Email marketing is one of the most cost-effective marketing channels. Businesses generate an average of $38 for every $1 spent on email marketing.
That’s pretty impressive. But what does email marketing cost?
In this guide, you’ll find everything you need to know about email marketing costs. From email marketing tools and list building to handling your activities in-house, outsourcing, and more. A comprehensive cost and pricing guide for everything email marketing.
How much does email marketing cost?
Email marketing is a marketing channel that scales with the size of your business. But how much should you expect to pay for email marketing?
The Average Price of Email Marketing Software
You’ll spend between $0 – $99 with list of 5.000 email contacts for SMB email marketing software per month if you are managing your email campaigns yourself. The price increases with the size of your email list. For instance, once you exceed 50.000 subscribers, expect to pay around $270.
SMB Email Marketing Software Price
Here is a quick overview of the correlation between list size and price range of SMB email marketing software.
|List size||Price Range||Average Cost|
|0 – 1000||$0 – 39||$18|
|5000||$0 – 99||$62|
|10K||$25 – 155||$100|
|50K||$45 – 345||$270|
|100K||$65 – 540||$420|
Some email software will have multiple plans that are based on functionality.
SMB email software starting prices
Here’s a list of a few of the most popular email marketing software, what they offer as free version, and monthly starting prices:
Now, what if you plan to outsource your email marketing efforts to a full-service email agency?
Most agencies charge a rate of $100 – $200 per hour. On average, you can expect to spend around $2,500 per month.
If you’re a small business, new to email marketing, it may seem smart to not outsource your email marketing to an agency because of the costs. It’s worth considering hiring a freelancer. It’s cheaper than an agency and can be better for small businesses. Here’s how much Mailchimp partner freelancers charge inside and outside of North America:
You can decide to start small or invest heavily. So, your ambition influences the cost of email marketing. Let’s zoom in on the agency scenario.
How much does an email marketing agency cost?
Handling your email marketing campaigns in-house can be overwhelming but an email marketing agency can help out. They provide email marketing services.
An experienced full-service agency can cost you $2.500 monthly. You can hire agencies for less, depending on their services and expertise. Before you hire an agency, check if they have the email marketing chops, skills, and quality to justify their price.
A factor that influences how much an agency costs is if they charge blended or tiered rates. Blended rate means that the agency charges the same for a billable hour for all team members. Tiered rate means that you’ll pay more if an executive works on your campaigns than a junior.
Here are the average tiered hourly rates of email agencies in 2023:
And here are the blended hourly rates for email agencies in and outside North America:
Many agencies prefer to work on a retainer. A retainer is an agreement between a company and an agency to work together for some time. Usually for more than 1 year, on more than 1 project. 95% of email marketing agencies have at least some client work on retainer with on average 41-60% is retainer work.
Agencies use different pricing for their their email marketing services. Some charge fixed rates, meaning that the client agrees on the project scope upfront. Others use a pricing model is based on time and materials, charging for each work hour. Agile pricing means that a project has phases that are priced indivudually. Value-based pricing means that the pricing reflects the client’s perceived value of the services. A few agencies price based on performance, so payments are based on the archived results.
Here’s a look at which of these pricing models are more prominent:
Note: Agencies surveyed were able to select more than one answer.
Email Marketing Services offered by agencies
Digital agencies offer different types email marketing services that fall into these categories:
- Content creation services
- Analytics services
- Strategic services
- Technical and platform services
The most common contract value for email agencies in the first 12 months is between $5,000 and $49,000.
The most common minimum contract value email agencies accept in the first year is between $0 and $9,000. But 49% of agencies will ask for a contract value of 5K or more.
That gives you an idea about what to expect when hiring an agency for email marketing. Let’s break it down by specific services.
1. Content creation services
A good marketing agency has a team of writers, designers, and developers. They can help you create compelling content for your business.
Activities in the content service category are:
- email copywriting,
- blog writing,
- finding and creating images,
- email template design,
- and complete email marketing campaign creation.
