Let us first describe what an email list is. Every business has multiple email lists, which are essentially a list of contacts. These contacts may be individuals or an address that belongs to an entire business. Email lists can be bought or built through good old-fashioned digital marketing.
If you have subscribed to a newsletter or signed up for a special coupon code for some product, you likely gave your email address and are part of an email list.
The account age of a subscriber does not matter as long as there is no hard-bouncing emails or contacts. If you have content that gives your subscribers great value, you are sure to keep engaged customers who've made a purchase years ago and love getting your emails.
Learn about hard-bouncing emails and how to delete them here.
Keeping an updated email list is important in order to:
- Maintain audience relationship.
- Keep a consistent marketing technique in your overall marketing strategy.
- Keep your business relevant in its industry and globally recognized.
It shouldn't be too complicated to go over how to calculate the value of your email list, so let's begin!
- What Is an Email List?
- The Value of an Email Name
- How Much Is Your Email List Worth?
- Knowing the Value of Your Subscribers
- How to Calculate Email Subscriber Value
- What's the Rate for the Average Email List?
- Should You Buy an Email List?
- Tools to Value Emails
Your email address name should be unique and are important in building relationships. This address will be cognizant of your business and should be memorable yet informative about who you are.
Keep in mind that you may want separate email addresses for your business based on how it will be used. If you want to address customer questions, you can direct visitors to your support email, which may look something like firstname.lastname@example.org.
Notice these examples have their business name in the email. It's rarely something like email@example.com or firstname.lastname@example.org. You want your business name to inform the subscribers of what your business is and who you are. It also can denote the goal of the email, such as 'support' or 'help' or 'returns' or even 'hiring' may be used in the email address along with the business name if it is an address for visitors to apply for a job within that company.
So, how much is your particular email list worth? You can read the section on how to calculate your email subscriber value, but what if you want to know how to calculate an entire list? Let's do some math.
You can look at your annual subscriber value if you know how much you've made years ago. Over the years, you should be able to know the period between the first and last purchase from your sales. Let's start by dividing your subscribers into three groups:
1) Those who made a purchase only once
2) Those who purchased something in the last 2 years
3) Those who purchased something in the last 3 years
Note that these categories are different from each subscriber's account age. We want to calculate the subscribers who have actually contributed to your sales. Now here's how to calculate the value of your average email subscriber over the years.
70,000 x 10 = $700,000
70,000 x 20 = $1,400,000
70,000 x 30 = $2,100,000
When you add these total dollar amounts together, you get $4,200,000. Now you can continue figuring out the lifetime value of each subscriber. To do this, divide your total amount of $4,200,000 by the number of subscribers you have, which is 250,000 in this example.
This means the total lifetime subscriber value is $16.8. Almost $17!
Now that we devised that the subscriber value is about $17, then an email campaign that costs $60 or even $20 would be a loss to your business. But with even $10 or $15 expenses, you will get benefits for the costs.
This is why it can take time to calculate the value of your subscribers. But by doing this, you can incorporate these statistics into your estimated ROI and overall budget. It will be up to you if you believe your business is worth spending more on email marketing. It all depends on the value you suspect each subscriber is worth when you first start a business.
Inactivate users by looking over email analytics to see who hasn't opened your emails. Here are other equations to help you figure out the value of an email subscriber if your business does not have years of sales to work with.
- Revenue per subscriber (RPS) = monthly email revenue divided by the number of total subscribers
- In order to find your (RPS) of a campaign = total revenue from specific email campaign divided by the number of subscribers sent to for that campaign
If you see a pattern or major difference between the number of subscribers and the monthly revenue from month to month, this may be due to the type of content or campaigns you send. Perhaps you've had better revenue and more email addresses signing up for newsletters because these newsletters have offered special deals. You may also find subscribers dwindling when you are consistently only sending informative email campaigns that do not benefit the email subscribers.
Next, gather the number of emails you send out. This will vary from business to business. Now take a look at the number of email addresses or subscribers you send to. If you know how much you've made thus far, you can divide this by the value of your subscribers.
How do you know the value of your subscribers? Great question.
Knowing the value of your subscribers can help you determine how much your email list is worth and how much you should really spend on an email list.
You can do other things if you know the value of your subscribers, such as viewing an analysis on the click-through rate (CTR). This will help with your overall email marketing efforst by understanding what people tend to click on more to be directed to your landing page, sales page, webinar, etc.
Ignore the rate at which subscribers click on your email. We will just focus on some facts and what you need to know to figure out what each individual subscriber is worth to you and how much each individual campaign is worth.
- The average worth of subscribers per 1,000 emails is about $100-$400
- You'll need to know customer lifetime value (CLV) to determine if your campaign ROI is worth it to continue sending.
