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RSSA new survey from the Email Experience Council's List Growth & Engagement Roundtable shows that only two out of five marketers know their cost to acquire an email address.
Every marketer today -- especially those managing online programs -- is under pressure to show ROI and contribution to the bottom line. Analysis is much improved when a marketer can show the true value of an email address to the company and the brand. Once value is established, it can help answer questions such as:
- How much can I pay for a new subscriber?
- How much revenue can I expect a new subscriber in a specific demographic or from a particular source to contribute?
- When segments of subscribers are below the optimal ROI, what different types of content or frequency will boost their engagement?
Acquisition marketers typically know the amount they are willing to pay for a search keyword. Email marketers want and need that same level of confidence when they plan their list growth, acquisition programs, content strategy and promotion calendars.
Why isn't more analysis happening? The challenge is twofold: First, marketers struggle with the starting point what data is needed to begin to understand the value of an email record. Second, even when a methodology is in place, many marketers do not have an easy time gathering the specific data required.
Not surprisingly, the most commonly used success metrics around the value of an email file are those that are easy to track today -- deliverability to the inbox (56%), revenue generated (52%), open rate (50%), total quantity of email addresses (48%), and click-through rate (47%).
Perhaps the easiest metric to track is list size. However, only half of the marketers surveyed say the pure size of the file is used as a success metric. Most marketers in our survey are only doing organic Web site capture to build their file. Despite the proven success of other list growth strategies, most survey participants do not take advantage of them.
We hope this survey kicks off a dialogue and best-practices sharing among marketers. One of the 2007 initiatives of the eec's List Growth & Engagement Roundtable is to investigate various methodologies being used to value and grow an email list, and develop standards around them.
Read the executive summary of the survey results at the eec Web site and stay tuned for the full report (free to members). Join the discussion by emailing the Roundtable at listgrowth@emailexperience.org
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Commentary: Here's a story: Pitching media plan that includes print and TV to two different clients. Both say the same thing; "Forget TV " Build the list ! The list size is important to build JV partners and it provides an estimate of a ROI." Ok so we start building the list. "CPA is too high." We then say , "The quality of the list is proportionate to size of the list for a given timeframe : more time to send offers, poll increases the quality of the targeting." Then we're told OK , "So create a campaign to lower the CPA." So an email campaign is run from keywords, search , the usual suspects:
Here is the surprise at the half year interval.
1) missing the goal for total subscriber growth 2) costs escalating
Same two clients in the same category w/ same targets: now one has a CPA of $200 and the other of $100. Both are having difficulty converting since the message has to communicate both the category and the brand.
The one with the lower CPA is now uses messaging with TV as part of the mix and has a lower CPA... as for the other? "TV is too expensive and 'too risky' " and pushes their CPA higher and higher to make gains.
Take Away: What tests are being run to qualify the mix and establish what is successful, and therefore where and how to look for the gain? It could be print , or any kind of electronic medium but there has to be a calibrated test of what is available before the email campaign gets committed, and not the other way around. Is there just one part of the brand message to trigger acquisition? or is an aggregate of we at Ogilvy used to call the 'brand fingerprint.'
All too often, our clients focus solely on the number of email addresses in their list. An email address alone is worth very little. Email address along with other data provides the ability to send *relevant* emails to targeted subsets of the overall list. Generating better ROI.
As marketers, it seems to me that when *we* discuss this issue we should not frame it in the outdated way of stressing the number of email address, but in the best practice way of stressing overall data quantity and quality - which is the only way to provide value to subscribers and in return get value *out* of an email marketing strategy.
I am in complete agreement about the necessity to value a subscriber. My clients continually undervalue the process of learning more about their existing subscribers and *over* value an email address. When they talk about list size, they always (and I mean *always*) are talking about the number of email addresses on their list. We need to help change this thinking and data is our best tool.
-Philip Crawford http://emailmarketing101.blogspot.com/