In any company it is important to know how valuable your email list is. Especially if you have a blog and rely on subscribers to earn.
To really know what our email list is worth, we need to distribute it to each individual subscriber and look at how much they are worth.
Knowing your subscriber value is the key to being able to estimate your direct revenue from your list and is an important metric for email building. It is even more important than your subscription rate and your unsubscribe rate.
To explain this, the reason this is so important is because I guess you are not just growing a company as a hobby, but you are really trying to make money out of it, right?
And to make money, it is important to understand the different actions that an email makes to purchase.
You and your team need to keep track of 3 key email marketing parameters:
How many open the email
How many click on the link in your emails
How much to unsubscribe
Luckily for us, we can break down these steps into metrics to help us calculate how much our email list is worth with the Click Through Rate (CTR) and the Conversion Rate (CR).
We skim this:
CTR
CTR statistics often come out as undermining. And unfortunately low CTR means less lead in sales that will affect your revenue 🙁
The first step is to find out what the average click through rate is for you to target. Although it is a bit difficult to estimate, as many sources say different things. It also depends a lot on the industry you are in.
For example, according to Mailchimp, email marketing and advertising have an open rate of 16.48% and a click of only 1.74%. That means if you send 1000 emails, 165 will be opened and your link will be clicked by 17 people.
But as you can see here in the Mailchimp chart updated in March 2018, these numbers change dramatically from industry to industry.
Here are some extra tips to boost your CTR:
Build faith
Nail the CTA
Segment and customize
Send emails often (at least once a week) to keep your list updated.
Improve email content
You can always use this CTR calculator if you are not sure about your numbers.
CR
Your sales conversion rate is a great way to track the effectiveness of your message as well as the product behind the message.
In other words, it's the actual percentage of people who gave their email against your lead magnet or the number of people who made purchases against your product.
Math is difficult, so let's use an easy example:
If you send an email to 100 people and 10 people buy your product, then you have a conversion rate of% 10.
And if you have trouble calculating, there are software that can help you with this like Google Analytics.
And like the CTR, there's no perfect percentage to target your conversion rate. It varies from industry to industry.
Here is a diagram of the average conversion rates across different industries according to Smart Insights.
Some tips to boost your conversion rates:
- Explain your offer
Check your landing page and sales page to see what's not working
- Remove some / all distractions from the page
- Pay attention to reference sources
- Test various stimuli
So How Do We Really Know What Our Subscribers Are Worth?
1. Go see how many subscribers you have currently.
This may seem straightforward and straightforward, but consider glossing over your list and pouring layer. Check how many have been inactive for 6 months or more. When I say inactive, I mean those who haven't opened or clicked on any of your emails.
Now, throw them out. Don't feel disappointed if you end up losing more than you thought because you can always create a project to restore them. But more importantly, think of ways to get emails from new people on your list.
After you have done your cleaning, you can now use the current number to calculate how much your email list is worth.
2. Find out how much revenue you made from that list - over the past year
Calculate your direct income from last year.
The reason I suggest calculating last year's income instead of the lifetime value is because your company may not have been operating or has been earning for 3 years. You may not have even actively sold or tracked your income. If you have, please use the last three years in your calculations.
If not, using last year will give you a much better / accurate calculation.
So in the last year you need to calculate 2 things:
How much income did you make directly from your list.
How much revenue did you make indirectly from your list.
Yes, there is a difference.
What I mean by "direct" is the income you made from people opening the email, clicking on the link, entering their payment information and buying something. These are benefits you have made by sending the email.
Email list is a tool and should be reviewed. Use this formula to find out how important the listing is.
Erik Severinghaus
Founder, CEO, SimpleRelevance
Twitter icon
Facebook icon
LinkedIn icon
Start-ups are inherently cash-strapped, but they're also inventive. Many have tools they do not know they should value. These tools can be more esoteric (brand value, customer sentiment) or tactical (email lists, Twitter followers, Facebook likes).
At a time when intangible assets represent a growing percentage of a company's book value, it is mysterious that standards have not yet been developed for valuing these types of assets. As William Edwards Deming put it, "You can't handle what you don't measure," and without evaluating the preliminary information tools, it's almost impossible to optimize the value and provide evidence of development.
