How to calculate your ROI on Klaviyo

Find the podcast episode and full show notes over at

Well hello hello! Catherine Langman here – welcome back for another episode of the Productpreneur Success Podcast!

Recently, I’ve been talking quite a bit about the most effective strategy to generate the best return on investment with your paid advertising. 

Specifically, how using email marketing correctly helps you to increase your profitability on your paid ads, whether that’s Facebook or Google ads. 

The benefits of email marketing using Klaviyo

Using Klaviyo with your ads helps increase your ROI in two ways: firstly, because on average only 2% of your website visitors will convert into buyers, which leaves a lot of wastage on that paid traffic. But when you make it enticing and easy for website visitors to subscribe to your list, you can potentially double the number of customers who buy from you. And obviously this will increase the ROI on that paid traffic.

The second way Klaviyo improves your return on ad spend is by integrating your lists and segments in Klaviyo, directly into your ad account. And because your email subscribers have given you permission to track their browsing behaviour, you can use your lists and segments to create much higher quality audiences in your ads manager, which helps the Facebook ad algorithm to find your ideal customers more easily and profitably. 

So that all sounds absolutely wonderful and amazing, and it really is. 

But what about just on its own: how profitable can your Klaviyo account be and how do you influence that and measure that?

So that’s what I’m going to be diving into during today’s podcast episode. And for any of you who have listened to me or read much of my content or worked with me in any way, shape or form, you will know how much I love email marketing and how important this channel has been to the success of my own businesses over the years! 

So the question is, is email marketing still a valuable asset to your brand? 

It’s been a number of years since I’ve noticed a trend, especially amongst new businesses, who seem to act like Instagram is basically their marketing strategy, with the assumption that email is dead. People receive a million emails a day, so it seems too hard to be noticed in the inbox, and anyway, email is like soooo 20 years ago. 

But, these business owners fail to realise that they don’t actually own their own audience on Instagram and they can lose access to that audience at any moment without notice. And many do. It can be completely detrimental to a business when it happens.

The answer is Yes, a thousand times, yes, email marketing is a hugely valuable asset for all brands, even today in late 2022!

Today, digital advertising is constantly evolving with new ways to communicate and market to your customers coming onto the market all the time. Hello TikTok. 

However, no matter how many other innovative marketing platforms emerge, email marketing still remains at the head of the leader board when it comes to reaching and engaging with your audience, and in terms of generating a profitable ROI. 

Email is your direct line of communication with your most engaged customers and potential customers, in a way that no social media or Google ad is or could ever be. Email offers you the opportunity to share your stories, products and offers with subscribers who want to hear from you, and also opens up a direct and personal 2-way conversation with those subscribers.

And possibly even more importantly, your email database is an audience that you do own. No change of algorithm or decision by Mark Zuckerberg could take it away from you.

Email marketing is the most accessible and affordable option for businesses looking to grow their business with an ROI that is hard to walk past. Many marketers fail to realise that the average ROI for email marketing is a staggering 3800% – many times higher than any other digital marketing channel.

Some more averages for you include:

Conversion Rates are at least three times higher on email than on social media.

Four percent of email marketing traffic will make a purchase compared to two percent of search engine traffic and less than one percent of social media traffic.

Online stores typically recover seven to ten percent of their abandoned carts with email. 

Shoppers spend 138% more when marketed to through email than those who don’t receive email offers.

There are currently 3.9 billion daily email users globally, with that number expected to hit 4.3 billion by 2023.

And finally, on average, brands that switch to Klaviyo from other email platforms see an increase in revenue of 46% in just two years, pocketing an average of $68 for every $1 spent on their email marketing platforms.

If these figures and statistics aren’t compelling enough, I don’t know what is!

So, how do you actually calculate your ROI on your email marketing?

Email Marketing ROI or Return on Investment is precisely what it sounds like. It is a measure that is used to evaluate the effectiveness and profitability of an investment. In this case, it is the measurement of the profitability of email marketing. 

