The Most Valuable Email Subscriber

Discover which traffic source is worth the most

Not all email subscribers are worth the same.

Many of our Mequoda Gold Members know this and can track the value of a subscriber by its source of origin using what we call “Original Source Identification” (OSID).

An OSID is a code assigned to all email subscribers when their information is originally written to file. This happens when their record is first created.

These source IDs allow us to see where subscribers are coming from and ultimately determine which source is the most valuable.

In some cases, subscribers come in through search engines. In other cases, an email subscriber comes from a referring link from another website or through paid media like a pay-per-click (PPC) campaign.

Other times, a subscriber importer is used to take a database (postal or telephone) and append it to a buyer file. These are people who have purchased products in the past.

Co-registration is an additional method used where other publishers are authorized to offer a newsletter subscription on our behalf.

All of the above are ways to increase website traffic and build email subscriber files.

Uniqueness in email marketing files

When I was a publisher at Sacramento Magazine, we had a popular feature where an editor and a photographer would be sent out to the house of a local celebrity – ranging from city council members to television anchors. After being greeted at the door, our editor would ask if he could go inside and take a picture of the homeowner’s refrigerator.

Seeing someone else’s email file configuration is like seeing his or her refrigerator: no two are the same and some of the contents may beg the question, “What’s that?”

The file source mix at a glance

Below you can see an example of a source file for Flora Daily, a hypothetical website and case study.

Mequoda Segmentation Report

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This source file is comprised of four significant traffic sources that focus on new subscribers only. Note that this excludes data associated with email sources, as email source codes would dictate traffic from existing subscribers and we’re focusing only on new subscriber sources.

For co-registration purposes, we offered an email subscription to Flora Daily at other gardening sites. Co-registration is a great way to build the size of your file but the subscribers are typically disproportionately low spenders. For Flora Daily, co-registration generated only 5% of total revenue, even though it accounted for 29% of total subscribers.

Although co-registration accounts for a low percentage of total revenue, it’s worth doing from an ROI standpoint since we spend 60 cents and make $2 per subscriber. We are making money, but doing it the hard way.

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Postal appends, on the other hand, are likely the most valuable source for obtaining email subscribers in special interest publishing. For Flora Daily, 23% of the total email file is from postal appends, generating 37% of the total revenue. This source is bringing in more money per subscriber than any other.

In order to grow the file, publishers should be willing to put a disproportionate amount of money towards postal appends. An investment of 20-30 cents per name for people who will spend $20 is a no-brainer that will result in margins through the roof.

Unfortunately many publishers are ignoring this source, or are being too conservative with it.

I would recommend being more proactive with people who recently bought from you. Get their email address onto your subscriber list because they are going to spend the most money with you. Email them soon after the initial purchase before they lose interest.

A relevant ‘To-Do’ for online publishers

Take a look at all the ways you’re building website traffic and put dollar amounts on what each subscriber is worth by source. The most valuable subscriber may be worth 5-10x more than the lowest performer. Therefore, not all types of subscribers warrant the same amount of time or resources.

If you want to be as profitable as possible, you need to spend disproportionately on the sources that have the largest margins.

These four sources help build website traffic and create customer relationships over time. At the Mequoda Summit West 2011 we will premier 27 Ways to Increase Website Traffic, which will give you a larger checklist of profitable ways to build traffic.

In preparation for the Summit, you can download a free digital copy of our Mequoda Segmentation Report Tool for the next 90 days. After that time it will only be available for our Mequoda Pro members. Be sure to send this post to friends and colleagues so they can better understand a segmentation report.