How do I measure email marketing ROI for a small shop?

Count the share of your list who came in within a few days of the send. Then count the share who come in over the same number of days in a week with no email. The difference is what the email did. Multiply by your average sale and your margin.

Why subtract a baseline at all?

Because your regulars were going to come in. An email sent on a Thursday to people who visit every Thursday will report a wonderful response rate and cause nothing.

How do I find my baseline?

Pick a normal week with no email. Count how many of the people on your list came in over three days. Divide by the list size. That is the number, and it changes slowly enough to reuse for months.

What is a good response rate?

The wrong question. A 20% response rate with an 18% baseline is worse than a 9% response rate with a 3% baseline. Only the gap matters.

Should I count revenue or profit?

Profit, if you are deciding whether the email was worth sending. Revenue, only if you are comparing against a cost that is also in revenue terms.

What if the email cost me nothing to send?

It still costs you something: a list gets tired, and an email that earns nothing spends the attention you will want for the one that matters. That cost does not show up in this arithmetic, which is why the frequency limit exists.

Email Marketing ROI Calculator for Small Shops

What is one email to your regulars actually worth?

The visits your email actually caused, after taking out the ones you were getting anyway.

Some of the people who came in after your email were coming anyway. Counting all of them is how email marketing reports its own success, and it is why owners stop believing the reports. This does the subtraction, which takes one number most tools never ask for.

Extra visits = list × (share who came after the email − share who would have come anyway). Value = extra visits × average sale × margin.

People you can email

Customers who gave an address and said yes

Came in after the email

Of that list, within a few days

Would have come anyway

Of that list, over the same few days, with no email

Average sale

Gross margin

What is left after costs

Visits after the email

the number most reports stop at

Coming anyway

subtract these

Extra visits

$157 of gross profit

Counting everyone who came in would claim $470. The honest figure is $157 — the rest were coming anyway. One is a number you can check against your till; the other is the one most email tools print.

The baseline is the hard number. If you do not know it, look at an ordinary week with no email and count what share of the same list walked in over the same number of days. KANJIN works it out per person from their own visit rhythm, which is more accurate than one figure for everybody — but the subtraction is the same, and doing it at all is what matters.

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How this screen works

How this works

The share who came in after the send is the number your email tool gives you. It is true and it is not the answer.
The baseline is the share of that same list who walk in over the same number of days in an ordinary week with no email. Measure it once on a quiet week and reuse it.
Extra visits are the difference. Everything after that is arithmetic: extra visits, times the average sale, times your margin.
We also show what the flattering reading would have claimed, side by side, because that is the number an owner has usually been handed.
If the baseline comes out higher than the response, we refuse rather than print a negative. That usually means the sample is too small to read, not that the email drove people away.
KANJIN itself estimates the baseline per person from their own visit rhythm, which is more accurate than one figure for everybody. The subtraction is the same; doing it at all is what matters.

Common questions

How do I measure email marketing ROI for a small shop?: Count the share of your list who came in within a few days of the send. Then count the share who come in over the same number of days in a week with no email. The difference is what the email did. Multiply by your average sale and your margin.
Why subtract a baseline at all?: Because your regulars were going to come in. An email sent on a Thursday to people who visit every Thursday will report a wonderful response rate and cause nothing.
How do I find my baseline?: Pick a normal week with no email. Count how many of the people on your list came in over three days. Divide by the list size. That is the number, and it changes slowly enough to reuse for months.
What is a good response rate?: The wrong question. A 20% response rate with an 18% baseline is worse than a 9% response rate with a 3% baseline. Only the gap matters.
Should I count revenue or profit?: Profit, if you are deciding whether the email was worth sending. Revenue, only if you are comparing against a cost that is also in revenue terms.
What if the email cost me nothing to send?: It still costs you something: a list gets tired, and an email that earns nothing spends the attention you will want for the one that matters. That cost does not show up in this arithmetic, which is why the frequency limit exists.

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Send one, on the day you need it.

KANJIN sends to the customers who agreed to hear from you, counts who came in afterwards, and subtracts the ones who were coming anyway. You see the honest number, not the flattering one.

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Try next

Customer Lifetime Value Calculator for Small Shops

What one regular is worth, and what losing them costs.

Discount ROI Calculator

What a discount costs against a few free visits.

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