Email Marketing: What’s a Subscriber Worth?

An important ratio to know in email marketing

Isn’t it great when you can use an absolute single metric when going through your customer data? With this simple ratio you can figure out the amount of money you make per subscriber while engaging in email marketing. This is a ratio you will use often as the size of your email list changes. Hopefully each time you use this formula your total revenue per subscriber will increase. If you adhere to our Mequoda best practices, your chances of increasing revenue will be very possible, as we have seen the revenue per subscriber for clients double, and even triple, within 12 months.

The ratio

To calculate revenue per subscriber take your total email revenue and divide it by the average number of email subscribers. For the more visual readers out there, the equation may look like this:

Total email revenue / Average # of email subscribers

As an example, let’s say your total email revenue is $100,000 and you have an average of 10,000 email subscribers. Our equation would look like this:

$100,000 / 10,000 = $10 per subscriber.

This example would make each subscriber worth $10.

Considerations

You now can actually see the value of a subscriber. Of course there are additional values to subscribers, such as the possibility of receiving word-of-mouth promotion from them as just one example, but the monetary value is worth noting. It is a simple way of expressing your growth, or lack there of, throughout different time periods of your company’s life.

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Ways to potentially increase your numbers

Look closely at your email strategy for email marketing. If you do not have a calendar for it in place, then take the measures to design one. Decide when and how often to promote for certain products and outline this on your calendar.

Play with your product mix. This step may entice you to offer new products if you so choose. Regardless, pay attention to the days you promote for a certain product. Try increasing or decreasing the frequency depending on how popular a product is. If you have a time sensitive product like a live webinar, you will most likely want to begin promotion 4-5 weeks in advance. Allow for more time if this is an in-person event where your audience would need to travel to the destination.

Often times the higher the price of your products, the higher your revenue per subscriber will be.

Finally, treat email marketing as a quarterly-based initiative. Go through your data each quarter, decipher your revenue per subscriber and evaluate your email schedule to stay current with trends and statistics.

What’s normal?

For B2B with special interest topics, it is normal to have revenue per subscriber that is one half the average product price. So if your average product price is $30, then the revenue per subscriber would most likely be $15 per year.

For B2C, 10% of your subscriber base will typically make a purchase. 20% of your subscribers will make two and a half purchases.

Hopefully this information will be of benefit to you. Use it while you build your email circulation and develop your publishing schedule. You will stay current with subscriber habits and the revenue you’re generating by doing so.