The Surprising Cost Of Unsubscribes

A few years ago, I decided to take a close look at my personal finances. I found a lot of ways to reduce costs but the thing that really surprised me was the amount of money I was spending on my morning latte habit. Every day I spent  just a little bit on the way to work. Over time, that expense really added up.

It is the same with unsubscribes and spam complaints. In any given campaign, you will remove only a  very small number of subscribers from your list because they have either unsubscribed or complained about your message through the “report spam” button in their inbox.

For an individual campaign this doesn’t seem like a lot.  Yet over time, losing subscribers really starts to add up.

This problem is frequently masked by the way that many email service providers report unsubscribes and complaints.

Let’s take a look at an example of a marketer sending twice per week to a list of 1 million subscribers. According to Experian’s Quarterly Email Benchmark Report, a “good” per campaign unsubscribe rate is about 0.12% (1.2 per thousand). Spam complaints are typically under 0.1%. For the purposes of this example, let’s assume 0.08% (0.8 per thousand).   



In one campaign, this doesn’t look so bad. With the assumptions above, you only lose 200 subscribers. The lost clicks and revenue from this group doesn’t look like a lot. The cost to replace 200 subscribers is pretty low.

Over one year, though, you lose over 20% of your list. Losing a few subscribers with each campaign starts to add up over time. With the assumptions above, more than 200  thousand subscribers will leave your list over the course of a year. The lost revenue, opens, and clicks from this the group are substantial. You have dramatically decreased the size and value of your key asset as an email marketer: your list. (Please note that the calculations above assume that your list continues to grow over the course of the year. Subscribers added are assumed to be equal to subscribers lost each week.)

If you are interested, you can try this unsubscribe calculator to use the actual number from your own program.

You can take a few approaches to mitigate this cost:

Understand the hidden cost. Take a look at the number of subscribers you are losing as well as the quality of the subscribers you are losing. For many of our clients, the quality of unsubscribed addresses is higher than the average for their list.

Experiment with changing frequency. By mailing less, you will drive fewer complaints and unsubscribes. However, you will likely drive fewer opens, clicks, and conversions. Your objective is to find an optimal point, not to move unsubscribes and complaints to zero. As I mentioned in a previous post, there isn’t a one size fits all for frequency. Different segments of subscribers will have an ideal frequency.

Send more targeted and contextual messaging. Lifecycle messages (e.g., welcome and anniversary messages), triggered messages based on site and other behavior (e.g., abandoned browse or back in stock notifications), and content that is based on observed behavior (e.g., browsing and purchase behavior) will drive fewer unsubscribes and complaints per message sent.

Play “moneyball” with your acquisition efforts. If you are acquiring subscribers through various methods, review the number of opens, clicks, and conversations that you are getting per dollar spent in each acquisition channel. Load up on those methods that provide opens, clicks, and conversions less expensively. If you do this, the cost of replacing lost subscribers will fall.  

As with my coffee habit, understanding the cost is the first step. Take five minute to analyze the cost of unsubscribes and complaints in your program.

4 comments about "The Surprising Cost Of Unsubscribes".
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  1. L M from agency, September 19, 2016 at 1:08 p.m.

    Question re "The lost revenue... from this the group are substantial. You have dramatically decreased the size and value of your key asset...your list"
    How were you guaranteed $ revenue from those unsubs (if they had not unsubscribed)? If these are people leaving out of non interest, are they just not dead weight in your list if they stay (aka too blase to even hit 1 unsub button)?
    Personally I disagree with chasing volume (big list!) over strong conversion & upsell rates into Tier 1 highest Lifetime value pool. To me its a waste to spend resources on hitting the blase over & over to try t o get them to convert into sales. Time spent segmenting your superstar customers can be more worthwhile, as they are in favor of your brand and can be incentivised for gaining referealls of the like minded..
    Is your "key assets" really a LIST, or the actual customer groups providing you with revenue?  A number?  or quality?

  2. George Bilbrey from replied, September 19, 2016 at 2:04 p.m.


    I agree with your point in general - putting efforts against the most engaged (and highest CLTV) customers will tend to drive the highest returns on effort. However, if you take a look at your clients own data, I think you'll find that there are many valuable customers that are unsubscribing. There is no "guarantee" but many unsubscribing email addresses have a high expected LTV.

  3. John Bollinger from Into The Inbox Consulting, September 19, 2016 at 2:55 p.m.

    I agree that more targeted campaigns can help reduce the unsubscribes and complaints, but you need to know how to target.  I recommend that my clients use a preference center - both when unsubscribing and when signing up.  Allowing a subscriber to choose the topics and frequency up front can go along way in being able to target based on relevancy, and as a subscriber's needs and wants change, and otherwise would unsubscribe, a preference center can change a person's mind.  They wanted what you are sending at one point, if they click spam or unsubscribe something has changed for them.  Finding out what that is can keep a subscriber wanting your emails.  If they still unsubcribe after being given other options, than it is far better for that to happen in the long run.  Segmenting your lists based on engagemnet factors can help you determine frequency and desire and you can target with re-engagment campaigns based on those factors using surveys or directing your subscribers to that prefernce center as well.

  4. George Bilbrey from replied, September 19, 2016 at 5:43 p.m.


    What percentage of subscribers will use preference center after initial signup?

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