How to Create an Email Marketing Budget [With Template]

By 2026, the number of email users worldwide is expected to climb to 4.73 billion as digital transformation continues to change our daily lives. It’s important for businesses, regardless of size or industry, to seize the opportunity to build lasting impressions with their customers through bespoke email marketing solutions.

While there are many free email marketing tools available nowadays, they’re not always the best solution for growing businesses, especially for those who plan to scale their efforts.

Besides, most of the time, those tools aren’t enough when it comes to email marketing — you also need great copywriting, graphic design, and continuous testing.

Planning a budget can be intimidating if you don’t know all the necessary information. Keep reading this guide to know every factor you need to consider and the steps you need to follow to create the ideal email marketing budget for your business. 

Don’t know where to start? Get the help of a dedicated partner. Connect with the leading email marketing agencies on Clutch.

What Goes Into an Email Marketing Budget?

Creating a realistic budget for your business isn’t easy. The first thing you need to understand is all the components that make up a successful email marketing campaign.

Email marketing provides an incredible return on investment (ROI) for those who know what goes into it. However, it’s not a simple two-step process as it requires tedious planning, research, development, and testing to be effective.

Here’s everything you can expect when you hire an experienced email marketing partner:

• Campaign planning is the first step an email marketer does. They take a step back to assess your business, study your customers, and understand your marketing goals to plan your campaign structure. Experienced email marketers can help you decide what specific campaign type you need to successfully reach your customers (i.e. newsletters, re-engagement, and blog updates).
• Email marketing platform selection is important to the success of your campaign. The right platform can be the difference between maximizing your reach and failing. When you hire an email marketing agency, you gain access to professionals with in-depth expertise on various email tools and platforms that can streamline your campaign.
• Email list building is one of the biggest priorities and challenges in email marketing. Essentially, the research they’ve conducted will help them assemble or generate a list of potential and existing customers. Agencies know how to organically build an email list through various channels such as customer relationship management software, gated content, or social media.
• Email list segmentation is the next step after compiling and gathering details of your target audience. Segmenting email lists into different groups is crucial to delivering bespoke content or emails. See, customers are most likely to open or engage with your emails if they feel like it’s relevant to them. Typically, lists are segmented by categories such as geography, purchase records, buyer behavior, and expressed interests.
• Copywriting is integral to connecting with customers, especially in email marketing. Content is king in marketing, and experienced agencies have extensive teams dedicated to writing email content with a great heading, subject line, body, and CTA. Many email marketing platforms will provide templates or guides but they may not perform as well as bespoke content.
• Graphic design or email design breathes life into your emails. Generally, customers appreciate emails that are accompanied by engaging or vibrant visual elements. It will be hard for your campaign to stand out and get noticed if it only contains text. Full-scale agencies have dedicated designers who can provide unique artwork, layouts, and illustrations that will elevate your brand.
• Testing and reporting give a clear picture of how an email marketing campaign performs. It’s never a bad idea to try different approaches or styles to see which one clicks for your customers. There are many different ways to test a campaign but usually, A/B testing is enough. Additionally, it’s important to keep track of real-time key performance indicators (KPIs) such as unique open rate, click-through rate (CTR), and bounce rate to see if you need to pivot or if you’re hitting your goals.

Having an idea of what goes into email marketing campaigns will help you plan your budget accordingly. It’s still hard to give a definite answer as to how much but once you know your business, it can be easier to research the average costs for what you need. 

How to Create an Email Marketing Budget? 

1. Identify Your Goals
2. Examine Your Whole Finances
3. Align Your Plan With Your Entire Marketing Strategy
4. Know What Tools to Use
5. Consider Creative Costs

1. Identify Your Goals  

Before you research how much tools and email marketing services cost, the first step is to evaluate your business carefully. You can call on your leadership team or marketing team to help you answer crucial questions that will give you a clear understanding of your business needs and goals.

How are you currently connecting with your customers? Do you already have an existing email marketing initiative? What will the purpose of your campaign be?

