Maybe you're thinking about outsourcing your email campaigns to an agency, or you're just dipping your toes into email marketing and need some assistance. 

Either way, you're probably wondering: how much does hiring an email marketing agency cost in 2024? 

In this blog post, we’ll break down the factors that influence agency fees, typical price ranges, and what you can expect for your investment. 

By the end, you’ll have a clear picture of how to budget and what to look for when choosing the right agency for your needs.

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Why You Should Invest in Email Marketing for Ecommerce

In today’s world, it’s crucial for businesses to maintain relationships with their customers, as this practice goes a long way in increasing customer lifetime value (LTV) and overall revenue. 

Email marketing is one of the best ways to do that. 

Unlike social media ads, email marketing might not generate results immediately; however, there are plenty of reasons why you should invest in ecommerce email marketing:

• Email marketing has the greatest ROI, compared to other mediums, including social media advertising, SEO, etc.
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• It directly connects you with the customers as your emails go straight to their inbox, unlike ads that may or may not be visible to your target audience.
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• Helps increase customer lifetime value (LTV) by encouraging customers to come back and shop again through purchase emails, customer winback emails, etc.
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• Email marketing allows you to personalize your communication for each subscriber.
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• You can update your target audience about new arrivals, offers promotions, etc., which helps increase overall revenue.

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What Factors Affect the Cost of Ecommerce Email Marketing?

Now that you know the importance of email marketing, you must be thinking how much does email marketing cost? Because let’s be honest, there’s no free lunch in the world!

To give you a better understanding of the cost of email marketing services, here’s a breakdown of the factors that affect the cost of an ecommerce email marketing agency:
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1. Platform Requirements

Let’s say you hire an agency for email marketing management. You might think that’s all you have to do, but that’s just the beginning!

To send out emails to your customers, you will have to subscribe to an email service provider (ESP) like Klaviyo. This will also contribute to your cost of email marketing because these platforms have a separate subscription fee.

 You can compare different ESPs in terms of pricing and features offered, but regardless of the platform you choose, it will add to your cost of email marketing.
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2. Number of Emails

Another important factor to consider is the frequency of emails you plan to send out. When you hire an agency for email marketing management, number of emails matters because agencies usually charge on a per email basis. 

Typically, an email marketing agency may charge you anywhere between $200 to $1000 (inclusive of copy, design, and setup). The charges vary depending on the complexity of design, the ESP, list segmentation, etc. 

Some agencies also offer a revenue-sharing or commission-based pricing model, meaning you pay them a lower fixed amount plus you a commission for each email.

This pricing model is particularly beneficial for small businesses, as you don’t need to pay a a good amount of money even if they email is not generating any sales.

3. Email Design Complexity

Creating  emails is a time-consuming process.  First, you have to come up with the content, and then create a design using that content.

When it comes to email designs, you have two options: You can get a template made and use that for all email campaigns. Or… you can get a new design made for every email campaign. 

Template-based emails are less costly because they follow the same structure for every campaign, but they might not be as engaging and might get redundant after a while. 

Custom designs are detailed, and your emails are specific to your brand. They include relevant imagery and color schemes to familiarize your audience with your brand’s design.

Platforms like Klaviyo and Mailchimp are drag-and-drop email builders that offer pre-built templates for different industries. Good email marketing agencies also use HTML code to add extra details so there can be as many customization possibilities as you want.

If you choose a simple design, the agency will charge you less, but as your designs get more specific, the cost will go up.
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4. Full-Service Management

You need to determine how much work you want the email marketing agency to do for you. 

If you already have an in-house designer and a copywriter to create emails and just need someone to set up and schedule them on your chosen ESP, that would cost you less than outsourcing the entire email marketing work to an agency.

Understand your requirements before hiring a full-service email marketing agency because for small and mid-sized businesses, every dollar counts!
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5. Testing

Imagine blasting an email without first testing whether your customers will take it positively or not. It’ll be risky especially because there’s money on stake!

