Email remains a powerful and cost-effective tool for content delivery and marketing offers. It’s important to understand the value of a new email address to ensure effective email marketing strategies. To calculate the value of a new email address, you must take into account the revenue generated through various email campaigns, the expected life of an email address, segmentation, and fudge factors.
To determine how much revenue you get from your various email campaigns, list all the possible ways your business generates revenue through email. This may include ad revenue from content emails, web traffic, direct sales, subscription sales, events, affiliate sales, lead generation, and data from surveys. You can come up with a reasonable estimate of your monthly revenue from each source, but attribution is a fuzzy science.
Calculating the expected life of an email address is complicated by many factors. Typically, the average longevity of an email address is 1 divided by the loss percentage. So, if you lose 5% of your list every month, your average customer will stay on your list for 20 months.
When calculating revenue, it’s important to consider segmentation and fudge factors. Not all email addresses will have the same value and it’s hardly possible, and certainly not worth your time, to separate them all and do all the necessary calculations for each group. Therefore, it’s important to give yourself a discount and rank the sources of emails from least to most valuable.
By understanding the true value of a new email address, you can make informed decisions about how much to spend on email acquisition efforts. You don’t want to spend the “average value of an email” on campaigns that get low-quality results, but nor do you want to scrimp on campaigns that bring in your top performers.
Originally reported by Martech: https://martech.org/unlocking-the-true-value-of-a-new-email-address/
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