Identifying and outlining your goals will allow you to do better research on the cost of similar projects on your scale and create a more practical budget accordingly.

If you’re a small business or startup that’s planning to kick off an email marketing campaign, you should consider a simpler campaign first. Make sure your budget can accommodate the scope and timeline of your target campaign.

Meanwhile, if you’re planning to run different types of campaigns for different segments, you should expect that costs will go higher. Other variables to keep in mind while prioritizing your goals include the scale of your campaign and monthly email volume.

2. Examine Your Whole Finances

No business owner wants to spend more on any marketing channel than ROI. Overspending is never an option.

Before you draft a budget for your email marketing campaign, you should examine your resources, revenue, and other marketing expenses. If you’ve already run an email marketing campaign in the past, you should also evaluate key metrics like CTR and average cost per conversion.

Based on the information you’ve gathered, consult your team and ask for help in researching and calculating costs.

Having a clear understanding of your finances will help you gauge a ballpark range of how much to spend. Determining that will not only help you create a detailed budget but also allow you to effectively communicate your needs to prospective service providers. 

3. Align Your Plan With Your Entire Marketing Strategy

Like most businesses, you may already have an overall marketing strategy planned for the rest of the year but is there allocation for email marketing? Your finances and main business goals will directly impact the marketing channels you need.

If planned efficiently, email marketing can supplement many of your existing digital marketing channels like SEO, PPC, and content marketing.

Most businesses plan their budget and marketing activities separately. Make sure you and your entire team are synced when it comes to them.

4. Know What Tools to Use

Email marketing tools are imperative to the success of your campaigns. The right tools will help businesses reach more audiences and save time organizing their lists.

When planning your budget, make sure to do your research on the tools needed to perform a variety of email marketing-related tasks.

There are countless email automation tools available in the market. There are free solutions that offer limited capabilities, and there are paid tools that can accommodate larger-scale campaigns.

Consider the following factors when researching the right tools for your business:

• What are its functions? 
• What value does it bring to your campaign?
• Does it have all the features you need? e.g. analytic features or behavior tagging
• Do you like the templates they have?
• Do their drafting features work for you?

Knowing what type of tool you need is important to planning your budget.

Moreover, if you plan to hire a dedicated email marketing agency, they’ll most likely already have their preferred tools for their work. You can still consult them on what type of tools to best use for your project.

5. Consider Creative Costs

Let’s face it, templates aren’t enough to make an impact on your customers. The content of your emails is as important as the tools you use. So, as you plan your email marketing budget, remember to leave headroom for creative costs.

The creative team behind your email marketing efforts will be its heart.

You’ll need the expertise of experienced copywriters and graphic designers who understand your brand, know how to create compelling content, and can add value to your campaign. However, you should know that their services don’t come with a small price tag.

In addition to copies and graphics, the occasional videos can also boost the appeal of your emails. Be prepared to allocate resources for those too.

Email Marketing Budget Template

Download our email marketing budget template.

Factors Impacting Email Marketing Costs

There are plenty of dynamic variables that go into play when it comes to budgeting for email marketing. To achieve the best results, you need more than content creation and tools.

Here’s a run-through of every factor that influences email marketing costs:

• Size of your list
• Type of campaign
• The quality of email addresses and customer details
• Monthly email quantity
• Email marketing automation tools
• Customer support
• Creative costs e.g. copies and graphics
• Testing

As you scale your email marketing efforts, be prepared to spend more on tools and testing. Be sure you consider all these components when creating your budget.

Stay In Touch With Your Customers Through Email Marketing

At the end of the day, businesses aren’t the only ones benefiting from email marketing — customers also love receiving discounts and promos through emails. Many people check their inboxes for potential sales, exclusive offerings, and new product launches.

At the end of the day, you don’t need to spend a ton of resources to get the best results. All you need is the right email marketing tactics, tools, and team to help you build stronger relationships with your customers.

Hire the right people that can help you achieve your goals. Work with a proven provider from Clutch’s rankings for the leading email marketing agencies. Filter the firms based on average client ratings, team size, and price to match with the perfect partner.