings that contain links with spam and skip them;
  • Users can be annoyed by commercial offers, especially by unexpected ones;
  • As many companies use email marketing, it creates high competition. Thus, you need to turn to various tricks to grab their attention.

Tips on Creating an Effective Small Business Email Marketing Campaign

Although email marketing is highly effective, it is worth remembering that customers are usually reluctant to provide their data for mailings and may treat it as spam. This is why the right approach is the key. Here are a few tips on creating an effective and customer-friendly marketing strategy for a small business:

  • Use email marketing software. Email marketing software can provide you with a detailed picture of a campaign's results. You can then assess them and make adjustments if needed;
  • Write engaging subject lines. With so many emails people receive every day, your mailing needs to be one of a kind. Think carefully about how to describe your offer or message purpose with one short sentence that will make your customers curious and want to open the email. However, you should feel the difference between captivating lines and clickbait;
  • Create relevant content. This will help you avoid spam filters and prevent your email from getting into this "invisible" folder. Don't use spammy subject lines, and follow the anti-spam laws and regulations;
  • Work with a permission-based list of customers. Treat your customers with respect, and don't send advertising emails to people who haven't given you their consent. Such aggressive tactics are most likely to lead to nothing but irritation;
  • Make sure your shopping experience is convenient. Make sure the link you provide points to the correct page. Also, you need to be certain that you will offer a customer-friendly shopping experience for both mobile devices and laptop users. If the user has to take many additional actions or look for the product you advertise when they follow the link, they are more likely to get frustrated and leave the site page;
  • Maintain a texting schedule. Planning is always the first step to success. It's always better to have a clear texting schedule dedicated to specific events and correlated with the content plan;
  • Make unsubscribing as easy as subscribing. Some customers may subscribe by accident or may no longer be your target audience over time. Give them the opportunity to unsubscribe in every email you send. This way, you will avoid users' irritation.

The Effectiveness of Email Marketing

Email campaigns are one of the most valuable marketing tools. According to Litmus, every dollar invested in an effective email marketing campaign generates $36 in profit, while social media marketing has an estimated return of about $2,80 for every $1 spent.

However, each marketing campaign requires proper planning and assessment. Here are a few metrics to look at to determine the efficiency of your email marketing campaign:

  • Assess the click-through rate. This rate shows the percentage of recipients who clicked on a link provided in your email;
  • Review the open rate. The open rate is about how many people saw and opened the email you sent to them;
  • Check the conversion rate. The conversion rate demonstrates the percentage of consumers who made the final action, whether it's a purchase or completing a form;
  • Pay attention to the unsubscribe and spam complaint rates. If your email campaign resulted in too many spam complaints or unsubscriptions, you probably did something wrong;
  • Evaluate the bounce rate. This rate shows how many invalid emails are in your database. If it's high, you should conduct an analysis and understand whether it is worth excluding the email address from the database or whether the bounce occurred due to a full inbox;
  • Estimate the forward/share rate. The forward/share rate demonstrates how many customers resend your email to their friends;
  • Calculate the overall campaign ROI. The overall ROI shows the return on investment for each $1 spent. It's calculated as follows: Net profitEmail marketing cost. Net profit here is the difference between gross profit from email marketing and the email marketing cost.

Email Marketing Laws in The US

The US email marketing law is represented by the CAN-SPAM Act. Here are a few guidelines regarding email marketing that each marketer needs to meet:

  1. Don't use misleading or false header information.
  2. Subject lines must not be deceptive and should reflect the content.
  3. Inform your email recipients about the ad in a message.
  4. Specify your address or location in the email.
  5. Let people know how they can unsubscribe.

Breaking these rules can cost you as much as $43,792 in fines per violation. Keep in mind that a single violation refers to each email that doesn't follow the guidelines.

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