These help with determining the campaign value as well as what each subscriber is worth to your business.
CTR, which you know by now, is click-through rate. This means any link in your marketing emails that direct audiences to another page will contribute to the CTR once it is clicked on by someone who opens the page. It will essentially show the engagement of your email. If people click on multiple links in your email, however, this still only counts as one click.
It may not be contributing to your sales, but by having people travel to your sales page or website and open it will likely contribute to a sale or return purchase.
Many email messaging apps will display these metrics for you. If you can only see the number of people who clicked on a link per email, you can still find your CTR.
- First view the number of people who've clicked on a link to travel to another page (X)
- Then determine the number of emails you've sent (Y)
- Divide the total number of people who've clicked (X) by the number of sent emails (Y)
- Multiply this number by 100 to arrive at your CTR
You will want to compare your CTR to the sales you make each month. Following your audience's engagement per email campaign is a huge part of email marketing and surprisingly doesn't take up a lot of time if get the right email messaging platform.
Our Messaging app has solutions for growing businesses that don't have time on their hands to do the math shown here. Check it out below!
It's important to calculate the subscriber value in order to see if you are gaining or losing money in your email marketing efforts.
To calculate email subscriber value, you should know two things: your total number of subscribers (X) and your total sales thus far (Y). You can see how we calculate the value of each subscriber in the formula below.
X = 250,000
Y = $2,500,000
Subscriber Value (SV) = $10 per year
We hope this helps you figure out the value of each subscriber for either your entire email list or for individual campaigns. When done correctly, the calculations can give solutions in what content to post in your campaigns to gain a higher ROI and what type of email marketing people respond to best.
Email subscriber value, as discussed before, is the most important measurement when it comes to building a list of email addresses.
To get the rate for an average email list, the rule of thumb is this: a click-through rate or CTR of 3.2% means you are getting 320 clicks directing people to your landing page, product page, or homepage on your website. On average, businesses get a 2% conversion rate, meaning they convert leads into customers who contribute to their sales.
It's important to understand the rate to estimate how much revenue you can gain from those email campaigns, based on the CTR and conversion rate. If the CTR is 5%, then you get 500 clicks to your sales page, landing page, or website. It's likely you could have a 3% conversion rate, which is only 15 orders. If you need to make $2,500 to satisfy your ROI for the week, then you will still come up short $166.66 for each order.
Now let's talk about the cost of an email list on average. You can compare these with the rate for an average email list to see if paying a certain amount per X number of emails will be worth it for your business.
The price of an email list depends on the quality (i.e. content) of the emails and the type of people, your audience, on the list. Here are some factors that affect the cost of an email list:
- CPM Stands for "cost per mille", or cost per 1,000 emails.
- A consumer list generally costs between $100 and $400 per thousand emails (CPM).
- A business list costs $600 to $1,000+ per thousand emails (CPM).
- List prices vary based on who is on the list. An email list that is more targeted is more expensive. Business to business email lists are more expensive than consumer email lists.
- When you buy an email list, you typically only purchase a single use.
What does this have to do with how much an email list is worth? On average, as you can see, each subscriber costs $1 per month. This can help you calculate if you are buying into a good email list or not.
Regulations like GDPR may affect, legally, who buy lists. Please look into your location and the rules and regulations surrounding your particular situation when trying to legally buy an email list. These lists you can buy are often safelists, or email lists of other businesses who have agreed to receive your marketing emails.
It is usually a better idea to build an email list instead of buying one. You can easily build a list of email addresses based on marketing efforts other than email marketing. Of course, you will be asking for email addresses, so it is a good idea to create quality content and remain consistent in your communication with the number of contacts you have.
You can build a list of emails by sending marketing campaign messages that give thanks to current customers, offer discounts, or any other valuable offer that benefits your audience and entices them to make a purchase.
If you have a larger business with an already high CTR, buying an email list may be worth investing in.
Here is a helpful online tool from contentwok.com that may help when determining your email list value. An example of information found from another business is shown below.
American Express gives a great formula to explain how you can calculate your profit contribution per email and expected purchases all based on your click-through rate, open rate, total revenue generated, as well as unsubscribe rate. Check it out here!
Ultimately, what your email list should be worth depends how much you can justify the costs and what the return will be for your business. It may be best to not put too much money up front until you gain subscribers and a higher ROI if you are just starting to launch your business.
If you play your cards right, however, you could soon be considering putting more money into email marketing as the value of your subscribers and total email list grows.
Want to learn more about email messaging and email lists? Check out our newsletter.
If you are thinking of setting up email messaging for marketing and sales purposes, we also have a a great Messaging app that includes high-converting templates to grow your ROI.
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