Behind the Numbers: Understanding Email Marketing Costs

email marketing costs cover image with a flower pot full of money

Email marketing stands out for its exceptional return on investment (ROI) because it offers a direct and cost-effective way to engage with your audience. Unlike digital ads and banners, you’re not throwing your message out there and hoping it sticks — you’re reaching people directly in their inboxes.

Moreover, people are habitual email checkers. They open their inboxes daily, providing a reliable channel to connect with them. If your content is relevant and resonates, you’ve got a prime spot for their attention.

If you’re wondering how much you’ll have to spend to get the maximum bang for your buck, today’s your lucky day — this here is the ultimate guide to planning your email marketing costs.

Email Marketing Costs: Breakdown

Email marketing is a must in your marketing arsenal. Executed correctly, it can get you an ROI of as high as 36x the dollars you spend. Calculating the cost of email marketing involves tracking how much you spend on technology, plus the hours invested by individuals or teams in various tasks related to planning, creating, and executing email campaigns.

This table lists typical expenses behind running a successful email marketing operation:

List building or lead generationCost of acquiring new subscribers through different methods.
Email marketing software/Email service provider (ESP)Monthly or annual cost for your email marketing platform.
Staff timeSalaries for employees/freelancers working on your email campaigns (copywriters, designers).
Content creationTools/subscriptions for copywriting and design.
Images or templatesStock photos and other content costs.
Additional toolsThis includes deliverability tools, CRMs, or list management tools.
Transactional EmailsCosts associated with sending transactional emails like order confirmations.
Email Marketing Costs: Breakdown

Before we tell you how much each of these elements is going to cost you, there are specific details about your requirements you will need to ascertain.

Email Marketing: Before You Begin

Grab a notepad and a pen because this is where you decide what kind of email marketing operation you must set up.

Here is a list of questions you must answer before you begin:

  1. What goals do you wish to achieve through email marketing? Do you plan to aggressively convert leads into customers or do you want to use it as a medium of sharing information only?
  2. What’s the maximum budget you can allot for email marketing?
  3. How many contacts do you have? How many do you want by the end of the year?
  4. How many emails will you send each month? This number should include different types of campaigns like drip campaigns, holiday emails, welcome emails, etc.
  5. How important is content quality to you? Is this something you can manage? Or do you want written copy that will mesmerize your readers?
  6. How important is the branding and design of your emails?
  7. This is probably the most important question — how much will it cost you if you ignore email marketing?

With these questions out of the way, we’re going to begin with the costs involved in building your email list, then we’ll move on to setup costs, and finally, we’ll address operating costs.

Lead Generation: Build Your Email List

Alright! So you’re eager to get started with email marketing, but wait — where’s your email list? If you’re wondering why we didn’t mention buying an email list in the costs section, it’s because we’re strongly against it.

Buying email lists is a risky move that can seriously backfire on your marketing efforts. Firstly, these lists often include contacts who haven’t opted in to receive emails from you, leading to high chances of your messages being marked as spam. This damages your sender reputation and email deliverability. In a worst-case scenario, you might even face legal repercussions.

Purchased lists may also contain outdated or inaccurate information, resulting in wasted resources targeting the wrong audience. Building an organic email list takes time, but it ensures your communications reach genuinely interested individuals who are more likely to engage with your content. 

Focus on cultivating relationships with a quality audience through ethical means, and you’ll see more sustainable success in the long run.

Methods to Build a Contacts List

So how exactly does one build a good email list organically? 

Here are various methods you can use:

  • Create valuable content and ask users to provide their email addresses to access the material.
  • Design compelling landing pages with convincing CTAs.
  • Encourage your existing subscribers to refer others.
  • Host webinars or virtual events that require registration.
  • Run contests or giveaways that people can join with their email addresses.
  • Implement exit-intent popups on your website to capture leads.
  • Implement chatbots on your website for lead generation.
  • Use targeted online advertising like Google Ads or social media ads to reach specific demographics.
  • Offer lead magnets like free trials, discounts, or exclusive content in exchange for users’ email addresses.

Our personal favorite method is using lead magnets — they’re an excellent source of high-quality leads as they attract customers who are sincerely interested in your products. Plus we’ve cracked the code to multiply the signups. Read on!

Lead Magnet Multiplier: Get 8x More Subscribers

Lead magnets aren’t a secret, but it seems using them effectively is! Email marketers tend to underestimate just how effective lead magnets can be. You should know they attract the best subscribers — people who are more likely to open, read, and act on your emails.

