The value of measuring return on investment in email marketing campaigns

According to a Revenue Management Sciences study from the 2022 edition noted, “Despite the emergence of other digital media with promotional purposes, such as social media, e-mail marketing is still one of the most profitable marketing techniques (Bawm and Nath 2014) in terms of return on investment (ROI), with reported median ROIs of 122 percent.”

ROI traditionally measures the financial return relative to the investment cost. In healthcare quality improvement and marketing, ROI also reflects broader benefits, including enhanced patient care, increased institutional reputation, and improved operational efficiencies. Healthcare ROI integrates cost-effectiveness, cost-benefit, and value-based outcomes.

Email marketing is a cost-effective communication channel. For every dollar spent on email marketing, healthcare organizations can expect a substantial ROI, with some reports indicating high returns per dollar invested. This high ROI is driven by the relatively low costs of email deployment compared to traditional advertising and the ability to reach a large, targeted audience efficiently.

How to measure ROI in email marketing 

ROI is calculated using a standard formula where net revenue includes income generated directly by the email campaign. A BMC Health Services Research study on the concept of ROI in large scale improvement programmes notes, “As ROI moved from commerce to healthcare frontlines, it became more than a metric. It became a concept of returns or gains from an investment.

ROI in QI is conceptualised as value or benefit as demonstrated through a combination of significant outcomes for one or more stakeholders.” This financial calculation provides a straightforward measure of the profitability of a campaign, but in healthcare, ROI measurement extends beyond mere financial returns to include broader dimensions of value and benefit.

ROI in healthcare is conceptualized as a blend of cost-effectiveness, cost-benefit, cost-saving, and cost-avoidance, alongside improvements in patient outcomes and organizational efficiency. This integrated view acknowledges that while financial returns are relevant, the ultimate goal of healthcare marketing is to enhance patient care and engagement, which may manifest as increased adherence to treatment, better health literacy, or higher patient satisfaction.

The factors used to measure ROI in email marketing

• Open rate: The percentage of recipients who open the email. It shows how compelling the subject line is and how much recipients trust the sender.
• Click-through rate (CTR): The percentage of recipients who click on links within the email. It indicates how engaging and relevant the content is.
• Conversion rate: The percentage of recipients who complete a desired action, such as scheduling an appointment, downloading a resource, or signing up for a webinar. This measures the effectiveness in driving patient behavior.
• Unsubscribe rate: The rate at which recipients opt out of future emails. A high rate may signal issues with content relevance, frequency, or targeting.
• Bounce rate: The percentage of emails that fail to be delivered. High bounce rates can harm sender reputation and reduce campaign reach.
• Spam complaints: The number of recipients marking the email as spam. High complaints damage sender reputation and can block future emails.
• Delivery rate: The percentage of emails successfully delivered to inboxes. It affects how many recipients actually receive the message.
• Audience quality: Measures how well the campaign reaches the right patients who are likely to take meaningful action.
• Leads generated: The number of potential patients entering the marketing funnel from the email campaign.
• Patient lifetime value (LTV): The long-term financial value of a patient acquired or engaged through email marketing, beyond immediate revenue.
• Engagement levels: Overall interaction including opens, clicks, replies, and other forms of engagement that indicate recipient interest.

The value of ROI data in the improvement of email marketing campaigns 

ROI provides healthcare organizations with actionable insights that promote strategic decision-making. Quantifying the financial returns generated from email campaigns relative to their costs allows these organizations to identify which initiatives yield the highest returns and which require adjustments. 

An article published in Growing Science notes, “Optimizing cost management plays a pivotal role. By scrutinizing expenses, eliminating waste, and renegotiating contracts with suppliers, a business can free up resources that can be reinvested or used to expand profit margins.” 

The data assists in the effectiveness of different strategies like content personalization, audience segmentation, and timing of communication. For example, if a particular campaign demonstrates a low ROI, it prompts a thorough analysis of its components which refines the future performance. ROI data can also help allocate their marketing budgets more effectively by directing funds toward high-performing channels and tactics. 

How to use the data collected 

ROI data enables healthcare marketers to identify which email campaigns generate the highest returns, whether measured by appointment bookings, patient retention, or engagement metrics such as open and click-through rates. By analyzing these data points, organizations can discern which types of content, messaging styles, or call-to-actions (CTAs) resonate most effectively with their target audiences. 

For example, campaigns that include personalized health tips or appointment reminders tailored to a patient’s medical history tend to yield higher engagement and conversion rates than generic mass emails. This insight allows marketers to refine content strategies, focusing on delivering value-driven, relevant information. 

ROI data supports segmentation and personalization efforts. Healthcare email marketing studies stress the need to segment patient lists based on demographics, behavior, and health status to deliver targeted messages that align with individual needs. ROI metrics reveal how different segments respond to specific campaigns. Patients with chronic conditions may respond better to educational content about disease management.

Another application of ROI data is in database management and list hygiene, which directly impacts campaign success and cost efficiency. Maintaining up-to-date and accurate email lists is crucial because outdated or incorrect contacts waste marketing resources and reduce ROI. ROI tracking helps identify segments with high bounce or unsubscribe rates, prompting timely list cleaning to remove inactive or invalid addresses.

A BMC Health Services Research study on the use of direct marketing in health and medicine, “With concerted efforts over time, custom lists will grow and become true institutional assets, typically exceeding the value derived from their more generic, purchased counterparts.”

How HIPAA compliant marketing platforms make ROI tracking easier

HIPAA compliant email marketing platforms enable healthcare organizations to collect and analyze engagement metrics, such as open rates, click-through rates, and conversion rates, without risking the exposure of PHI or violating regulatory requirements. These platforms are designed with robust technical safeguards, including encryption, secure data storage, and access controls. 

Organizations can confidently track aggregate campaign performance while maintaining patient trust and legal compliance. This secure environment allows for the collection of detailed analytics necessary for ROI calculations, such as the number of appointments booked, services utilized, or follow-up actions taken as a result of email campaigns, without compromising sensitive patient data.

Paubox Marketing is a HIPAA-compliant email marketing platform that exemplifies these benefits. Paubox Marketing offers features such as encrypted email delivery, secure storage of contact data, including PHI, and detailed analytics dashboards that track campaign performance metrics relevant to ROI. Its ability to integrate with healthcare data systems and automate personalized, compliant communications makes it a practical tool for healthcare organizations.

FAQs

What is an email marketing campaign?

An email marketing campaign is a coordinated set of individual email messages sent over a specific period to achieve a particular goal.

How does an email campaign work?

Email campaigns typically include a call-to-action (CTA) designed to encourage recipients to take specific actions.

How long should an email campaign be?

The length of an email campaign can vary; single emails may be brief, while newsletters can be longer. The key is to match the content length with what the audience expects.

What are the ways to measure the success of an email campaign?

Success can be measured through key metrics such as open rates, click-through rates, conversion rates, and overall ROI.