How much revenue should come from email marketing? Should it be at least 30%? Where does this benchmark even come from?
I'd say many ecommerce marketers don’t have a solid grasp of email marketing metrics. Some are just starting out; others lean too heavily on certain numbers, and plenty misuse or misinterpret them altogether. What’s more, it’s not just in-house teams—this confusion can happen with email agencies, too. And sometimes, people who don’t fully understand the metrics still pass around advice like they’re pros.
That's why I've decided to write the "How to evaluate email marketing" series. This series will include dedicated posts on email marketing analytics: revenue-related metrics, list growth metrics, deliverability and engagement, and retention.
Today's post will be all about revenue-related metrics. Let's get started!
1. Revenue
Revenue is the metric business owners love the most. It answers this question: How much overall revenue did email marketing bring in over a week, a month, a quarter or any specific period you want to measure?
Here’s a word of caution, especially for business owners and managers planning to hire an email marketing agency. You might come across flashy profiles on LinkedIn or Twitter boasting headlines like:
“Helping Clients Generate $75M from Email Marketing…”
Sounds impressive, right?
But it’s easy to fall into the trap of blind trust. Don’t. Just. Believe. It.
Anyone experienced with email marketing metrics and numbers would immediately call “B.S.” on posts like the above. I’m not claiming to be a top-tier expert, but having worked at an ecommerce agency and with brands, I’ve spent countless hours using tools like Klaviyo. I’ve seen enough to know such claims are just marketing fluff.
Why These Claims Are Misleading:
The context gap: A figure like $75M might seem huge for a small business but trivial for a global corporation. Without context, these numbers are meaningless.
Aggregated data: Is the $75M the total revenue from multiple brands? How many subscribers did each brand have? How much of that revenue came from email, and how much from other marketing efforts? Product types, audience characteristics, and sales strategies vary widely, so results are rarely comparable.
Fundamental processes are the same: Whether you’re running a startup or managing a billion-dollar company, the foundational processes for email marketing—flows and campaigns—remain broadly consistent. The difference lies in tailoring these strategies to each business’s unique context. Revenue numbers alone don’t capture the quality of the strategy or work behind the scenes.
Risk of misinterpretation: Highlighting revenue figures without explanation can mislead readers into thinking that replicating a strategy guarantees success. In reality, each business has different needs, goals, and markets. There’s no one-size-fits-all formula.
The key takeaway is revenue is a key metric, but without context, it’s just a vanity metric. It sounds awesome but says nothing about the real impact of email marketing efforts.
2. Placed Order Rate
Placed Order Rate is the conversion rate for email campaigns. It calculates the percentage of email recipients who make a purchase. This metric is typically analysed at the campaign or email flow level.
3. Average Order Value (AOV)
Average Order Value (AOV) represents the average revenue generated per order. It’s calculated as:
AOV = Total Revenue ÷ Total Number of Orders
AOV can be measured for individual emails, specific campaigns, or across all emails sent over a particular time frame. It can provide profound insights into customer behaviour, product pricing strategy, and campaign effectiveness.
For instance:
Emails promoting bundled products or upsells often result in a higher AOV.
Discounts or promotions may lower AOV temporarily, but they can help acquire new customers.
4. Revenue Per Recipient
Revenue Per Recipient (RPR) measures how much revenue is generated for every email recipient. You can use the following formula to calculate RPR:
RPR = Total Revenue from Email ÷ Total Number of Recipients
For example, if you send an email to 100,000 people and generate $5,000 in revenue, your RPR is $5,000 ÷ 100,000 = $0.05 per recipient.
On the surface, RPR seems like a clean, straightforward way to evaluate the monetary impact of your email campaigns. It’s no wonder many marketers and agencies love emphasising this metric in reports—simple, intuitive, and often impressive-looking.