You’ll quickly spend $500 per month for dedicated email content creation services – and expect a max of 250 words per email. A good template can save you lots of $$$. Get the best free email templates here.
2. Analytics services
The best agencies test, learn and improve their approach to marketing problems. They track your email marketing campaigns and provide reports, analysis, and an optimization strategy.
Email agency activities for analytics are:
- campaign monitoring,
- data visualization,
- custom reports,
- segmentation analysis,
- and reporting on your database and business outcomes.
Reporting and analytics are usually part of the package. The agency wants to show the results they’ve delivered. Most agencies include reports for lead generation, campaign analytics, and more in all their packages.
A light analytics audit will cost you around $750 if you’d like the agency to evaluate your current data and give advice based on that.
3. Strategic services
Marketing agencies help grow your business by finding the right marketing ideas and creating a plan.
Strategic services offered by agencies are:
- market analysis,
- staff augmentation,
- road mapping,
- and business optimization.
Hiring an agency for strategic services will require an initial investment of $900 to “the sky is the limit”. You’ll spend $75 – $275 / hour.
4. Technical and platform services
Agencies can provide direction on technology selection and implementation for your business.
Think about everything from:
- vendor selection & implementation,
- deliverability & compliance,
- technology optimization,
- and data integration.
An email marketing agency will charge between $95 – 300 / hour for technical services.
How much does an email template design cost?
An email template is a reusable email design and HTML file – you can use in your email marketing software. You’ll save time when creating your emails. Using an email template in an ESP is simple drag and drop. Replace elements like texts and pictures and add your brand colors.
When creating an email template, you can pay for a coding-only design or a coding and design template.
Code-only means a developer will create an HTML template based on your specifications. Your specifications must include your brand elements and a description at least.
Making that into a template keeps your brand consistent. Design the template by using colors and images that match your brand.
The cost of designing an email template differs from agency to agency. Some agencies charge as low as $100 per design, while a few will charge up to $2,000 for enhanced designs.
Generally, a good email design will cost between $500 to $1,000.
Going for the DIY approach for email template design is way more cost-effective. There are great free email template builders and tons of free email templates available. Consider this if you have someone in-house with design skills.
How much does bulk email cost?
With some of your email campaigns, you might have the need to send out a large number of emails. Marketers call these email blasts or bulk emails. (not per se the most beloved name for them in the industry).
Email blasts are unlike your regular email campaign. They are less targeted or personalized. Email blasts go out to as many of your subscribers as possible.
Think of general announcements or sales where segmentation is not important. A bulk email service provider can send large amounts of emails without any problem. How does a bulk email service provider (ESP) charge for emails sent?
They use a rate called Cost Per Mile (CPM). This is the cost of sending a thousand emails. It is also known as Cost Per Thousand (CPT).
This is how to calculate your email marketing cost based on CPM:
(number of emails/1000) * CPM rate
Tiered CPM rates
Most ESPs offer their email marketing services on a tiered CPM-based pricing structure. This means your CPM rate decreases as the emails you send increases.
For example, you could have:
- 1 – 10,000 emails cost $12 CPM
- 10,000 – 50,000 emails cost $10 CPM
- 50,000 – 250,000 emails cost $8 CPM
You’ll have a chance to negotiate your CPM rate with your ESP if you send large email volumes. In the contract, commit to a number of emails to be sent yearly or buy email credits in bulk. If you send a higher or lower number than average, the difference should be balanced at the end of the contract.
Other email marketing pricing methods ESPs use for bulk emails are:
- pricing based on the number of your email subscribers,
- a subscription fee,
- or a flat fee.
How much does an email list cost?
To start your email marketing campaign, you need an active email list. You can get this in many ways:
- You can build a new email list from scratch.
- Sponsoring and advertising are also an option
- Or if you’re in a hurry, you could buy or rent an email list from a third party.
Going through a third party means deciding whether to buy or rent your email list. Some companies might offer millions of email contacts for $100 or less in what looks like a sweet deal. But it isn’t.
