Budgeting for E-commerce Email Marketing: Tips for Online Stores

Roman Shvydun

• 7 min read

$10, $500, or $1,000 per month?

How much should you spend on email marketing?

What is conventional wisdom on this matter in the world of e-commerce, and how to find a sensible compromise? How do you determine the exact sum you need for your email campaigns?

37% of brands have already increased their investment in email advertising. Let’s see how much they are ready to spend and what can help you calculate an email marketing budget for your e-commerce store. After that, grab some valuable tricks to help you watch your pennies

What’s the Average Budget for E-commerce Email Campaigns?

Gartner found that CMOs dedicate 7.8% of their marketing budgets to emails, as a rule.
Smaller e-commerce brands can spend from $10 to $500 monthly on email campaigns. Meanwhile, it’s not uncommon for large businesses to lay out $1,000 or even $2,500 on those every month.
Of course, the email marketing budget of your online store will largely depend on certain variables. Explore them all below.

What to Consider When Calculating Your Budget on Email Marketing in E-commerce


Pay attention to these five essential factors affecting the cost of email marketing:

  • Human resources
  • Tech stack (automation tools)
  • Quantity of emails/month
  • Size of messages
  • Interactivity level in design

Always keep them in view when planning your budget for email campaigns.

Human resources

Do you plan to promote your e-commerce business via email yourself (in-house) or outsource it to an agency or freelancer?

If you’re doing this in-house, do you have a dedicated email marketing team, or are you all alone?

For example:
If you prefer collaboration with a freelance email marketer, the hourly rates vary from $15/hr to $40/hr on Upwork. In case you want to stick with a professional agency, the average cost ranges between $100/hr and $149/hr. As you can see, the cost of email marketing with an agency may be up to ten times higher.

Email automation tools

Suppose you would like to automate your marketing emails. Let’s take a look at the subscription plans of different tools.

HubSpot

When selecting the Starter Plan at HubSpot, the price will be $20/month with 1,000 contacts. The Professional Plan subscription will cost you $800/month with 2,000 contacts (and $225/month per every 5,000 additional electronic addresses).

MailChimp

In the case of MailChimp’s pay-as-you-go plan, you’ll spend $1,000 for every 50,000 emails sent.

MailGun

In contrast, MailGun offers you a Foundation Plan at $35/month with 50,000 emails.

Consider other prices at EmailToolTester.

Type and number of emails sent

What emails, and how many of them, do your customers usually get from your online store every month?

Go through the most popular types:

Your budget for e-commerce email marketing will largely depend on their quantity. You can limit your communication with customers to only one message per week or send two or three messages, increasing your email marketing spending correspondingly.

Email copy size

In e-commerce, you may often come across image-only emails. These are frequented among such brands as Serena & Lily, Bumble and bumble, TOMS, and others.

Alternatively, they may be filled with images and texts, like this one by Son De Flor.

Note: The lengthier your message, the more you’ll have to pay for email copywriting.

Gimmicks in design

You can deliver static messages or create dynamic content with interactivity for improving and personalizing email experiences: videos, image carousels, GIFs, etc.
Dolls Kill, for instance, optimizes every second newsletter with animated GIFs to boost engagement rates.

You might have to hire a designer if you want something special like this.
However, you can find tons of free resources for your email design without spending a dime on those gimmicks.

Besides, there are some other ways to reduce email marketing costs. Read on.

6 Budgeting and Cost-Saving Tips for Email Marketers

Count every cent and budget wisely with these tactics.

Define your email marketing objectives

Depending on your e-commerce email marketing strategy, you may establish different targets like these:

  • Boost email sign-ups
  • Inform your subscribers about a new product/service
  • Build long-lasting relationships
  • Convert quality leads
  • Increase your open and click-through rates (or other email marketing KPIs)
  • Activate idle customers

Anthony Martin, Founder and CEO of Choice Mutual, explains how your choice changes the whole budgeting process:

“In case you aim at growing your subscription list, your email marketing budget may be considerably higher due to additional expenses on lead magnets to capture email addresses. Nowadays, e-commerce shopping websites eagerly invest in effective lead attractors like discounts, coupons, giveaways, quizzes, calculators, etc.”

ChoiceMutual, for instance, uses an interactive price quote calculator on the website to generate more leads.

Mark your welcome emails as “essentials” in your budget

Strikingly, welcome emails have the highest open rate among others – 91.43%. And yet, only 57.7% of companies send greetings to their newly subscribed users.

“A welcome email is an important contributor to your email marketing success. And it should be on your list of essentials when budgeting for email marketing in e-commerce,” claims Fernando Lopez, Marketing Director at Circuit.