To calculate your ROI, you take your Net Gain and divide it by your Email Costs.

Net Gain (Profits derived from email marketing – email marketing costs)/Email Marketing Costs

You can easily figure out your net gain by navigating to your Klaviyo Performance dashboard where it’ll tell you the portion of your overall revenue that is attributable to email marketing. So you take that figure, and then deduct the cost of your Klaviyo subscription. 

That gives you the Net Gain figure, and then you divide that by the cost of your Klaviyo subscription.

The other useful way to review your Klaviyo performance, or assess whether the ROI you currently enjoy is the best it can possibly be, is to compare your company performance with Industry Benchmarks.

Industry Benchmarks represent the average key numbers collected from many different businesses and then sorted into the industry. Klaviyos Benchmarks are formulated in much the same way.

Klaviyo actually publishes these benchmarks in the help section on their website. You can see it by navigating to:

But this really is a useful way to assess your returns that you’re currently getting. 

We do this with our clients, because we always want to be at least meeting these benchmarks, preferably exceeding them. It’s a really excellent guideline that tells you how good your results are and also shows you the areas you have the potential to improve in.

For example, I was auditing a Klaviyo account a couple of weeks ago for a brand that knew they weren’t getting as much as they could from their account. They knew this because they actually weren’t sending any campaign emails at all, their list was not growing very quickly and they only had three automated flows built out. 

What I found was that, of their three flows, only one was meeting industry benchmarks, whilst the other two were woefully under-par. And the form submit rate on their opt-in form, meaning how many people actually subscribed, was also very below average. 

By using the industry standards, I was able to show them with independently verified data, what potential they stood to achieve simply as a result of improving the opt-in form, improving the under-performing flows, building out the missing flows, and sending regular EDM campaigns.

They quickly discovered they were missing an enormous increase in potential monthly revenue and by implementing this in their business, not only would revenue increase, but it would immediately improve their ROI on their email marketing. Meaning profitability would also increase markedly.

So how do you go about improving your results, make more money and therefore ROI from your Klaviyo email marketing?

The starting point must be measuring your performance against the industry benchmarks. It’s actually impossible to know if you’ve improved anything in business or in life if you don’t work out what your current results are. 

Then, it’s about two things:

  1. Improving each benchmark – open rates, click rates, conversion rates, average order value. And,
  2. Adding more contacts into your Klaviyo account.

Point number two is reasonably simple (though not necessarily easy) to fix: you need to drive more traffic to your website where you should have methods for website visitors to subscribe to your list, such as a popup opt-in form.

You can also use other ideas like a giveaway promo, or a collaboration with another brand for example, which are two other excellent ways to grow your list.

Always be list-building needs to be your mantra here though. Because, hopefully quite obviously, if you don’t have many people subscribed to your Klaviyo account then the actual dollar figure amount generated by this marketing channel won’t be much. So, even though Klaviyo and email marketing in general typically enjoy massive conversion rates compared to other channels, as we’ve spoken about, if the number of contacts in your database is small then it’ll be like 6% of not much. 

And I know when you’re at the starting point or early stages of your business or of your list-building and email marketing efforts, that can feel really discouraging. 

But please take it from me – much like trying to get fit, it takes consistency.

It’s like that old saying – if you want to enjoy shade from a tree, when’s the best time to plant the tree? 20 years ago. When’s the second best tine? Now. And then water it and nurture it consistently and it’ll grow.

For traffic generating strategies that are working right now, though, I would recommend listening to my recent podcast about social media advertising, which is episode 144. You can find it at

Improving each benchmark

Point number one – improving each benchmark – is probably the one I see most brand owners struggle with the most. 

I mean, have you ever struggled with the issue of not knowing what to put into your emails? And even when you have a good idea, how do you write it? How do you present it visually? 

It can feel like a topic that goes into the too-hard basket most of the time, with the result that consistency is just not happening and many brand owners resort to sending the occasional email about a discount sale promotion. 