Our founder, Travis Ketchum, spent a long time perfecting his methods to achieve outstanding results from his lead magnet campaigns. And we’d like to share everything he learned in a mini-course with you, FOR FREE

We’d like to introduce the Lead Magnet Multiplier program — a series of 4 video tutorials that will teach you how to achieve 8x the signups you’ve managed from lead magnets before. There’s no catch; the videos are free, detailed, and you don’t have to buy anything. 

Our only request is that you finish the course in 7 days if you wish to retain access forever. We put this clause in place because we only want to share this knowledge with truly passionate email marketers.

If that’s you, sign up for the Lead Magnet Multiplier course today!

Lead Generation Costs

It comes down to your choice of lead generation method, but here are examples of a few popular methods:

  1. Popup forms, like OptinMonster or Poptin, can cost you about $20 a month.
  2. Running lead-generation ads on Facebook is possible at a CPC of $0.40 – $0.65.
  3. Acquiring a lead via Google Ads can cost you about $40.74.
  4. If you run contests or giveaways on social media and encourage reposting for reach, your only cost is the gift you’re giving away.
  5. You can use different types of content as lead magnets — ebooks, how-to guides, video tutorials, whitepapers, case studies, or samples of your product. These are fairly inexpensive.

Hiring an Email Marketing Manager

If you decide you can’t run your email campaigns due to the time commitment required, you’ll need to hire a manager.

An email marketing manager is the person who handles all things related to sending emails for your business. They create the content, decide who gets what email, and analyze how well it’s all working. 

In certain cases, email managers are also involved in the strategy part.

Think of them as the behind-the-scenes operator making sure your inbox game is on point. They keep an eye on trends, know the tech, stick to your budget, and understand what makes your audience tick. Typically, they have to segment your lists, plan the content schedule, and coordinate with different stakeholders before they design the email content

They also ensure your email campaigns are smoothly sent from your ESP and submit reports on how the campaigns are performing.

It’s not just about hitting “send” but making sure those emails are interesting enough that people want to open them. It’s a mix of creativity and data crunching to keep your emails from being just another unread message.

Email Marketing Manager: Costs

As for costs, it comes down to whether you hire a full-time email manager or a freelance email marketing expert from freelancing websites. If you hire a full-time employee, you can expect to pay anywhere between $64,000 to $110,000 in the US. Note that hiring a remote worker from a different country can bring this cost down by 40-60%.

The range for freelance email managers is a bit all over the place — you can hire one for as cheap as $10 an hour to $250 an hour for an experienced freelance email marketer. Select freelance specialists also charge per email sent.

Task Management Tools: Pricing

If you subscribe to task management software, like Monday or Asana, this can cost you between $8 to $10 a month per user for small teams

Quality Graphic Design Costs Money

When you bring a graphic designer into your email marketing team, you’re essentially getting a visual storyteller on board. This creative mind takes your ideas and weaves them into eye-catching designs that speak volumes without saying a word. 

They’re the ones making sure your emails look sleek, professional, and, most importantly, aligned with your brand vibe. It’s not just about slapping on pretty images; they understand the psychology behind visuals and how they connect with your audience. They’ll make sure your emails deliver a visual impression that sticks.

Here are the benefits:

  1. A graphic designer enhances the visual appeal of your emails.
  2. They ensure your email designs align with your brand guidelines.
  3. Designers use visual elements to convey messages more effectively.
  4. Professionally designed emails stand out in crowded inboxes.
  5. Graphic designers can optimize email designs for various devices.
  6. Visual elements strategically designed by a graphic professional can contribute to improving conversion rates.
  7. Hiring a graphic designer lets you focus on other business aspects.
  8. The expertise of a graphic designer brings a level of professionalism to your email marketing.

Hiring a graphic designer isn’t mandatory though; you can use the template library provided by your ESP and modify designs for your campaign. Alternatively, you could sign up for a service that sells email templates, like Stripo — but it’s not cost-effective in the long run. Plus it could be challenging to resolve visual bugs once you import them to your email platform. Another great option is Really Good Emails, which lets you access their library of +10,000 email templates for $9 a month.

You could also try creating your own templates!

Graphic Designer: Costs

If you do decide to hire a graphic designer, you can either hire an employee or a freelancer. A full-time graphic designer can cost you between $45,000 to $70,000 a year.

Comparatively, you can hire a freelance designer for anywhere from $15 to $50 per hour, depending on their experience. 

Design Tools: Cost

Most designers use Adobe’s Creative Suite, which will cost you $38 a month. Adobe’s biggest competitor, Figma, charges similar rates

If you want to subscribe to a stock photo service, this can set you back by $50 a month for Shutterstock and if you want graphical elements, you can opt for Canva, which charges $30 per month for the Pro version.

