Often, I am asked, “Why does the size of an email list matter?”
To answer this question let’s think about magazines and how a successful magazine operates.
Magazines build a list of subscribers, and then the number of subscribers determines the advertising rates and the magazine’s revenue earned.
Email is very much like a magazine, except instead of people paying to be a subscriber for a magazine, people optin to your email list.
Why Email Numbers Matter
Open Rates– The first email metric that is important is the open rate. The open rate is the number of people that open the email compared to the number of people whom the email was sent. Normally this number is presented as a percentage. For example, if you send an email to 10,000 people and 2,000 people open the email, then you have a 20% open rate.
Why does this number matter?
Open rate is important because it tells you how engaged your email subscribers are. If for instance, you have an open rate of 5% then for some reason the people on your list are not responding to your emails. This could be because of several reasons such as:
- Not a Targeted Audience– The way you are building your email list is not very targeted. You want to build a list of subscribers that have a commonality. It could be based on interest or topic, or a desire to achieve a certain goal.
- Content- The content in your email is falling flat with your audience. For some reason, the content that you are providing is not resonating with the expectations of the subscribers when they signed up to join your list.
- You are not sending enough emails – Think of the emails that you are sending as building a relationship with your list. How often do you communicate with your list? If you are only communicating with the people on your email list once a month or less, then it is easy for the people on your list to forget who you are. Plus, if you are only sending one email a month, you are asking that one email to pull a lot of weight of your entire marketing campaign.
- You are sending too many emails – So this is where you have to know and understand your list. Often the people that send emails every day earn the most money. This may be true for some, but there may be a price to pay for sending an email every day. The price is fewer opened emails, fewer people reading your emails, and fewer people clicking and purchasing the offers in the emails. This is where knowing and understanding who is on your email list and their preferences is paramount.
GetResponse recommends sending at least one email per week at minimum.
Click Through Rates -A second metric is click through rate. Click through tells you how many people are clicking on the links in your email. The more people who are clicking then, the more engaged of an email audience you have. Subscribers opening an email is important. People clicking on the links is even more important. A good click-through rate verifies that your content and your offers are resonating with your audience.
Revenue per email – Revenue per email is calculated by dividing the revenue earned by the number of emails sent. This number should be calculated on an annual, monthly, weekly and on a per email sent. For instance, calculating the Revenue Per Email on a yearly basis gives you a baseline for the entire year. Monthly and weekly calculations allow you to compare how well your email list is performing compared to the baseline yearly average. Daily calculations let you know how each email promotion is performing compared to the annual baseline.
Monetary Value of Each Email Subscriber– This calculation is dividing revenue by the total number of subscribers. This metric is important because it allows you to determine the health of your overall email list compared to the cost per new email acquisition. For instance, if you earn 100,000 from your email promotions and you have 10,000 subscribers, then each subscriber is worth $10. Now if it cost $2.50 to acquire a new email subscriber then essentially you are earning $7.50 for each new subscriber being added to your email list. Once you establish that the revenue per subscriber is greater than the cost to acquire a new subscriber (ad spend/# of new subscribers).
How does the number of email subscriber’s impact revenue and profit?
Now consider how the number of subscribers impacts your overall bottom line and profit.
Imagine you have 2,500 subscribers, and each subscriber is worth $5 per month to your business.
What if you increase the subscriber count to 5,000 people and each subscriber is still worth $5. You essentially double the business’ revenue.
Here is one more example.
If you have a 10,000-person email list and on average 30% of the people open your emails, then 3,000 people are reading your content with each email. If a half of one percent of the people who open your email purchase that is 15 people. Let’s suppose the product’s price is $300, that is $4,500 in revenue. And then the next week you send another email with another offer. This is the power of an engaged email list. Of course, this is a hypothetical example, but a realistic example of what can email can accomplish.
Now imagine an email list with 20,000, 30,000, or 50,000 engaged subscribers.
How would this impact your business, revenue, and profit?
How would this impact your bottom line?
How would this change your business and your life?