Email Thursday – Calculating the Value of a Contact



So maybe you have 100,000 users subscribed to your mailing list. Or maybe you have 1000 users. Either way, the same question applies: what is an email address worth? How can you calculate if mailing to an individual address is a complete waste of money, a short-term gain, a long-term gain or a lifetime cultivation? Is there any way to know if you’re adding value to the user or if you’re running the risk of increasing the number of complaints?

The first step is to take a look at the history of the email address. When was that address added to the database? Take a look at the interaction of the address over the history of that address. Has the user been engaged with the brand? Are they opening emails? Clicking on anything? If not, when was the last time you saw any positive activity from this address? This is some of the information you’ll need to assess the value of any given address when trying to scrub and maintain a clean and revenue-driving list.

Unfortunately, there is no magic answer for this question as it varies greatly from industry to industry. If you are in the business of operating cruise ships, having a user not engage over a 6 month period wouldn’t seem unusual to me… I don’t know too many people who vacation that frequently. However, if you sell petfood online and don’t see a user engage after a 6 month period, perhaps that user is no longer of any value to your organization. Essentially, your specific business will be the biggest qualifier as to how you can calculate when a user is inactive and therefore how long they should remain on the list before you delete them. Yes, delete them. To sum up:

  • When did the email address get added to the mailing list?
  • When was the last time there was any activity associated with the address?
  • What is the average frequency with which you see any given address interacting with your emails?

    and finally,

  • What industry are you in?

The final tidbit to help you determine the value of any given email address is the revenue/email sent value. This is a simple, yet powerful metric: how much money does each email to that address yield? Combine this metric with all of the information above and you can get a clear indication of what each email address is worth and if it is costing you money to keep the on the list and mail to them frequently or whether it is better to remove them from the list and trim the fat. Breaking up is hard to do, but not if you’re not seeing a return on your time, effort and investment.