Good Copywriting Pays for Itself

Hiring a writer for your email marketing needs is a smart move because words matter. A skilled writer brings more than just proper grammar to the table; they infuse your emails with personality, resonance, and persuasion. They understand the nuances of writing copy that gets opened and prompts readers to act. And they do all this while sticking to your brand guidelines!

Whether it’s a witty subject line or a compelling CTA, a good copywriter can make your message stand out in crowded inboxes. They tailor content to your audience, building a connection that goes beyond the sale. It’s not just about words; it’s about creating a narrative that leaves a lasting impression.

Writer/Copywriter: Costs

You can hire a freelance copywriter for anywhere between $15 to $45 an hour, but based on experience, it can get as expensive as $250 for the best copywriters. Hiring a full-time writer in the US can set you back as much as $65,000 a year

You could also hire international copywriters to work remotely for much less — say, between $12,000 to $15,000 a year. This number can change depending on the writer’s work experience and the complexity of your industry.

If you’re linking to blog posts on your website, you may need to hire a freelance content writer to write your articles. The hourly rates for content writers are similar to copywriter rates.

Content Tools: Costs

Thankfully, there are plenty of excellent editing apps that are free, so you can skip out on this expense by choosing a service like Google Docs or Notes for articles. If you need additional tools like Grammarly Premium (for grammar) or Frase (SEO optimization for your content), this will set you back by $15 for each service.

Picking an Email Service Provider

Once you have your staff in place, it’s time to sign up with an ESP or find an email deliverability service to partner with. This is where you decide which email platform has all the features you want but does not blow up your budget.

Here are the factors to consider:

DeliverabilityHow good is the ESP’s inboxing rate? This is the first question you must ask.
User interfaceLook for an intuitive interface that facilitates easy navigation and setup. Consider a user-friendly dashboard.
Template libraryAssess the variety and quality of pre-designed templates. Customizability is crucial for brand consistency.
AutomationEnsure the platform offers robust automation tools for drip campaigns, personalized workflows, and segmentation.
List management toolsCheck for easy list import/export, segmentation abilities, and tools for managing subscriber preferences.
A/B testing toolsA/B testing lets you test two or more versions of an email with each version having a slight difference in elements like subject lines, copy, images, CTAs, or other components.
Integration with third-party marketing toolsConfirm compatibility with your existing tools and platforms, such as CRM systems, analytics, and e-commerce.
Analytics dashboardEvaluate the reporting features, focusing on metrics like open rates, click-through rates, and conversion data.
Customer careChoose a provider with responsive and helpful customer support, including resources like guides and tutorials.
ScalabilityConsider your future needs and choose a provider that can scale with your growing email marketing requirements.
ComplianceEnsure the provider complies with data protection regulations (for example, CAN-SPAM) and maintains robust security measures.
PricingCompare pricing plans, taking into account your budget and the features offered. Be wary of hidden or extra fees.
Choosing the right email service provider

After you decide on the features you want your email platform to have, it’s time to begin research on which ESP to sign up with. We’ve provided a few popular options in the next section.

Email Service Provider: Costs

Wondering how much your ESP will cost you? That depends on the volume of emails you plan to send and the features you want, so you’ll have to choose an appropriate plan.

Here’s a table comparing how much you’ll pay every month for these well-known ESPs:

ESPUnlimited ContactsBasic paid plan subscriptionCost to email 50k contactsDeliverability
Moosend$9/mo 500 contacts$207/month😁😁
Campaign Refinery$99/moUnlimited contacts$99/month😁😁😁
Constant Contact$12/mo500 contacts$430/month😁😁
Hubspot$20/mo1,000 contacts$816/month😁😁
Mailchimp$4.60/mo500 contacts$275/month😁😁
Active Campaign$29/mo1,000 contacts$389/month😁😁
Klaviyo$20/mo500 contacts$720/month😁
Keap$199/mo1,500 contacts$479/month😁
Campaign Monitor$11/mo500 contacts~$349/month😁
Comparing costs of top email service providers

Note that a lot of the base plans don’t include various features, so these prices are for the bare minimum features. Ensure you compare the different pricing tiers thoroughly before you make a decision.

At Campaign Refinery, we didn’t hold back on the features — regardless of your plan, you get full access to all the email tools that top tiers enjoy.

Transactional Emails Cost Extra

One “hidden” cost you may not have considered is the number of transactional emails each month. 

These emails are automated messages recipients receive after performing specific actions on your websites or apps. They serve practical purposes, such as confirming a purchase with an order receipt, providing shipping updates, or resetting a forgotten password. 