Email testing is also an essential part of building an email marketing strategy. Sending test emails on multiple devices is a good way to test whether your email is responsive or not.

Email marketing agencies use paid platforms like Litmus, Email on Acid, and Mailtrap for testing. These platforms offer different plans starting at $100 per month. 

Some agencies may pass on these charges onto their clients, hence increase the email marketing agency cost, while others may cover this cost themselves.

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Factors to Consider While Choosing an Ecommerce Email Marketing Agency

Once you have decided on the budget for an email marketing agency, the next step is to research and choose the best possible option for your business!

Here are some factors to consider while choosing an ecommerce email marketing agency:
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Pricing

Pricing is likely the most crucial factor to consider when you’re hiring an email marketing agency.

Keep in mind that good things don’t come easy! An excellent email marketing agency might cost you more, but with its expertise and experience, it can generate a higher email marketing ROI for your brand.

Consider this: if you find an agency that charges you $200 and generates $300 in return, you’ve only made a profit of $100 which isn’t much. Instead, look for an agency that charges you $400 but generates $800 (double the profit). 

That’s the kind of deal you should look for to really succeed in email marketing.
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Specialization

When you’re paying for something, you deserve to get the expertise!

Your email marketing agency should have the expertise in your industry so they can help you create compelling emails that deliver the right message to the right people at the right time. 

For example,  if you own a beauty brand, make sure to look for an agency that has prior experience working with other brands in the same industry. 

Additionally,  if you prefer a specific ESP, it would be a good idea to confirm with the agency whether they are familiar with that platform to avoid any problems later on.
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Experience

It’s important to know how much experience the email marketing company has!

A new email marketing agency might offer more attractive pricing, but they will probably not be able to guarantee success. Hence, it’s best to go for an experience email marketing agency. 

The best way to make sure that you hire an experienced agency is by asking how many writers, designers, and project managers they have on board, and check out their portfolio to be sure.
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Reviews

Lastly, don’t forget to check the company’s reviews on the Internet, it makes the process so much easier!

Check out their website for testimonials, and search their name with the word “reviews” on Google and see what their previous clients say about them.

This can save you from wasting your time on the wrong agency and well, also save money!

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How to Calculate Your Email Marketing ROI

To calculate ROI on your email marketing, you can subtract the earnings from the money spent on marketing, divide it by the money spent, and the number you’ll get is your ROI.

Here’s the formula: (Gain - Spent) / Spent = ROI

For example, let’s say you earned $5000 from your email marketing after spending $500 on the campaign. Minus the $500 you spend from the revenue and you will have $4500 which means you made $9 for every $1 spent.

Simply put, you invested $1 dollar and earned 9 times from it in return.

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Frequently Asked Questions About Email Marketing Agency

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1. Is it worth investing in an email marketing agency?

Yes, email marketing can be difficult to manage, especially if you don't have prior experience. Agencies offer reporting that can give you valuable insights about your email marketing performance.
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2. Can small and mid-sized businesses afford email marketing agencies?

Yes, many email marketing agencies offer tiered plans with different benefits at different costs. Small and mid-sized businesses can work with an agency with a tier according to their budget.
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3. How can I determine that an email marketing agency is right for me?

Ask for case studies and references, evaluate their portfolio, and ask them industry-related questions. Test their email marketing knowledge to be sure that they are the right fit.

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Wrapping It Up

Email marketing remains a highly effective strategy for businesses of all sizes. It’s essential to stay updated with new trends and technology in email marketing to capture and maintain customer attention effectively.

Choosing the right email marketing agency can make a big difference in how well you connect with your customers. Investing wisely in the right support can help you build strong communication and keep your audience engaged.

While email marketing agency pricing varies based on your needs, DIGITORM offers email marketing solutions that fit every budget. Book a free consultation with our email marketing experts today to explore your options and get started right away.