I was speaking to a client the other week when an interesting topic came up regarding people signing up to your email list for free. Email subscribers aren’t free.
If, for the moment, we ignore the cost of a newsletter email service like AWeber, Constant Contact, MailChimp etc, then how much can a subscriber possibly cost you? Well it’s all about time and effort.
So say you have 20 email subscribers, and it takes you an hour and a half to write, format and send an email. That amount of your time could be worth, for example, $100.
So each email subscriber has just cost you $5 for them to receive your email.
Now if you have 1,000 subscribers then your cost is still the same but then the email is costing you $0.10 per subscriber.
Your email system might be costing you $50 per month. So another scenario:
Email system cost per month: $50
Emails sent per month: 6
Time/cost per email: 1 hour/$60 = $360
Email subscribers: 3,000
Your total cost per month is $410 or $68.33 per email.
Each email subscriber is costing you $0.14 per month or $0.02 per email you’ve sent out.
How are you earning money back on these subscribers?
A bigger list costs more money but also divides that cost between more subscribers. You may have also spent 20 hours creating a free report to entice people to sign up to your email list. But once you have the subscribers, how are you getting value from them?
How many people are opening these emails?
If your email system charges you per number of subscribers and yet only 5% are opening your emails then your costs get much worse. Add that to the fact that in most email systems you need to delete unsubscribes as these contribute to your total, you are paying for a lot of unresponsive “subscribers”.
You don’t have to sell via email to make money
I don’t sell many things via email. I offer some of my own services and promote other valuable related tools (like AWeber and HostGator) but providing value and creating a trusted brand via email, and also getting targeted visitors to your site can also pay back what you’re spending on email services. It’s just harder to quantify!
How do you use your email service? Do you worry about quantifying value? And if so, how do you do it?
12 thoughts on “How Much Does An Email Subscriber Cost You?”
Perhaps the finest approach is to offer worth information and receive funds with marketing. That’s initial to obtain off happily. It’s fine to assume regarding the expenses of stuff though.Thanks for sharing.
@Joanna Wilson You’re right, but it’s still a cost to business owners that if they’re not even sending any emails then they’re not making much use of the cost. I appreciate the comment 🙂
I have been thinking about the email list thing a lot lately. Probably the best strategy is to provide value (information) and earn money with advertising. That’s starting to take off thankfully. It’s good to think about the costs of things though. Easy to think of email as being free when it’s not.
Thanks Amy, I’m glad it’s working out for you. Advertising is not something I do on this site, except for my own products and services and affiliate links. So that helps pay for it of course 🙂 but it’s a long term investment.
Dear Joel –
I am used to the brick and mortar business where it is important to know what every square foot costs you in sales – or every chair and desk in the office.
This is a AHA type moment..
Thanks for analyzing the whole thng.
@miraclady In my “past life” I worked for brick and mortar business where I liked to quantify things where I could,. It’s good to try to do that for your online work too 🙂
I’ve never really looked at the cost of creating my own email list…like you outline. However, I do believe my list makes me more income that what I spend/invest.
I look at list building as relationship building and yes, of course, I do try and sell products and services to them. But only services and products that I have personally used, benefitted from and can honestly say are worth buying…because I think they will make their lives easier.
@andrewrondeau I don’t tend to look at my own list like what i mentioned, though sometimes I think an overall view once a year to see if you can quantify it would be worthwhile. I hear all the time about people making money from recommending $$$ services they’ve never used, but like you, I don’t do that as I find it hard to recommend something based on what other people have said about it rather than my own experience.
Joel, I’m sure you’d agree the answer depends on whether getting names onto your email list is a cost or an investment. If an investment … a friend who uses the same method as I, only better 🙂 recently ran a campaign that was largely powered by email. Results were … well, not bad. List Size: 590 – 672 (pretty mall). Unique Visits: 411. Number of sales: 202. Conversion: 49.15%. Price Point: $39.95 per month – making for an $8K per month income stream. His ‘secret’ – he stresses demonstrating value upfront. If someone likes his stuff – they THEN get to jump through hoops to get more. He doesn’t want people in his sphere of influence who are in it only for the freebie carrot. Also, his email marketing is unique, ‘forcing’ email subscribers to jump thru multiple loops, then closing them some time later. it’s about creating tension (pressure), building anticipation, and maintaining their attention. As we know, NOTHING grabs people’s attention faster than the need to know “WHAT HAPPENS NEXT?” Emotional tension drives you to think it might go this way, or it might go that way, and that makes you wonder – WHAT WILL HAPPEN NEXT? There more to it, but I may have over-commented your question as it is. I remain a fan of email marketing. In the spirit of your post … watching what email subscribers cost me, very closely.
@beatcoach Absolutely Beat. A lot of people’s huge lists are only after free info, this is part of the problem of giving a free report away to build an email list. Are you attracting the right type of people? Your friend’s list sounds like an excellent system however how consistently repeatable that method is with a small group of people would be of interest to me.No such thing as “over-commenting” 🙂 so thanks!
Joel, ‘my’ method is about making profits from small lists. Of course, there’s an element of “repeat”, but it’s not central at all. Anyhoo, probably doing it a disservice by giving you an abstract. If seriously interested, more about it at http://autorespondermadness.com/happy-customers/ … but please, should you consider buying, do so via the affiliate link at http://leapofaction.com [right hand column, scroll down to Autoresponder Madness] :-]
@beatcoach Thanks Beat, I’ll take a look. If I do buy I’ll be sure to go through your link 🙂