Email marketing ROI is the profit your emails bring in for every dollar you spend on them, so it tells you whether email deserves more budget, the same budget, or a hard look. The formula is simple: email revenue minus email cost, divided by email cost.
The hard part is being honest about both numbers. Your platform's attributed revenue is usually generous, and the cost line usually forgets people and tools (and yes, your own time counts).
How common is a good return? In the Litmus summary of its 2025 State of Email report, 35% of marketing leaders said they get $10 to $36 back for every $1 spent on email, and 21% said they don't measure email ROI at all.
I build and run Klaviyo accounts for ecommerce brands at Inbox Connect, and the ROI review is where I start when a founder asks if email is pulling its weight. You'll learn the formula, what to count as revenue and cost, how to read benchmarks, and the monthly review I run.
By the end, you'll have a number you can defend to a partner or an accountant. Grab last month's numbers, and let's start with the formula.
In this article
- The email marketing ROI formula
- What counts as email revenue
- What counts as email cost
- A worked example
- What is a good email marketing ROI?
- How do you raise your email ROI?
- The monthly ROI review I run
- FAQ
- Final Thoughts
The email marketing ROI formula
Email marketing ROI equals email revenue minus email cost, divided by email cost, then multiplied by 100 to turn it into a percentage. A return of 1,000% and a ratio of 10:1 describe the same result, so use whichever one your team already reports in.
Here's the formula written out:
ROI = (Email Revenue - Email Cost) / Email Cost x 100
You'll also see people quote "return per dollar," like $36 for every $1. That number is revenue divided by cost, so it skips the subtraction and always reads one point higher than the ratio version ($36 per $1 is a 35:1 net return).
Pro tip: Pick one version, write it at the top of your reporting sheet, and never switch. Plenty of ROI arguments are really two people quoting different versions of the same number.
What counts as email revenue
Email revenue is the money from orders your email platform credits to a send inside its attribution window. That window decides most of your ROI before you touch the formula, so you need to know what yours is set to.
Klaviyo is a good example. Its message attribution guide says new accounts use last-touch attribution with a 5-day window for email clicks and a 5-day window for email opens, so a purchase within five days of an open can count as email revenue.
Opens are the soft spot. Apple Mail Privacy Protection can register opens that no person made, and a customer who would have bought anyway can still get counted as an email sale.
So when I run an ROI review, I report two revenue numbers side by side. One is the platform's default attributed revenue, and the other counts click-based orders only.
Weak revenue number: "Klaviyo says email drove $48,000 last month, so email is 40% of the store."
Strong revenue number: "Klaviyo's default model credits $48,000, and click-only attribution credits $31,000. I'll report the range and judge email on the lower figure."
The gap between those two numbers tells you how much of your "email revenue" is leaning on opens. If you want the longer explanation of models and windows, my guide to revenue attribution walks through last touch, first touch, and multi-touch.
Pro tip: Klaviyo lets you preview a model change with its Compare model tool before you save it, according to its attribution settings guide. Use the preview to see your click-only number without changing what the rest of the team sees.
What counts as email cost
Email cost is everything you pay to plan, build, send, and grow email, for the same period as your revenue. Most ROI numbers look amazing because this column only lists the software bill.
The cost lines you should include are these:
| Cost line | What goes in it | Easy to forget? |
|---|---|---|
| Email platform | Your monthly Klaviyo, Mailchimp, or beehiiv bill | No |
| SMS sending | Message credits if SMS runs in the same flows | Sometimes |
| People | Your own hours, a staff member's share, or a freelancer | Yes |
| Agency or managed service | A retainer for strategy, copy, design, and sends | No |
| Design and apps | Template tools, review apps, popup or quiz apps | Yes |
| List growth | Ad spend or giveaways whose main goal is new subscribers | Yes |
| Discounts | The value of codes handed out only through email | Very often |
People are the easiest line to skip. If you write the emails yourself, put a fair hourly rate on that time, because an ROI that only works when your time is free isn't a real return.
Hiring help goes in the same column. An agency retainer or a freelancer's monthly fee is a cost line like any other, and the ROI has to clear it before email counts as profitable.
Platform cost also moves with your list size. Klaviyo's pricing page sizes plans by active profiles (contacts who may receive marketing email), so a bloated list raises the bill even when those contacts never buy.
Pro tip: Count email-only discounts as a cost, not as lower revenue. If a welcome code gives away $3,000 in a month, you want to see that number on its own line when you decide if the code still earns its place.
A worked example
Here's a made-up store so you can see the math with real-looking numbers. Swap in your own figures as you read.
The example store sells apparel and spends the following in one month on email:
| Line | Amount |
|---|---|
| Klaviyo plan | $400 |
| Freelance copy and design | $1,200 |
| Owner's time (10 hours at $50) | $500 |
| Email-only discount codes | $900 |
| Total email cost | $3,000 |
| Default attributed revenue (5-day opens and clicks) | $30,000 |
| Click-only attributed revenue | $21,000 |
Using the default revenue number, ROI is ($30,000 - $3,000) / $3,000 x 100, which is 900%. Using click-only revenue, it's ($21,000 - $3,000) / $3,000 x 100, which is 600%.
Both numbers say email is working for this store. The difference is how much weight you can put on it when you ask for more budget, and 600% is the one I'd defend in a meeting.
Notice what happens if you leave out the freelancer, the owner's time, and the discounts. Cost drops to $400 and the "ROI" jumps to 7,400%, which is exactly the kind of number that gets quoted and then falls apart under one question.