Which is not going to get you anywhere good. In fact, you’ll ultimately end up building a database of customers who only buy when presented with a deep discount. And when you build that kind of audience, it’s really hard to re-position to a more value-driven audience.

So to help you with this struggle, I have two tips:

  1. Get one or two professionally designed templates created and setup for you inside your Klaviyo account. If you are not a designer, you shouldn’t be the one trying to create beautiful looking emails, it’ll just take you too long to execute and then the whole task either blows out into a mammoth project or you just won’t do it.

But at the same time, you also need to accept that your subscribers and customers will respond better to a well-designed piece of communication. In general, consumers have short attention spans and are mostly reading your emails on their smart phone. So to capture their attention, make it easy to read and consume your content so they can very easily understand what you’re on about and where and how to get it, you need to employ good visual communication skills. Which is where a professionally-designed template will pay dividends for you.

  1. Prepare your content plan in advance. Your content or promo plan is the backbone of your marketing plan and it’ll make it really easy for you to then know what content you need to create each week for your emails and your social media, as both channels ought to be tying in with each other.

No more having to think it up on the fly or at the last minute!!

I’m not going to explain the process of coming up with your content or promo plan in this episode, but a good start would be going back to listen to my podcast from a couple of months ago, which was all about how to create a goal-crushing marketing plan for your brand. It was episode 123 and you can find it at

I will of course link to both those podcast episodes in the show notes of this episode, to make it nice and easy for you to find them.

Last but not least, I want to make one final mention about measuring your performance metrics or your results from your email marketing. You need to do this on a regular basis – we do it weekly and monthly. 

You also want to keep an eye on the Performance dashboard inside your Klaviyo account. I want to see a good 25% on average of your overall revenue being generated by Klaviyo, as this is also a great indicator of a profitable brand.

Alrighty guys, that’s it for today’s episode. We’ve covered the compelling statistics about how profitable email subscribers are to your business, we’ve discussed the incredible ROI that email marketing can produce for your brand. We’ve covered how to measure your own ROI and assess your performance against industry benchmarks, as well as two ways you can grow and improve your results.

I’d love to be hearing from you guys on this topic – hit me up in our Rockstar Productpreneur Facebook group or send me a DM on Instagram – let me know how you’re going with your email marketing, where you feel like you’re winning or where you feel like you’re struggling.

Hopefully I’ll see all of you enjoying improved growth and results with your email marketing over the coming months, like our fabulous client Inspirational Tea Co whose case study I shared earlier this year. You can find that at in the Client Work menu. But when we started working together, she was making no money from her email list at all. She was sending emails and did have subscribers, but they weren’t converting at all.

Now, many months later, she is not only generating a lot more revenue, but is also way more profitable given a really healthy portion of her sales are being generated from her Klaviyo account. Which is incredibly exciting and something I want for all of you too.

Hopefully you’re feeling super motivated to replicate this in your own business and really get the most value from your Klaviyo and your email marketing channel. 

And to do that, you have 3 choices: figure it out alone via trial and error, learn from someone else who already knows how to do it, or outsource it. 

Each is a valid choice, and each will take varying lengths of time. 

If you’d like to speed up the process of learning or implementing and getting results faster, please reach out to me because there are a variety of ways I can help you depending on the stage of business you’re at.

This is what I do and love to do every single day. Whether you’re looking for coaching to help you to learn and implement these things, or if you’re looking for a team of experts to outsource to, just head over to to find out about working with me.

That’s it for today’s episode and I hope you’ve enjoyed it. If you did, I’d be forever grateful if you’d share it with one or two of your business besties. Especially if you know they’re looking to master email marketing for their brand this year. It’s super easy to share – just click on the icon next to the podcast on whichever platform you listen to it on, copy the share link and then send it in a message to your friends.

But now – have a fabulous day and week and I’ll be back on the show with you again next week!