These messages focus on delivering necessary information and if you glance at your inbox, you’ll realize almost every business sends these out diligently. They keep users informed about their transactions and account activities.

To get an idea of how many transactional emails you’ll send in a month, evaluate how many times you wish to update a customer after a purchase (shipping updates or confirmation emails), and multiply that by the number of transactions you do every month. Note that you will need to account for new account creations and password resets, too.

Email Marketing Agencies: Are They Cheaper?

The only scenario where hiring an email marketing agency makes financial sense is if you have extremely ambitious goals and need assured results from experts, or simply don’t have the time to deal with freelancers or an in-house team.

You can hire email marketing agencies under different payment methods:

  1. Monthly/yearly retainer,
  2. Pay-per-email,
  3. Pay-As-You-Go,
  4. Custom pricing.

The advantage of hiring an agency to take on your email marketing is that you can leave it in the hands of professionals and simply review performance periodically. With an in-house team or freelancers, you are a lot more involved, but that has its own set of advantages

Let’s compare these two scenarios:

ItemEmail Marketing AgencyIn-House Team
ExpertiseBrings specialized knowledge and experience in email marketing.Requires hiring individuals with email marketing skills.
CostsCan be cost-effective, depending on the scale of your operations.Could involve higher upfront costs for salaries and training.
ScalabilityOffers flexibility to scale up or down based on campaign needs.Allows direct control over team size and workload.
Tools/technologyOften has access to advanced tools and technologies.Requires investment in tools and software for the team.
Data securityCustomer data is at risk when working with an agency.By keeping your customer data with your internal team, it can be more secure.
ImplementationCan quickly implement campaigns without the need for hiring.May take time to hire and fine-tune an effective in-house team.
VisionProvides an external, objective viewpoint on your marketing strategy.Internal team will have an in-depth understanding of your business.
CommunicationRequires effective communication and collaboration with the agency.Convenient for direct communication as the team is within your organization.
ResponsivenessCan quickly respond to changes in campaign strategy and tactics.May have slightly slower response times due to internal processes.
Email Marketing Agency vs In-house Email Marketing Team

If you do decide to work with an agency, the costs can vary wildly as agencies don’t offer standardized prices. We do have an idea of the ranges, so we listed them below.

Email Marketing Agency: Costs

Here are a few examples you can look at:

  • Inbox Army, LLC: Less than $10,000/month.
  • Rejoiner: $10,000 to $50,000/month.
  • Social Bloom: Less than $10,000/month.

As you can see, agencies are expensive — but there’s still a demand for them, so clearly there are clients who benefit from their services.

Email Marketing: The Biggest Investment is Time

This is a tricky one to calculate; how do you place a premium on time?

Running your own email marketing is budget-friendly, but if you’re running a business, there can be other, more demanding tasks that need your attention. Email marketing can quickly take up your daily hours, so let’s break it down as best as possible.

First, you’ll need to allocate time to develop a comprehensive email marketing strategy. This includes defining goals, identifying target audiences, and planning the content and frequency of campaigns. Next, you’ll need to create compelling email content — you’ll have to write clever copy, design visually appealing layouts, and create attention-grabbing subject lines; each aspect can be time-consuming.

Another task that needs attention is the maintenance of a clean and segmented email list. You need to allocate time for list management tasks, such as handling subscriptions, removing inactive users, and ensuring compliance with privacy regulations.

After this, you must schedule and deploy email campaigns. Set aside time to test and monitor the delivery of campaigns to ensure they reach the intended audience. But you’re not done yet! You have to regularly analyze email performance metrics to optimize future campaigns. You have to continually review open rates, click-through rates, and conversion data to refine your email marketing strategy.

Now throw in customer responses, feedback, and inquiries — responding is necessary, as it contributes to a positive customer experience. You must ensure you’re up to date with the latest trends in email marketing, too.

If that sounds like a lot of man-hours, you’re spot on. Remember, this is the scenario when everything is running smoothly — if unforeseen issues arise, like technical glitches or unexpected negative feedback, you should address them promptly.

Email Marketing Cost Per Month

So we have listed all the different components that come together to complete your vision for email marketing, but how much will it add up to per month? That, of course, comes down to which options you pick for each of the sections above, but let’s calculate the costs for a basic email marketing setup. We used Campaign Refinery as the ESP to calculate the cost per email.

