The size of your email list doesn’t matter

Aug, 1 2013

My colleague Anselme gave an awesome product talk recently.

Here is my biggest takeaway from his talk that is of utmost importance for all marketers: it’s not the size of your email list that matters, but the engagement of your subscribers measured over a longer period of time.

Forget about the size of your email list

Let’s look at an example from a specific company (this is a true story by the way).
This company is seeing its email subscriber base grow steadily. Everything sounds peachy, right?

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However, if you peel back the onion you will see that in reality the number of engaged email subscribers is – surprise, surprise – declining!

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Engagement equals money

We wouldn’t be a predictive marketing company if we didn’t have the data to back up our claims. We found that email engagement over time truly equals revenue. In the graph below you see three different groups of email subscribers:

1. Those who were active readers of your emails and remained subscribed to your list (the green bars, first bar)

2. Those who were equally active readers of your emails but got annoyed and unsubscribed from your list (the blue bars, second bar)

3. Those who were not active and remained inactive over time (the pink bars, third bar)

As it turns out, these three groups of email subscribers have very different spending habits and different levels of engagement. In the graph below we chart the cumulative margin over a period of 90 days. The deciles refer to groups of customers ranked from “largest margin” to “lowest margin”. That said; the first group of deciles is your top 10% customers by margin and so forth. Got it? Okay, good. Here it goes: Within the top decile, and all other deciles for that matter, you see that the customers who remain engaged and subscribed to your email list produce significantly higher margins than those who unsubscribe from your email list. See for yourself.

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How to maximize email revenue

Sending a high volume of emails is cheap and intuitively, it might it seems that this would lead to higher revenue, but think again - this is not always the case.

Look at the below curve. It’s true; the cost of sending emails is cheap. However, there’s a high cost when people begin to unsubscribe. Don’t despair. An optimal frequency exists, and that’s where revenue generated from emails is high and the cost of opt-outs is low.

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Email marketers on the road to success

Essentially, you want to stop sending emails just before people start to unsubscribe. The tricky part is - how do you now when people are about to unsubscribe?

Ah-ha! This is where predictive analytics kicks in.

Self-learning, predictive algorithms can predict for each and every individual customer whether or not they are likely to unsubscribe if you send them another email.

AgilOne Email Edition packages these algorithms up in a very easy to use cloud-based application which works in conjunction with your email service provider. You can sign up for a free trial here [https://app.agilone.com/register]. Enroll your service provider’s credentials and see in a day or two how many of your email subscribers are truly lovers of your brand “enthusiasts” or “phantoms” who do not engage at all. This simple knowledge can help you optimize email frequency, per person and preserve millions in email revenue for the future.

Still not convinced? Take a look at the slides below from the Predictive Marketing Webinar.