Here’s a greeting from Circuit: You’re in!

Bonus tip: Don’t forget about an emotional appeal and make your words sound welcoming right from the subject line:

  • Dear, Welcome to Diamond Candles – Diamond Candles
  • Thrilled to have you with us – Bellroy
  • Oh, Hi There! Nice to Meet You – Forever 21
  • You joined at just the right time... – Brooklinen

Configure subscriber list segmentation

Are you still sending identical messages to all subscribers?

According to Alex Milligan, Co-founder & CMO of NuggMD, “One of the best budgeting strategies in email marketing is segmenting your email list. It implies dividing customers into groups based on certain criteria and targeting each group separately. This way, you can cut email marketing costs, make your messages more deliverable, and attract the attention of the right (targeted) customers.”

Alex Milligan names the main customer segmentation types to improve your email deliverability and marketing ROI:

  • Geographic (by location)
  • Psychographic (by character traits, lifestyle, attitudes, beliefs, etc.)
  • Demographic (by gender, age, income, etc.)Behavioral (by behavior)
  • Needs-based (by unique requirements)

For example:

NuggMD starts with geographic email list segmentation, asking a subscriber to confirm the location.

Pick your optimal sending frequency

Roughly 45% of marketers send their e-letters to subscribers weekly.
But how many of them should you send each week?

“For most e-commerce businesses, 1–3 emails per week are optimal,” says Michael Power, CMO at DTF Transfers.

“This benchmark is beneficial if you’re only beginning to grow your customer base. However, it’s always better to adjust your send frequency for more engaged and less active audiences,” he recommends.

That’s what DTF Transfers does to make Shopify email marketing more effective. Noticing the customer’s interest in one specific product, the company sends the second message the next day after a transactional email (account confirmation). The subject line is: Did something catch your eye?

Mind seasonality

Did you know consumers received 116.5 million emails on Black Friday in 2022, more than on any other day?
Was your promotional message among those, too? Are you also budgeting for seasonal e-commerce emails?
“Typically, e-commerce brands allocate additional budgets on email campaigns during holidays,” notices Jonathan Elster, CEO at EcomHalo.

“The top holidays they prioritize on their email marketing calendars are Valentine’s Day, Mother’s Day, Father’s Day, 4th of July, Halloween, Thanksgiving, Black Friday, and Christmas,” he mentions.

Take advantage of ready-made templates for the biggest holidays and sales days in email marketing:

  • Valentine’s Day
  • Easter
  • Thanksgiving
  • Black Friday & Cyber Monday
  • Christmas and New Year

Check free email templates for all US holidays and rock your audience with captivating subject lines, irresistible CTAs, and stunning designs.

Bank on the power of psychology

Why not send fewer messages but instead pin faith on persuasive email techniques backed by psychology?

This tactic can help you noticeably minimize your email marketing budget.

See how e-commerce brands use various psychological tricks in their subject lines:

  • TOMS → power of numbers: Top 10 styles for summer travel color psychology
  • Tata Harper Skincare → color psychology
  • Celebrating Wellness, Every Day💚
  • Cozy Earth → fear of missing out: Are You Going To Miss Out On The Sale?
  • Moosejaw → sense of urgency: Time’s running out. Get an EXTRA 15% off now.
  • Bombas → sense of scarcity: Low Stock 🚨 Limited Edition Styles
  • Forever 21 → sense of curiosity: You’ll look amazing in these
  • Biossance → feeling special: We miss you💔
  • Harry’s → wordplay and humor: We’re always hair for you
  • ButternutBox → emojis: 🥑+🥕+🌽

Emoji marketing is super popular among e-commerce stores. Have a look at the last ten emails from Little Whimsy.

You can also use gamification in emails, psychologically impacting the recipient’s brain with rewards. For example, check this spin-to-win game sent by New Look.

Bonus tip: from Andrew Pierce, CEO at LLC Attorney:

“Gambling on email marketing psychology, you shouldn’t forget the fair play rules. Mind that deceptive trade practices are punished by law. Spammy or misleading subject lines are among those. They trick customers into opening a promotional email. For example, it can be the order confirmation message to a customer who hasn’t ordered anything yet.”

Budget Sensibly for Successful E-commerce Emails

So, what’s your call?

With these email budget allocation insights and cost-efficient techniques, you can now decide wisely.

Save even more by choosing an innovative workflow for creating emails. Chamaileon is a flexible and super-fast email builder that lets you craft impeccable designs the way you prefer for your e-store.

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Start today and astonish your customers with unique emails and personalized experiences.