Most of the emails sold like that are either invalid or illegal. In many countries buying an email list is illegal. Your email service provider won’t let you send to purchased lists. Sending emails to these addresses is a sure way to be labeled a spammer. (which you also would be).
A valid and safer option is to rent email lists offered by acknowledged brokers. You’ll pay for limited-time access to a list who consented to get emails from third-party senders.
Renting email lists also gives you access to segmented lists of your target audience. Providing you with a higher response rate. Costs are higher if you want a more segmented or targeted audience.
The quality of the list influences the cost of renting. Open percentages and audience fit are good indicators of quality. In some cases, you only pay for opens or clicks.
Note that the prices of B2B email lists are generally higher than B2C email lists.
Expect to pay around $200 – $400 for 5,000 B2C email addresses. 5,000 B2B email addresses will average between $300 and $600.
How much does growing an email list cost?
The acquisition costs depend on the type of emails, industry, and quality you’re looking for.
List growth costs are based on the following:
- Costs for generating traffic
- Cost of landing page builder and opt-in forms
- Cost of acquisition campaign
- Cost of content and/or sign-up incentives
- The conversion percentages from traffic -> sign up.
This will range from $2.5 to $20 / contact.
How much does a newsletter design cost?
Email newsletters are a common way for companies to keep in touch with their audience. Your newsletters can include company news, product updates, or tips for your audience. You’ll need a good-looking and functional email design to stand out in the inbox.
A newsletter should have eye-catching visuals, contain valuable content, and be easy to read. Your choice of colors, fonts, buttons, content, and images must be based on your brand. So what does a customer newsletter design cost?
A newsletter design will cost you between $500 – $2000.
The final cost depends on the number of deliverables. You’ll pay less if you only ask for visual design. But some email marketing agencies also offer coding, writing, testing, and many versions. These lead to a higher cost.
What should you invest in email marketing?
Businesses rely on email marketing because it’s a profitable marketing channel. It has high returns on investment. So companies invest a sizable chunk of their marketing budget into email marketing.
According to Gartner’s The State of Marketing Budget and Strategy 2022, companies spend an average of 7.8% of their marketing budget on email marketing.
According to the DMA, most B2C marketers expect their email marketing budget to increase this year. While B2B marketers expect it to stay the same.
These factors determine your email marketing budget:
- Your annual revenue, margins, and marketing budget
- Your marketing goals
- Ambition and aggressiveness of your tactics
- The invested budget into reach and the channel
- Shown and proven outcomes
It is important to consider email marketing as an investment, not a cost. Like every other investment, you can get varying degrees of returns.
While the email marketing ROI is 3800%, that’s not typical for everyone. The ROI of your email campaigns also depends on how you execute your email strategy. What would you earn back for each dollar invested.
Think of a scenario like this:
|Ambitious/high||Average||Ambitious / high|
|$0 – 7||$7 – 25||$25 – 45|
What does email marketing cost?
Many factors influence the costs of email marketing and the budget you need:
- Your choice of email marketing platform
- The number of emails sent
- The quality of your email list
- The complexity of your email campaigns
- Doing email in-house or outsourcing
Let’s look at each one in detail.
1. Your choice of email marketing platform
This is usually one of the first places you’ll check when deciding how much to spend on email marketing.
The email marketing platform offers the infrastructure you need to run your campaign. The features of these platforms differ, as do their pricing.
Let’s look at the email marketing pricing of some of the popular platforms.
Note: These are the minimum costs of each platform. The costs of email marketing software increase as your email list and sending frequency grow. Free plans have limited features. Free trials include most features of the given software.
Price should never be the only consideration when selecting your email marketing service. Luckily, most email marketing tools offer free trials or a free version of their software. Sign up to free email software trials to see which one’s the best fit for your business.
2. The quality of your email list and email verification
An email list full of unresponsive contacts is a drain on your marketing resources. The best thing for a high-quality email list is continuously attracting new (engaged) subscribers. There are many email list building tools available.
