In recent Relevancy Group survey we found that just 30% of email marketers surveyed knew the value of their email subscribers/value of their address. This is a critical metric for any email marketer to know. Why? It is necessary for a few reasons.
- Bench-marking your progress to industry peers. The DMA has stated that for each dollar spent on email it delivers about a $40 dollar return. Understanding email subscriber value will help you determine which subscribers are profitable and driving revenue and which might require more engagement.
- Acquisition costs. It is impossible to know which acquisitions are performing best without understanding the costs that those sources are having on the potential value they drive.
- It is your currency. The third and most important reason to know the value of your email subscribers is that this number is your currency to gain more budget dollars. No doubt the valuation will get your coworkers and bosses attention and is an important proof point to the ROI (Return on Investment) of your efforts.
How to approach determine subscriber value? There are several ways, the most basic is understanding the cost that it took you to acquire them – they are at least worth that much. The other is to divide revenue into your active email subscribers, those that are engaged over a specific period of time. But that too can be rather general. What we’d suggest is downloading our Email Valuation Calculator that we developed in partnership with The Email Experience Council. Download the Email Valuation Calculator for free with registration, which was featured in the book ‘Email Marketing an Hour a Day.’