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4 Reasons Your Email Marketing
Isn’t Generating ROI For Your
eCommerce Store
(And How to Fix It)

You’ve heard the saying, “the money is in the list.”

And it’s true, it is.

In fact, your email marketing should be accounting for at least 30-40% of your eCommerce store’s monthly income. 

But what if it’s not? What after doing everything you think you should be, you’re still missing the mark?

I know it’s frustrating. 

And chances are, it’s not even your fault. 

The world of marketing is constantly changing and what is working with email marketing often changes a bit right along with the rest things.

But don’t worry.

Below, we’re going to breakdown the four main reasons why your email marketing ISN’T making you the income it should be, and how to solve it! 

So if you’re scratching your head trying to get email marketing to work better for you, this post is for you. 

Let’s dive in.

1. The rising cost of customer acquisition
and Return On Ad Spend (ROAS) 

It’s no secret the average cost of ads continues to rise. Just take a look at this 2018 ad cost chart from AdEspresso:

Ad costs in 2018

Now, take a look at costs for Q1 in 2019:

Ad costs in 2019

Did you see that spike?

From as low at 20 cents in 2018 to over double at over 40 cents a click in 2019. That means you’re now spending DOUBLE what you’ve been spending in the past to get the same customer.

That’s just looking at the averages. If you have a niche product, that contrast could be higher! 

If your AOV (Average order value) has not increased in that same time frame, then the math shows you’re losing more money to acquire a new customer.

Think about this: 

ROI_eCommerce_Store_Sendlane_Chart
  • Let’s move on to the next ROI issue.(And don’t worry, we’ll show you how to fix this issue in a bit, so hang tight.)

2. Finding ways to increase customer
lifetime values by creating repeat buyers 

Take a minute to consider these two points:

• A return customer is 73.72% more likely to make a second purchase

• A return customer spends an average of 16.15% MORE than a new customer. 

If you’ve been spending the majority of your time trying to get new customers and you haven’t put enough effort into selling more to your current customer base, then you’re probably going to see low ROI from your email and other marketing efforts. 

Here’s some quick math to show the differences between new acquisitions versus getting sales for your current audience. 

I’ll keep the numbers simple so that we don’t get too crazy here. 

Let’s say you have 100 customers who are already on your email list that you’ve segmented as customers who’ve made a purchase.

You target them with emails to get them to purchase something. The average cart is $100, and your conversion rate is 1%

100 x 1.73% (because they are 73% more likely) – 1-2 sales 

100 customers x 1% = 1 sale 

Then add the return average cart value (ACV) spending 16.5%.

So, with 1-2 sales at $116.50 (I added 16.50 to the $100 ACV) to drive you anywhere from $116.50-$232 in revenue, which cost you just time.

Now on the flip side of this, you could have spent money on ads to target people who haven’t bought from you and acquired a new customer for $100. 

With that same math, you would have spent $300 to get that one person which means you’re now -$200 in the hole and you spent time waiting for those 100 clicks. 

Even if we dropped the CPC in this example to just $1 you’re only breaking even. 

So to restate, with this example: 

  • Focusing on repeat customers gained you revenue of $116.50-$232, while
  • focusing on getting 1 new customer means you lost $200 or maybe broke even
  •  

The power of a repeat customer is more than JUST numbers. 

It’s the time, the process, and care. It’s about the nurturing process and how important it is in the customer journey. 

And really, it could be the difference between your online store thriving or shutting down. 

3. A lack of brand awareness and
creating a connection with your tribe

It’s easy to forget that your store traffic is coming from a REAL human on the other side of the computer or mobile device. 

And truthfully, the people on the other side also forget there are REAL people running the store they’re browsing.

This internet thing is still pretty new in the grand scheme of things and human emotion must now be portrayed through another non-person to person connections like email or SMS. 

But the companies that manage to succeed without that cool, hip storefront or money to through at large influencers are ones with great stories. 

Not just a great story, but a good message or brand vision.

Consider brands like TOM’s — a shoe company that donated a shoe for each purchase. Or Pura Vida — a bracelet company that offers full-time jobs to artisans worldwide and donates millions to charity. 

Just two powerful examples of companies that aren’t known for their products alone, but for their mission or vision.

Now I’m not saying that you absolutely need to have one. But as a digital marketer, in order to truly get the most out of an email list, you need to have a reason for people to want to follow you.

It could be as simple as you are the big cheesy discount guy who always sells stuff cheap. Or it could be the prettiest pictures in the world and people just love to browse.

It doesn’t matter, find what makes you different. And creating that difference is what will make you stand apart from the others. 

4. Lack of knowledge on how to
properly do email marketing

The final and most important of point all because everything I listed above, leads to this.

The biggest player into why your email doesn’t bring in the ROI you need is because there’s a huge gap in education about email marketing in the eCommerce space. 

Email marketing isn’t taught in school or college; it’s taught working in marketing at a brand or agency dedicated to it.

Many times, email marketing is one of the LAST items to be thought about in businesses, because it’s “just email.” 

And thanks the majority of people think of email as simple drip campaigns and weekly newsletters. 

Why? 

Because the people assigning the tasks or driving the vision (owners, VP’s, directors, managers) aren’t aware themselves. 

Sure, there are great ways to learn by reading some blogs or watching cool videos on Youtube (like ours.

Or to make life a whole lot easier, you could just let us explain to you about our framework that gives you a deeper, more meaningful understanding of email marketing automation. 

They practically make it look like a game!

You can also make your surveys interesting and approachable by using Likert scales and star ratings.

Better yet, offer respondents delicious incentives they won’t be able to resist!

Like Tarte Cosmetics does:

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Jimmy Kim

CEOSendlane
Based out of San Diego, California, Jimmy has been a digital marketer for the past 10+ years. Before his ventures online, Jimmy rose from the ranks, started off by washing cars at a local dealership and eventually ended up being one of the youngest General Managers in the country by the age of 25. After being burnt out working 80+ hours a week, he eventually turned to Digital Marketing. He found a passion in email marketing and in 2013 helped create Sendlane as one of the co-founders. Today, he leads the entire Sendlane team.
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