There are email list cleaning services if you plan on cleaning up your current email list. These show and scrub invalid, bouncing, and unresponsive emails. The rate you pay per email decreases as your volume increases.
Sending emails to an unhealthy email list won’t do your email open rate any good. The average open rate for a healthy email list is around 18%. You can expect this number to be much lower for an unhealthy list.
Look at the costs of 3 of these email verification tools below: Bouncer, ZeroBounce, and Mailchecker.
Either purchase credits, and each credit lets you verify one email. Currently, their rates are:
|Number of emails||Bouncer Price/email|
|1,000 – 4,000||$0.007|
|5,000 – 9,000||$0.006|
|10,000 – 49,000||$0.005|
|50,000 – 99,000||$0.004|
Here’re the prices for Bouncer’s monthly plans:
- Apprentice ($20/month) for 10,000 email verifications
- Adept ($100-300/month) for 50,000-250,000 email verification credits
- Master ($500/month) for 500,000 email verification credits
ZeroBounce is an email validation software with 100 free email verifications. They also offer both pay-as-you-go and monthly subscriptions. The credit-based pay-as-you-go rates are:
|Number of emails||ZeroBounce Price/email|
|2,000 – 4,999||$0.008|
|5,000 – 9,999||$0.078|
|10,000 – 99,999||$0.065|
The monthly subscription costs are:
|Number of emails||ZeroBounce Price/month|
MailerCheck is an email list verification platform with 200 free credit. They offer monthly and pay-as-you-go options, too. MailerCheck’s pay-as-you-go prices are:
|Number of emails||MailerCheck Price/email|
Email marketers tell you to clean your list and not send to emails that haven’t interacted with you in a while. Cleaning your email list at least once per six months leads to higher engagement rates. And you won’t waste your money on unresponsive leads. See our review of the best email verification tools for more options to clean your list.
The complexity of email design
Most email marketing platforms provide email design templates to choose from. If these are enough, you could Do It Yourself (DIY) and customize your template to fit your brand and business.
But if you like to have a custom or elaborately designed email, expect to pay a designer. The more complex the design is, and the more variations or content blocks, the higher the cost of the designer and coding.
In-house or outsourcing
Before you begin your campaign, you must decide: do you hire a marketing agency or handle everything yourself?
Outsourcing your marketing efforts to agencies can cost a few thousand dollars. But they bring experience and expertise to the table.
But if you decide to take the DIY route to save email marketing costs, you’ll need to learn how to set up a winning email marketing campaign.
How to create an email marketing strategy
So far, we have only talked about email marketing costs. Email marketing is a powerful marketing channel with an average return of $38 for every $1 spent.
But to get to that number with your marketing campaign, you must have a foolproof strategy. A good email strategy requires you to be clear on your goals and how you’ll measure success.
So, how do you create a winning email marketing strategy? I have put together the following steps to help you.
- Be clear on your email marketing goals
- Build your email list
- Create an email marketing calendar
- Send out your emails
- Analyze your performance
1. Be clear on your email marketing goals
What is the aim of your marketing strategy?
Having clear goals is the foundation for the success of your email campaigns.
Goals help you focus. They help you keep track of your progress.
When setting your goals, it is advisable to follow the SMART framework.
SMART stands for:
- Specific: Do not be vague here. Try to include as many details about your goal as possible.
- Measurable: Set milestones and deadlines to track your progress.
- Achievable: Choosing a goal that stretches your abilities and resources is okay. Just be realistic about your chances.
- Relevant: Make sure your goals align with your business goals and contribute to them.
- Timebound: Set a target date to help sharpen your focus and keep you motivated.
The most common email marketing goals are:
- Sales, revenue, and direct conversions via email
- Informing, customer service and branding goals
- Lead nurturing and lead qualification
- Increasing website traffic
- Increasing the number of email subscribers
- Boosting your email open rates
- Improving deliverability
2. Building your email list
Before sending any email campaign, you’ll need an email list. Your email list is your database with profiles that contain opt-in email addresses. So you can send them marketing and promotional materials.
