I (and the rest of the email marketing community) have been preaching the importance of relevancy and subscriber engagement for some time now. Bet at some point it’s had you wondering “So which is more important – growing my mailing list (i.e. extending my audience and client base), or focusing on engaging my existing subscribers?”
Of course, the answer is that both are pretty important things to focus on, but it is a tough issue. You want to get the word out as much as possible, to attract new subscribers, yet you don’t want to risk losing loyal subscribers because you’re flooding them with emails.
Email marketers know that there are multiple benefits to email marketing – brand awareness, top-of-mind with your audience, web traffic and, most importantly, solid relationships with loyal customers who may go on to become some of your best brand ambassadors (word of mouth). Unfortunately, top level management doesn’t always see the value of these benefits, nor the time and craft that goes into creating and managing such campaigns. When you have a range of products or services to sell, you want to punt them all actively. We want click-throughs and sales - which is fair enough, but not always worth the risk of losing your long-standing customer relationships.
That’s where determining your subscriber value comes in. Knowing how much your subscribers are worth can help you decide whether you want to focus on building brand awareness, or pushing sales and promotions.
How to do it:
Look at how many new subscribers you’ve had over the past year. Campaign subscriptions generally vary according to how long the campaign has been running, and lists fluctuate, so look at the average number of subscribers you had every month.
If your email marketing account is integrated with your Google Analytics, you should be able to determine a rough conversion rate based on how many purchases have been made by subscribers who clicked through to your site from your emails. The number of conversions you had should help you determine how much money you made from your email marketing campaign. Subtract your expenses (the money you spent on your email campaign – including account and credit cost, but also the money paid to employees for their time spent on the campaign) to get the net profit of your email campaign. Divide this by the average number of subscribers you had to determine the value of each subscriber.
And now what?
The cost of getting a subscriber is low – they sign up for free, don’t they? However if you spend more money on your email marketing than you make from it, you probably want to push your subscribers with a stronger sales call. A clearer call-to-action or a promotional discount are good ways to drive more sales.
Most importantly, subscriber value also represents how much an unsubscribe is costing you – a good indicator of how strong a focus you should have on building reader engagement and subscriber loyalty! It also gives you a benchmark figure to work from and compare against in future.
Don't forget: When all's said and done, you'll get as much value from your subscribers as you give them. Want to make more revenue off them? Give them more valuable content.
Image courtesy of Renjith Krishnan.