Fixed Monthly Expenses

  1. If you hire a remote email marketing manager for $20k a year, this should cost you approximately $1,666 per month.
  2. At Campaign Refinery, the basic plan, which lets you add unlimited contacts, costs $99 a month.
  3. Hiring a remote copywriter at median rates should cost you about $1,000 a month.
  4. You can go for Really Good Emails instead of a designer at the beginning, which will cost you $9 a month. This also saves you subscription charges for design apps.
  5. Task management software to manage your team will cost you $10 every month.
  6. For lead generation, use a lead magnet. After you finish the Lead Magnet Multiplier course, it’s the only lead-gen tool you will need. Cost: Free.
  7. Also add pop-up forms to your website using OptinMonster at $20 a month.

This puts your monthly fixed overheads for email marketing at $2,804 per month.

Variable Expenses

Let’s, thanks to your lead generation efforts, 5000 people sign up to your email list. You must send them a welcome email and maybe four more marketing emails for the rest of the month.

In total, you have to send an opt-in/confirmation email, a welcome email, and four marketing emails to each subscriber — that’s 30,000 emails. Let’s add another 2,000 transactional emails for orders, forgotten passwords, and shipping updates. That’s 32,000 emails per month in this hypothetical example.

With Campaign Refinery, the basic plan lets you send 50,000 emails every month, which means you don’t have to spend any more money. This is why choosing the right ESP is critical!

So now your total monthly cost for an email marketing operation is approximately $2,804 per month. As long as you send up to 50,000 emails per month via Campaign Refinery, this is what you will need to spend. 

This puts your cost per email at $0.05.

On any other platform, the costs would be significantly higher, as most ESPs charge for your list size and for email volume. Using our credit system, you can simply pay for the emails you send — and the best part is that you get maximum value for money thanks to our amazing deliverability rates.

Next, let’s look at reducing these costs efficiently.

How to Reduce Email Marketing Expenses

You can achieve lower email marketing costs through various strategies aimed at optimizing efficiency. 

Here are sensible methods to reduce costs:

  • Do the math between paying freelancers on an hourly basis versus having an in-house email marketing team. The cost-effectiveness can vary greatly depending on your specific requirements.
  • Decide your volume of emails and the number of contacts before signing up with an ESP.
  • Target specific segments of your audience with tailored messages. This can make your campaigns more cost-effective.
  • Regularly clean your email list to remove inactive or unsubscribed users. An additional benefit of this is improved deliverability rates.
  • Use marketing automation tools to streamline repetitive tasks — it can save time and reduce manual labor costs.
  • Take advantage of free or affordable stock photos, design tools, and email templates. There are many resources available that can help you create visually appealing emails without breaking the bank.
  • Negotiate pricing with your ESP, especially if you have a large subscriber base. ESPs offer discounts or customized plans based on your needs.
  • Improve your sender reputation to ensure your messages reach the inbox. This can reduce the need for additional services to manage deliverability issues.
  • Review your marketing technology stack regularly and eliminate tools or services that are not providing sufficient value.
  • Conduct A/B tests to optimize performance without spending significant resources on unproven strategies.

Remember — the key to successful email marketing is not just reducing costs but achieving a balance between cost-effectiveness and the delivery of compelling, targeted messages that resonate with your audience.

Campaign Refinery: Quality Meets Value for Money 

You will notice a key difference between Campaign Refinery and its competitors; we don’t charge you for having a large list of contacts, which greatly reduces your email marketing costs. We charge you for the emails you send, so you pay for what you use — no more, no less. 

And we ensure you won’t waste your budget sending emails to invalid mailboxes either. Our automated list-cleaning feature is incredibly powerful, removing spam traps, bot emails, role-based emails, complainers, and other problematic IDs. These email addresses can be a significant drain on your resources, so this feature is a blessing for our clients!

What else does an email marketer want?

Excellent inboxing rates, of course. Our deliverability is the best in the biz — everything we do here at Campaign Refinery is keeping sender reputation in mind. In fact, we even created an approval system for customers so that we don’t sign up with any problematic senders that could affect the superb reputation we enjoy with mailbox providers. So feel free to focus on your content — we’ll take care of getting your messages to your subscriber’s inbox.

As for our UI, the simplicity saves you both money and time. You won’t struggle to figure out how things work and neither will your email manager. Our analytics dashboard is just as intuitive; you will only see the patterns you need to. 

Our other premium features include:

  • Powerful automation tools,
  • Evergreen Flash Sales, to drive conversions,
  • Branch & Rule Builder, for conditional campaigns,
  • Tag-based system and flexible segmentation tools,
  • Support for thousands of popular marketing plugins,
  • Gamification — see your engagement rates bloom.

It’s as good as it sounds. Sign up to become a Campaign Refinery customer today!

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