However, RPR can also be deceptively misleading if not interpreted carefully. Here’s why:
First, Not All Emails Are Sales-Focused
RPR assumes the primary goal of every email is to generate revenue. But this isn’t always true. Some emails aim to build brand awareness or provide updates, not drive direct sales. A low RPR for these emails doesn’t indicate failure.
Second, RPR is Skewed by Discounts and Promotions.
RPR is highly influenced by promotional activities.
During a sale or discount-heavy month, RPR naturally spikes.
Flow emails like Welcome Series or Cart Abandonment often include discounts, which inflate RPR compared to regular campaigns.
These spikes make RPR unreliable for evaluating actual performance.
Third, Audience Relevance Matters.
If your RPR is low, it could mean:
Emails are being sent to disengaged audiences.
Your email list quality is poor and filled with unqualified or inactive subscribers.
Email content isn’t compelling, leading to low conversion rates.
Fourth, RPR Can Mask Performance Context.
A steady RPR increase could just reflect short-term promotional boosts. Comparing RPR to other channels, like paid ads, may feel encouraging, but it lacks nuance about long-term email performance.
RPR Isn’t a Friend or a Foe!
RPR can be helpful, but only in specific contexts. Hence, you should use it wisely:
Pair RPR with metrics like conversion rate and engagement to get a fuller picture.
Always factor in the goals of each email campaign before concluding.
Be cautious of promotions or discounts that skew results.
5. % Revenue from Email/Total Revenue
It’s common to see claims like this from agencies or marketers:
“Email should contribute 30-50% of your total business revenue, and we can help you achieve this!”
But let me tell you—this is often another example of misleading marketing fluff.
The numbers you see in tools like Klaviyo or similar platforms aren’t always accurate. They can often overestimate revenue attribution. Sometimes, Klaviyo reports revenue numbers that are higher than what Shopify does or in your actual bank account.
First, Attribution Windows Vary Across Platforms.
Every platform uses different methods to attribute sales.
Klaviyo, Shopify, Meta Ads, Google Ads, and even reporting tools like Triple Whale all calculate conversions differently. 1-day view and 7-day click, 5-day email clicks and 5-day email opens, or 2-day email clicks and 2-day email opens... Even with stricter attribution settings, the numbers aren’t 100% reliable.
Second, Overlapping Attribution.
A single order might be claimed by multiple platforms. For example:
A customer sees your Instagram ad and visits your site but doesn’t purchase.
The next day, they receive an email and click through, but still don’t purchase.
Two days later, they search for your brand on Google, find a sale, and buy.
In this scenario, Meta Ads, Klaviyo, and Google Ads might "claim" the sale, leading to inflated numbers.
The Pitfall of Over-Reliance on Email Revenue.
Imagine email making up 70% of your total revenue. Even when you turn off all other marketing channels, email might still maintain that revenue share. Sounds fantastic, right?
Not so fast—this scenario highlights deeper issues:
First, other channels aren’t performing well: If email carries most of your business revenue, it’s likely because your other marketing channels (e.g., paid ads, SEO, social media) are underperforming.
Lack of new customer growth: Email is an excellent retention tool, but it’s not designed to acquire new customers. If most of your revenue comes from existing customers, it might signal stagnation. Growth depends on new subscribers, which are heavily influenced by traffic from other channels. If your email revenue is overly dominant, it’s a sign you’re missing out on opportunities to grow and scale your business through a well-rounded, multi-channel strategy.
6. Revenue from New Customers vs. Existing Customers
Revenue generated by new customers versus existing customers reveals whether your email strategy effectively balances customer acquisition with retention.
Imagine your monthly email revenue is $100,000, and your new subscriber count has surged. If 90% of that revenue comes from existing customers, what does this tell you?
Your retention efforts might be solid, but you’re likely struggling to convert new subscribers into paying customers.
New subscribers signing up but not making purchases could indicate the following:
Unengaged or unqualified subscribers: Your email list might include people who don’t genuinely care about your brand (e.g., joined for a discount code but never intended to buy).
