Email List Growth Doesn't Equal Revenue Growth

The behavior of most email subscribers proves that the promise of email marketing is still more appealing than the actual email marketing received.  Think about it.  Lots of people opt in.  Not many subscribers are active.  The variance in those two numbers is what I call the "optimization opportunity" for your program.

Throw away your list growth metrics -- they mean nothing to the bottom line.  Instead, adopt more meaningful measures of ROI that reflect how well your program engages with subscribers.

All of us as consumers and business professionals sign up for way more email marketing than we can possibly read and appreciate.  In a survey Return Path has conducted four years in a row during the holiday season, subscriber appetites for more information via email have not diminished despite the crowded mess in our inboxes.  It's true:  Everything we sign up for sounds interesting at the time.  Offers and sales alerts?  Okay.  Headlines?  Yes, I want to keep up.  Daily service alerts for your social network?  Sure, I want to stay in touch. I can just deal with it all later. Sign me up.

But when all that information actually arrives, subscribers are quickly overloaded.  It's not always that a particular email program is unappreciated, but that the collective weight of all that is crowding the inbox is overwhelming. That's why most of our subscribers ignore most of our email messages most of the time.

Email marketers typically deal with this problem in one of two ways:

-    We hope.    
-    We send more.   

Neither strategy actually works to boost revenue per subscriber in the long term.  And neither allows marketers to identify or optimize what's working or even accurately forecast channel revenue.   This is an urgent situation.  Subscribers quickly tune out, delete without reading, or worse, report as spam any message that is irrelevant, comes too frequently or even "just isn't that interesting to me."   

An active, engaged file is critical to response rates, of course, but also to good deliverability and a good sender reputation.   A recent benchmark study   showed that the presence of just one spam trap can drop your reputation score by nearly 20 points.  Similarly, IPs that appeared on even one of the top nine public blacklists had a deliverability rate of 35% versus 58% for mailers not listed on any of these blacklists.  

Even though subscribers willingly sign up for way more than they can handle, we marketers are not doing our share to help.  We continue to send messages that are untailored, badly timed and all about us.

What does work is some combination of the following strategies that is right for your business:

-    Establish value from the first moment through a compelling and relevant welcome and engagement series
-    Send more messages when the subscriber is in market, and less when they are not
-    Respond to the subscriber profile, her behavior and her place in your company's customer lifecycle
-    Give control back to subscribers through a preference center
-    Adopt a cadence that allows story telling through relevant content
-    Permission that is ongoing, not static
-    Vary the type of message (e.g.: newsletter, promotion, behavioral trigger)
-    Surprise subscribers with a simple "thank you" every once in a while
-    Clean out the deadwood (all those subscribers who are ignoring your messages and have not opened or clicked in the past six months)

You might read that list and think, "Oh, yes, I keep meaning to get around to some of that."  Relevancy is a word that may be overused in our industry, but it's absolutely the only way to engage with subscribers.  Don't let continued success with new subscriptions fool you.  Getting the opt-in is not the end, it's just the beginning.

First, change your attitude.  Abandon batch and blast (it doesn't work for creating long term value or optimal channel revenue).  Focus on creating a subscriber-centric program.  Second, measure your program appropriately. We'll talk about that in my column next month



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