Proof of development
One tool most start-ups and existing businesses have is a customer email list. While email lists do not seem to be a valuable tool, they are. All the buyers listed are voluntarily entered, so getting started can provide you with regular updates, promotions, and other interesting content. If done correctly, each message should create loyalty and ambassadors for your product or service. For example, if startups A and B are the same, but launcher A has an email list with 5 million login addresses, then it certainly costs more than B getting started.
But how much more? How would you rate this tool?
The first way to address this issue is to use "replacement cost". How much does it take to add individual subscribers to the list? Let's say in this case, a company would have to spend an average of $ 10 per subscriber using Adwords or other PPC advertising tools to come up with a list of this size - worth about $ 50 million.
This is the beginning, and he puts the stake on the floor. However, the formula assumes that all email addresses are created equally (not) and that the effectiveness of campaigns is generally comparable (not). So what is the true value of email content?
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Product Solution
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The formula
Information assets model in the same way that bankers model the value of a financial asset: the discounted cash flow you can expect. For each submission, track:
Open price: marked "O"
Click rate: marked "C"
Purchase rate: marked "P"
Total revenue: "TR"
Margin of Revenue: "PM"
Unsubscribe rate: marked "U"
With these, we can make the most of a contribution from an email.
O x C x W x TR x PM = Pc (income contribution via email)
The next step is to model how much you can expect from an individual before they unsubscribe. The easiest way to do this is to measure your opt-out rate. If you divide your purchase rate by your opt-out rate, you can estimate the number of purchases before someone unsubscribes.
P / U = Pe (purchase expected)
Multiply that by revenue contribution and we get the email we expect from each email.
Pe x Pc = PE (earnings by email)
A deeper dive
Careful readers will notice that different email addresses may have different values, and some people (who open and click a lot) are more likely to opt out than others. For this reason, it makes no sense to send everyone an email as often as you can to earn more money by segmenting.
You can easily calculate these metrics using advanced tools. Numbers are easily influenced by technology, such as customization, that can improve your opening, clicking, and purchasing rates. Using Excel and some basic email metrics, you can use these methods to get even a basic idea of the value of your listing, which can be refined later.
As buyers, we have an ongoing responsibility to prove the value and provide the suppliers.
To really know what our email list is worth, we need to distribute it to each individual subscriber and look at how much they are worth.
Knowing your subscriber value is the key to being able to estimate your direct revenue from your list and is an important metric for email building. It is even more important than your subscription rate and your unsubscribe rate.
To explain this, the reason this is so important is because I guess you are not just growing a company as a hobby, but you are really trying to make money out of it, right?
And to make money, it is important to understand the different actions that an email makes to purchase.
You and your team need to keep track of 3 key email marketing parameters:
How many open the email
How many click on the link in your emails
How much to unsubscribe
Luckily for us, we can break down these steps into metrics to help us calculate how much our email list is worth with the Click Through Rate (CTR) and the Conversion Rate (CR).
We skim this:
CTR
CTR statistics often come out as undermining. And unfortunately low CTR means less lead in sales that will affect your revenue 🙁
The first step is to find out what the average click through rate is for you to target. Although it is a bit difficult to estimate, as many sources say different things. It also depends a lot on the industry you are in.
For example, according to Mailchimp, email marketing and advertising have an open rate of 16.48% and a click of only 1.74%. That means if you send 1000 emails, 165 will be opened and your link will be clicked by 17 people.
But as you can see here in the Mailchimp chart updated in March 2018, these numbers change dramatically from industry to industry.
Here are some extra tips to boost your CTR:
Build faith
Nail the CTA
Segment and customize
Send emails often (at least once a week) to keep your list updated.
Improve email content
You can always use this CTR calculator if you are not sure about your numbers.
CR
Your sales conversion rate is a great way to track the effectiveness of your message as well as the product behind the message.
In other words, it's the actual percentage of people who gave their email against your lead magnet or the number of people who made purchases against your product.
Math is difficult, so let's use an easy example:
If you send an email to 100 people and 10 people buy your product, then you have a conversion rate of% 10.
And if you have trouble calculating, there are software that can help you with this like Google Analytics.
And like the CTR, there's no perfect percentage to target your conversion rate. It varies from industry to industry.
Here is a diagram of the average conversion rates across different industries according to Smart Insights.