What is a good email marketing ROI?
A good email marketing ROI is one that beats your own last quarter after counting full costs. Outside benchmarks help you sanity-check your number, but they were built on different stores, prices, and attribution settings.
The benchmarks worth knowing come from Litmus surveys of marketers:
| Source | What it reports |
|---|---|
| Litmus 2025 State of Email (via its ROI summary) | 35% of marketing leaders get $10 to $36 per $1, 30% get $36 to $50, and 5% get more than $50 |
| Same summary | 21% of marketing leaders don't measure email ROI |
| Litmus 2020 State of Email survey (same page) | Retail, ecommerce, and consumer goods 45:1; marketing agencies 42:1; software 36:1; media and publishing 32:1 |
Those are self-reported numbers from marketers, and the industry figures are from 2020. Treat them as a rough range, not a target you failed to hit.
Weak benchmark reading: "Litmus says retail gets 45:1 and we got 12:1, so our email is broken."
Strong benchmark reading: "We got 12:1 on click-only revenue with full costs, up from 8:1 last quarter. We're inside the range most marketers report, and moving the right way."
If you want to compare engagement rather than money, the open rate benchmark tool and my post on email marketing benchmarks by industry cover that side. For the rest of the scorecard, my guide to email marketing KPIs covers the 12 numbers worth tracking next to ROI.
How do you raise your email ROI?
You raise email ROI by growing revenue from the same list or by cutting cost that isn't producing anything. In practice, I look at four places, in this order.
1. Fix the flows before you add campaigns
Flows (welcome, abandoned cart, browse abandonment, post-purchase, win-back) keep earning after you build them once. If one is missing or misfiring, every campaign you add is working around a hole, and my email marketing automation strategy guide shows which flows to build first.
An email automation audit is the fastest way to find those holes. Klaviyo's own abandoned cart flow guide, for example, recommends a "Placed Order zero times since starting this flow" filter so buyers don't get a reminder for something they already paid for.
2. Split revenue by flows versus campaigns
Look at what share of email revenue comes from flows and what share comes from campaigns. If campaigns carry nearly everything, revenue stops the day you stop sending, and that's a fragile return.
Pro tip: Divide each flow's revenue by the number of people who received it. Revenue per recipient shows you which flows deserve a rewrite and which ones you should leave alone.
3. Trim the list you're paying for
Contacts who haven't opened or clicked in months still count toward your plan size, and they drag down engagement for everyone else. A written email sunset policy removes them on a schedule after one last re-engagement attempt.
This is one of the few ROI moves that cuts cost and protects deliverability at the same time. It also makes your per-recipient numbers honest.
4. Test for revenue, not opens
A subject line test that wins on opens can lose on orders. Judge tests on revenue per recipient or placed order rate, and use the A/B test calculator to check that the winner isn't just noise.
Not sure where your setup is losing money? The email revenue leak calculator gives you a quick score and a list of the next fixes to build.
If you'd rather have a person look, request a paid Email DDx audit and fix and you'll get a ranked list of fixes for your Klaviyo account.
The monthly ROI review I run
A monthly review is often enough to see trends without reacting to one good or bad send. I block about an hour in the first week of the month and work through the same steps each time.
- Pull Revenue Two Ways: Export default attributed revenue and click-only revenue for last month.
- Update the Cost Sheet: Add the platform bill, people time, retainers, apps, list growth spend, and email-only discounts.
- Calculate Both ROI Numbers: Write the range down next to last month's and the same month last year.
- Rank Flows by Revenue per Recipient: Flag the bottom two for a rewrite or a filter check.
- Pick One Fix: Choose a single change for the month (a flow repair, a list trim, or one test) so next month's number tells you if it worked.
Weak review: Screenshot the dashboard's revenue total, post it in Slack, and move on.
Strong review: Report a click-only ROI range with full costs, name the weakest flow, and commit to one fix with a date.
Pro tip: Keep last year's same-month number in the sheet. Seasonal swings (November versus February, for example) make month-over-month comparisons misleading for most stores.
FAQ
What is the formula for email marketing ROI?
Email marketing ROI is (email revenue minus email cost) divided by email cost, multiplied by 100. A store that spends $3,000 and earns $21,000 from email has an ROI of 600%.
Is $36 for every $1 still a real benchmark?
It's a real survey figure, but it's a midpoint rather than a promise. In the 2025 Litmus data, 35% of marketing leaders reported $10 to $36 per $1 and 30% reported $36 to $50, while the industry ratios near 36:1 come from a 2020 survey.
Should I count opens in email attribution?
Count them, but don't rely on them alone. Report a click-only number next to the default, because privacy features can register opens no person made.
How often should I calculate email ROI?
Monthly for the program, and per campaign for big moments like a launch or a Black Friday sale. Quarterly comparisons against the same quarter last year smooth out seasonal swings.
What tools do I need to measure email ROI?
Your email platform's attribution reporting, your store's order data, and a simple spreadsheet for costs. Google Analytics with UTM-tagged links helps you cross-check what the email platform claims.
Final Thoughts
You now have the full method: one formula, revenue measured two ways, every real cost in the cost column, and a monthly review that turns the number into one fix at a time. My recommendation is to judge email on click-only revenue with full costs, because that's the number that survives a hard question.
Your next step is to open last month's numbers today and fill in the cost table above, including your own hours. If the ROI comes out lower than you expected, start with an email automation audit to find which flow is leaking first.
If you'd rather hand the fixes off, my Klaviyo agency team builds and runs flows like these for ecommerce brands.
Russ