Email Marketing in Small Businesses: Adoption, Budget, and Challenges

Earlier this year we partnered with research firm Hurwitz & Associates on an online survey of small businesses with 1 to 20 employees. (You may remember taking the survey here on this site, back in July.)

The survey was about marketing.  I wrote about the first part of the report last month.  The second part of the report is now out, and it focuses on email marketing.

I think you’ll find the survey results to be interesting benchmarks about how other small businesses are using (or considering using) email marketing.  Here are five notable points from the survey:

Point #1: 46% of small businesses are using email marketing;  and 36% plan to start in the next 12 months.

Point #2: Larger companies that have been in business longer are more likely to use email marketing than smaller, newer firms — at least up until they are 5 years old.  But then as companies get older than 5 years old, the trend starts going in the other direction.  The report notes:

“As companies grow, they are more likely to adopt email marketing. Companies with 2-4 and 5-10 employees are the most likely to have plans to deploy email marketing in the next 12 months. Having outgrown the sole-proprietor stage, these companies are looking to increase sales and revenues to support existing headcount and expand business. As companies get larger, they most likely have already deployed email marketing. Now, they may be looking to deploy a broader marketing automation solution that incorporates email marketing.”

The following chart from the report illustrates this point:

Email marketing adoption by age of small businesses

Point #3: Small businesses that expect revenue growth are more likely to use email marketing. Forty-six percent (46%) of those that currently use email marketing anticipate revenue growth.

Point #4: On average, email marketing accounts for about 15-22% of the total marketing budget for companies that use it.  That’s an eye-opening figure.   I think it reflects how small the marketing budgets are in most small businesses.  Here’s a chart that breaks down the overall percentage of budget by company size:

small business budget percentages for email marketing

Point #5: The top challenges that small businesses have with email marketing are (i) the fear that customers will perceive the email as spam, (ii) that their messages get filtered out, and (iii) that they will have poor response rates.  This chart lists all the challenges (if you are unable to read it the chart can be found on page 8 of the report).

small business concerns with email marketingFor the full report, please go here to download it.  The survey was conducted by Hurwitz and sponsored by Campaigner.

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Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.

13 Reactions
  1. A question regarding #3.

    Is it a link between email marketing and revenue growth? Could you find data in the report, describing how long time it usually takes before you see growth?

    “Point #3: Small businesses that expect revenue growth are more likely to use email marketing. Forty-six percent (46%) of those that currently use email marketing anticipate revenue growth.”

  2. Email marketing can be a very cost effective, but you have to send emails that contribute real value to your customers or you will be perceived as spam. This is especially true since most email users view any irrelevant email as spam (whether they opted into the list or not).

  3. Thanks for the statistics Anita
    I believe that the best way to get people to read your email campaign is to pack it full of value. Too often it’s easy to make all emails offers to buy something which will in time make people on your list immune to the point of never opening the email. If they’re looking for value such as in a newsletter then you have their attention and OCCASIONALLY you can make an offer to buy something.

  4. Hi Anita,

    Your article has some interesting statistics and findings.

    Whilst I do not necessarily see a direct link with a businesses revenue growth and email marketing I do believe that it’s usage is likely to give an indication of overall marketing strategies and digital marketing adoption.

    We are specifically launching a new full service working with both small and large organisations on their email marketing because often even those using it do not have a clear idea of how it fits in with their overall marketing. I also firmly believe that you should always be open with your email subscribers about how often you will send email and what types of topics you will cover. There is nothing more annoying then receiving constant emails from a business when you were not expecting it.

    We will be releasing more details at in the new year on email marketing for small business.

  5. Anita,

    I love email marketing. As long as eNewsletters are kept short and to the point, I feel that people will continue to opt-in and read them.

    I do!

    The Franchise King
    Joel Libava

  6. I believe to really sell people with your email marketing efforts you should at least provide something very useful and tell them straight up that you aren’t trying to sell them anything. Double opt-ined subscribers will also be turned down unless you can really build a healthy relationship with your leads.