Some tips to boost your conversion rates:
- Explain your offer
Check your landing page and sales page to see what's not working
- Remove some / all distractions from the page
- Pay attention to reference sources
- Test various stimuli
So How Do We Really Know What Our Subscribers Are Worth?
1. Go see how many subscribers you have currently.
This may seem straightforward and straightforward, but consider glossing over your list and pouring layer. Check how many have been inactive for 6 months or more. When I say inactive, I mean those who haven't opened or clicked on any of your emails.
Now, throw them out. Don't feel disappointed if you end up losing more than you thought because you can always create a project to restore them. But more importantly, think of ways to get emails from new people on your list.
After you have done your cleaning, you can now use the current number to calculate how much your email list is worth.
2. Find out how much revenue you made from that list - over the past year
Calculate your direct income from last year.
The reason I suggest calculating last year's income instead of the lifetime value is because your company may not have been operating or has been earning for 3 years. You may not have even actively sold or tracked your income. If you have, please use the last three years in your calculations.
If not, using last year will give you a much better / accurate calculation.
So in the last year you need to calculate 2 things:
How much income did you make directly from your list.
How much revenue did you make indirectly from your list.
Yes, there is a difference.
What I mean by "direct" is the income you made from people opening the email, clicking on the link, entering their payment information and buying something. These are benefits you have made by sending the email.
Email list is a tool and should be reviewed. Use this formula to find out how important the listing is.
Erik Severinghaus
Founder, CEO, SimpleRelevance
Twitter icon
Facebook icon
LinkedIn icon
Start-ups are inherently cash-strapped, but they're also inventive. Many have tools they do not know they should value. These tools can be more esoteric (brand value, customer sentiment) or tactical (email lists, Twitter followers, Facebook likes).
At a time when intangible assets represent a growing percentage of a company's book value, it is mysterious that standards have not yet been developed for valuing these types of assets. As William Edwards Deming put it, "You can't handle what you don't measure," and without evaluating the preliminary information tools, it's almost impossible to optimize the value and provide evidence of development.
Proof of development
One tool most start-ups and existing businesses have is a customer email list. While email lists do not seem to be a valuable tool, they are. All the buyers listed are voluntarily entered, so getting started can provide you with regular updates, promotions, and other interesting content. If done correctly, each message should create loyalty and ambassadors for your product or service. For example, if startups A and B are the same, but launcher A has an email list with 5 million login addresses, then it certainly costs more than B getting started.
But how much more? How would you rate this tool?
The first way to address this issue is to use "replacement cost". How much does it take to add individual subscribers to the list? Let's say in this case, a company would have to spend an average of $ 10 per subscriber using Adwords or other PPC advertising tools to come up with a list of this size - worth about $ 50 million.
This is the beginning, and he puts the stake on the floor. However, the formula assumes that all email addresses are created equally (not) and that the effectiveness of campaigns is generally comparable (not). So what is the true value of email content?
ADVERTISEMENT
Product Solution
You need to improve your business and win customers
American Express has financing and card solutions that give you the best ideas in life and keep your customers smiling.
The formula
Information assets model in the same way that bankers model the value of a financial asset: the discounted cash flow you can expect. For each submission, track:
Open price: marked "O"
Click rate: marked "C"
Purchase rate: marked "P"
Total revenue: "TR"
Margin of Revenue: "PM"
Unsubscribe rate: marked "U"
With these, we can make the most of a contribution from an email.
O x C x W x TR x PM = Pc (income contribution via email)
The next step is to model how much you can expect from an individual before they unsubscribe. The easiest way to do this is to measure your opt-out rate. If you divide your purchase rate by your opt-out rate, you can estimate the number of purchases before someone unsubscribes.
P / U = Pe (purchase expected)
Multiply that by revenue contribution and we get the email we expect from each email.
Pe x Pc = PE (earnings by email)
A deeper dive
Careful readers will notice that different email addresses may have different values, and some people (who open and click a lot) are more likely to opt out than others. For this reason, it makes no sense to send everyone an email as often as you can to earn more money by segmenting.
You can easily calculate these metrics using advanced tools. Numbers are easily influenced by technology, such as customization, that can improve your opening, clicking, and purchasing rates. Using Excel and some basic email metrics, you can use these methods to get even a basic idea of the value of your listing, which can be refined later.
As buyers, we have an ongoing responsibility to prove the value and provide the suppliers.
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