Ineffective welcome flow: If your initial emails fail to capture attention or build trust, you’ll struggle to convert new subscribers into buyers.
The goal: balance revenue sources. Retention and acquisition aren’t opposing forces—they should work together to fuel your success.
7. Customer Lifetime Value (LTV)
Customer Lifetime Value (LTV) represents the total revenue a customer is expected to generate over the entire time they engage with your business. In simpler terms, it’s the long-term value a customer brings.
LTV can be divided into:
Historical LTV: The total amount a customer has spent to date.
Predicted LTV: An estimate of how much they’re likely to spend in the future.
To calculate LTV, use this formula:
LTV = AOV × Purchase Frequency × Customer Lifespan
AOV: How much does the customer spend per order?
Purchase frequency: How often do they make a purchase?
Customer lifespan: How long do they stay engaged with your business before stopping?
Understanding LTV can help you decide how much to invest in acquiring and retaining customers.
For example, if a customer’s LTV is $500, spending $50 to acquire them might be a great ROI. It also helps you identify opportunities to increase revenue from current customers.
You can also use LTV to maximise revenue per customer. When you know a customer’s potential value, you can focus on strategies like upselling, cross-selling, or subscription models to boost that value.
However, note that relying on LTV too heavily can lead to missteps:
Ignoring the full customer lifecycle: Customers don’t always shop on predictable timelines. For example, a lull in purchasing activity doesn’t necessarily mean they’ve lost interest—it could simply reflect longer buying cycles. Misjudging this can result in prematurely abandoning valuable customers.
Overemphasis on new customers: Some businesses focus too much on acquiring new customers, chasing short-term LTV gains. This can lead to neglecting existing customers, who are often easier and cheaper to retain.
Failing to optimise for retention: Acquiring a new customer can cost 5–7 times more than retaining an existing one. Without a retention strategy, you risk losing customers who would otherwise generate significant LTV over time.
8. Flow Revenue và Campaign Revenue
In email marketing, revenue is typically categorised into two streams:
Campaign revenue: Generated from one-off email campaigns sent to a broader audience, including new and existing customers. These are time-sensitive and often tied to events like promotions or launches.
Flow revenue: Generated from automated email sequences triggered by customer actions, such as cart abandonment, post-purchase follow-ups, or welcome series.
Marketers often debate which should generate more revenue. There are three common schools of thought:
Flow revenue = Campaign revenue
Campaign revenue > Flow revenue
Flow revenue > Campaign revenue
Which one is the best practice? None of them.
The proportion of revenue from flows versus campaigns depends on several factors:
The type of business you run.
The products you sell.
Your audience demographics and behaviour.
Your goals during specific phases of business growth.
Flows will likely drive more revenue for a sustainable brand that rarely runs sales or promotions. Flows such as welcome emails, cart abandonment, and post-purchase sequences effectively engage existing customers and nudge them toward purchases without discounts.
However, campaigns will likely generate more revenue if your business relies heavily on sales and promotions. These one-off emails are designed to maximise urgency and conversions during specific time windows.
Other scenarios: If your revenue primarily comes from new customers, prioritise campaigns. If your revenue depends on existing customers, flows are your strongest asset.
Note that there are some exceptions. For example, for short product lifecycles (e.g., fashion, cosmetics), flows can consistently engage customers and drive repeat purchases. Also, campaigns allow more freedom for creative design and messaging, while flows often have a set structure that limits flexibility.
Final Thought
Metrics are crucial for evaluating the performance of your email marketing efforts. They provide insights into what’s working, what needs improvement, and where opportunities lie. You need a deep understanding, not just a surface-level grasp, to truly benefit from email marketing analytics.
Are you looking to refine your email marketing strategy or outsource the process to an expert? I can help. Book a free 30-minute discovery session with me, and let’s discuss how we can supercharge your email revenue.
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