Building your list organically is still the best way to have a high-quality email list. Your email strategy should include the how, what, when, and why of your email list building. Including the cost and budgeting for list growth. More on how to build your list later.
3. Create an email marketing calendar
Now that you have created an email list, you don’t want to adopt a spray-and-pray approach to sending out content.
You should create an email marketing calendar that’ll help you visualize your strategy. With your calendar’s help, decide on the frequency and timing of your emails.
Next to scheduled, regular email newsletters and promotions include automated and triggered emails. Schedule time to check and optimize your automated emails from time to time in your calendar.
4. Send out your emails
When sending out your emails, write a compelling subject line.
Your email subject line is very important. It’s the first thing your readers see, and it helps them determine if your letter is worth opening.
To keep your subject line game strong, follow these tips:
- Keep your subject lines short
- Try using your recipients’ name in the subject line
- Let your subject line promise value
Also, when sending out your emails, make sure that your tone resonates with your audience. A consistent brand voice will ensure that your readers connect with you.
This could make them more responsive to your offers.
Don’t forget to add call-to-actions (CTAs) to your emails. Let your audience know what action you want them to take.
5. Analyze your performance
A good email strategy requires you to be clear on how you will measure your success.
Analyzing your performance helps you figure out what works and what isn’t.
To gain more insights and optimize your email campaigns, carry out A/B testing on your emails.
What is A/B testing?
A/B testing is sending a variation of your email to a segment of your audience and another variation to a different segment. This is done to determine which variations give the best result. Try out different variations of your designs, subject lines, and email content. Experiment with your CTA, font size, and the time you send your emails.
How to build an email list
We’ve been over the costs of renting an email list. But how do you build your own email list from scratch?
Building your own lists is the most transparent way to know your email contacts are high quality. The following tips will help you quickly grow an email list:
- Create a new lead magnet
- Make use of lead capturing forms
- Create a referral program
- Hold giveaways and contests
- Promote your offers on social media
1. Create a new lead magnet
One of the easiest ways to compel people into joining your list is to create a lead magnet. A lead magnet is a free item or service you offer your customers in exchange for their email addresses. Effective lead magnet ideas include:
- swipe files,
- gated contents,
- and tutorials.
Whichever you choose, make sure it takes care of one of your customer’s pain points.
2. Add lead capture forms to your website
Make it easy for your audience to sign up for your emails by adding email signup forms. This can be as simple as adding the signup form to your sidebar or as advanced as using an exit-intent popup.
You can also add a checkbox to your contact form that visitors can tick if they want to join your email list.
3. Create referral programs
Research has shown that 92% of consumers trust recommendations from people they know. This means that referrals could be a strong source of leads for you.
Offer incentives to encourage subscribers to share your content. The incentives can be credits, discounts, and coupons.
4. Hold giveaways and contests
Contests have a 34% conversion rate! This makes it one of the most effective ways to gain new customers.
Use social media or your referral program to spread the word about your contests. Approximately 94.5% of users share a promotion immediately after they register.
5. Promote your offers on social media
You can also direct traffic from social media accounts to a landing page where visitors can sign up.
Promote a gated free resource via Facebook or Twitter that requires an email to get it. Also, don’t forget to add social buttons to your website to grow your following on social.
The process of building your email list is a continuous one. According to Hubspot, email lists generally degrade by about 22.4% yearly.
So unless you find ways to make up for the lost leads, your email list will continue to shrink yearly.
What does email marketing cost? It will depend on the size of your business and your email list.
If you run a small business, you could spend anywhere between $17 (100% DIY) to $1950 per month. And if you decide to hire an agency, be ready to spend around $2500 or more.
One overlooked cost of email marketing is time. Time is money. Factor it in when calculating the email marketing costs.
When you invest in email marketing, remember that revenue and success aren’t a given. They depend on your email marketing strategy and how you execute it.
How much does email marketing cost – FAQs
Why is email marketing cost-effective?
One thing that has made email marketing so cost-effective is its scalability. Small and large businesses alike can do email marketing. The only difference is the size of their budget.