- Email marketing ROI = (what email earned you − what email cost you) ÷ what email cost you.
- Total costs include the platform, SMS, your agency or freelancer, design, apps and your own time. Most founders forget at least two.
- Attributed revenue shows which emails were near a sale, not which sales they caused. A holdout test is how you see the difference.
- Use gross profit instead of revenue, and incremental revenue instead of attributed revenue. The number gets smaller and a lot more useful.
How do you calculate email marketing ROI?
Here's the formula in plain words:
Email ROI = (what email earned − what email cost) ÷ what email cost
Multiply by 100 for a percentage. If email brought in $10,000 and cost you $2,000, that's $8,000 ÷ $2,000 = 4, or 400%.
Two upgrades make that number a lot more honest:
- Use gross profit, not revenue. If your gross margin is 60%, $10,000 in sales is $6,000 you can actually spend. Revenue-based ROI flatters everyone.
- Use incremental revenue, not attributed revenue. Incremental means the sales that wouldn't have happened without the email. That's the big one, so it gets its own section below.
What costs belong in email marketing ROI?
Everything you spend to make email run:
- The platform. Your Klaviyo bill, whatever plan you're on. Check it every month, because it moves with your list. If it jumped recently, here's why your Klaviyo bill went up.
- SMS. If you text from the same platform, count those credits too.
- Agency, freelancer or specialist. Retainers, performance fees and one-off builds. I break down the usual ranges in how much a Klaviyo agency costs.
- Design and copy. If someone outside your agency designs templates or writes campaigns, count it.
- Apps and add-ons. Popup tools, review apps, quiz tools, anything that exists mainly to feed the list.
- Your own time. This is the one founders skip. If you spend five hours a week writing emails, building segments and reading reports, put a dollar value on those hours.
Count discounts too, at least in your head. If a campaign gives 20% off to people who would have bought at full price, that's a cost, even though it never shows up on an invoice.
Why isn't Klaviyo's revenue number your ROI?
Because attribution measures whether email touched a sale, not whether email caused it.
Klaviyo credits an order to a message when someone interacted with that message inside your attribution window. Someone opens your Tuesday email, forgets about it, then buys on Friday because they ran out. If Friday is inside the window, that order counts as email revenue. Apple Mail can make this worse, because its privacy feature opens emails automatically. In my data, auto-opens pushed open rates past 85% on some segments, so opens alone tell you very little.
None of that is a bug. It's just what attribution is built to measure. The window, and whether opens count, are settings in your account, and they change your "email revenue" number without changing a single sale. Before you calculate anything, look at how yours are set, and keep them the same from month to month. I go through the settings in Klaviyo attribution.
How do you find what email actually causes?
Run a holdout test. You randomly hold back a slice of people from a flow or from campaigns, then compare revenue per person between the group that got emails and the group that didn't. The difference, multiplied by the number of people who got the emails, is your incremental revenue.
Start with your biggest flows. They're where most of the attributed revenue sits, so they're where the gap between attributed and incremental matters most. Here's how to run an email incrementality test step by step.
A worked example: what honest inputs do to the math
Everything in this example is hypothetical. It's here to show the math, not to predict your numbers.
Say your store does $250,000 a month and Klaviyo attributes $80,000 of it to email.
Now the monthly costs. Say the platform plus SMS runs $1,200, your agency is $4,000, outside design is $500, and you spend five hours a week on email at a value of $100 an hour, about $2,000 a month. Total: $7,700.
Say your gross margin is 60%. And say holdout tests showed that 40% of attributed revenue was truly incremental. That 40% is made up for the example. Yours could be higher or lower, and it will differ between flows and campaigns.
| How you measure it | Email "return" per month | ROI |
|---|---|---|
| Attributed revenue | $80,000 | 939% |
| Attributed gross profit (60%) | $48,000 | 523% |
| Incremental gross profit (40% of attributed, at 60%) | $19,200 | 149% |
Same business, same emails, three very different answers. The first one is what most dashboards show. The last one is closest to the truth.
In this example, email still pays for itself with room to spare. The honest number is smaller, but it's one you can actually make decisions with.
What pushes email marketing ROI up or down?
Flows usually carry it. Across 4 consumable brands I work with, welcome email #1 earned about $4.50 per person, and replenishment flows earned about $2.23 per person, about 28x the best campaign. Those are attributed numbers, so run them through the same honest math. But they show where the money tends to sit.
Blasting the whole list drags it down. At a sports training tech brand, an engaged send to 7,145 people earned $0.19 per person. A blast to 49,475 earned $0.04. Every extra profile you email costs platform money, so a bigger send can lower your return per person.
The setup matters most. At a tallow skincare brand, email revenue went from $48,193 for all of 2025 to $203,777 from January to July 2026, and flows went from 60% to 83% of email revenue. Same platform, different setup.
Your total store revenue changes the picture. At a subscription wellness brand, store revenue fell 37% in April and email's share of revenue rose from 41% to 53%. Email's share went up because the rest of the business shrank, not because email got better. So read email's share next to total store revenue, never on its own. More on that in what percentage of revenue should come from email.
None of that is a promise. Results are never guaranteed, and anyone who quotes you an ROI before seeing your account is guessing.
Where these numbers come from
The welcome, replenishment and open rate figures come from 4 consumable brands I work with: 2,897 campaigns and $17.7M in email revenue. That's a small sample, so treat them as directional. The other figures are single brands. The worked example is hypothetical.
FAQ
What's a good email marketing ROI?
There's no universal number, because everyone counts costs and revenue differently. Compare your own number month over month, using the same method and the same attribution settings each time. If you switch from attributed revenue to incremental gross profit, expect it to drop. That's fine.
Is there an email marketing ROI calculator I can use?
A spreadsheet does it in five minutes: one row for each cost, one for email revenue, one for gross margin and one for your incremental share. The formula is (email gross profit − email costs) ÷ email costs. The hard part is honest inputs, not the math.
Should SMS be part of email marketing ROI?
Track it both ways. Together tells you whether retention as a whole is paying off. Separately tells you whether SMS is earning back its own cost.
How do I calculate ROI for one email campaign?
Same formula, smaller inputs: the revenue or gross profit from that send, minus what it cost to produce and send, divided by that cost. One campaign is noisy, so judge a type of campaign across several sends.
Does a high ROI mean I should send more?
Not automatically. Send more to the segments that click and buy, then check that total revenue rises while revenue per person holds.
Founder of Bardown Digital, a Chicago-based Klaviyo email and retention agency for Shopify brands. He's worked with brands doing $500K to $100M a year, with $100M+ in email-attributed revenue across them.