Email Lists – Profit is NOT by the Numbers

Posted by in General Finance | 55 comments

Email List Cash CowDo you think your email list is a cash cow?

Do you believe if you get enough people on your list the money will just roll in?

Are you convinced a certain template will magically convert droves of subscribers?

The harsh reality is that you can’t paint by the numbers and hope to get a Picasso. You might get a nice picture of dogs playing cards, but is that really what you want? If profiting from email was really that simple wouldn’t we all be rich?

This post is part of the June Word Carnival. The topic is The Care and Feeding of Your Email List. Click the link to get a variety of perspectives from an amazing group of small business experts.

How to Profit from Painting Outside the (Email List) Lines


 

Size Does (Not?) Matter

Focus on List Size Can Kill ProfitsWhen I began to promote my business online I was bombarded with the message to grow my list or else….

You know what I’m talking about. That feeling you’re being surrounded by vendors, each shouting a little louder than the next to buy their list building services right now. If everyone is saying the money’s in the list, and the list must be huge, then shouldn’t you be building a gargantuan list?

No.

It’s not the size of the list but the quality of the list. Would you rather own a tiny painting by Monet, or a large paint by numbers painting of Elvis on velvet? (If you picked Elvis, well what can I say? Elvis? On velvet? I think you may need a style intervention.)

Ahem. Back to email list size. There are two other numbers that are much more important than the size of your list; Open Rate and Conversion Rate. Open Rate is simply the percentage of emails you sent out that were actually opened by the people on your list. While there’s no one perfect source for the average email open rate, most commentators fall in a range of 20 to 25%. Clearly a list of 500 with a 70% open rate reaches far more than a list of 10,000 with an open rate of 1%.

Someone read your email, great. What you really want is for them to buy something right?

To put money in the bank you need to focus on your conversion rate.

 
Conversion rate is the percentage of people who actually purchase something promoted in your email. You can have a list with 1 million people on it, but if your conversion rate is 0% you won’t make any money.

If you believe everything you read on the internet, conversion rates can span from 1% to over 20%. If you’re a cynical so-and-so like me, you believe that the legitimate number is around 3 to 4%. Of course the higher quality list you have, the higher you can expect this number to go.

The Numbers Whisperer™ caveat – if you have zero people on your mailing list it will be very hard to profit from it, so yes size does matter to some extent.

Goldilocks of Email – Strident, Silence and Sublime

Should you send an email every day? Once a week? Once a month? On a full moon? What about every blue moon? Every so-called expert will tell you something different. Here’s my take…

Mailing List - Silence, Strident or SublimeTiming is everything with email. Send too often (strident), and you’ll get ignored or even start losing people. Personally unless the sign-up clearly states “daily”, I’m going to unsubscribe if you bombard me every day.

On the other hand silence is not golden with an email list. Wait too long between emails they may forget who you are, forget why they care, and even worse, forget they signed up and mark you as spam. While I blush to admit I have gone longer than I should, I recommend sending emails at least monthly.

If you’re not sure how often is often enough for your list, why not ask them? If you’re building a new list, I suggest you state the number of emails they can expect right on the form. Your subscribers are as unique as you and your business, sublime for you may not be what works for others. Remember a list is useless if you’re constantly adding new names to replace lost subscribers.

The 80 / 20 Rule

I know, I know. I said profit is not by the numbers and here I’m giving you a number, two in fact.

What can I say? I’m a rebel at heart.

80% of the content in your emails needs to be informative, fun, entertaining or useful in some way that does not directly make you money. No more than 20% should appear to be selling. Otherwise you’re simply the annoying people in the mall kiosks who harass everyone as they walk by.

Bonus Tip (Courtesy of Aladdin)

Be yourself.

My 3 year old daughter is going through an Aladdin phase. She loves the Disney animated version, and I’m thankful it includes some great humor by Robin Williams as the voice of the genie.

You’ll see plenty of email templates available online. The authors claim you can just insert a few key words or terms and they work like magic. I beg to differ. Your subscribers want to hear from you. Like it or not, those templates sound like someone else (and they’re usually BORING).

Take the ideas shared in the templates and make them your own, in your own voice. That is what your subscribers signed up for. Not an echo chamber of the internet’s latest spiel.

Final Thoughts

What are some numbers you’ve found work or don’t work with your list? How do you care for your subscribers? What are some things that have worked in driving sales? What has failed?

 
© 2012 Small Business Finance Forum LLC | All rights reserved.

 

55 Comments

  1. Email list building can be viewed as similar to cash. When a list is healthy and occupied, there’s naturally an upswing in opt-ins, conversion rates, and ultimately sales. Businesses should realize the importance of their lists, and treat them accordingly.
    Corinne recently posted..VPSMy Profile (dofollow)

    • Corinne great point. Email lists are another asset, and we need to use that resource wisely.

  2. I don’t focus on the size of the list but rather on the percentage that opens it each time I send something out to the list. That number helps keep it real for me; that these are people reading and giving me their time. Keeping that in mind helps me write from a place where I can provide more value!
    Sandi Amorim recently posted..Regrets of the Dying (and other possibilities for life)My Profile (dofollow)

    • Yes I agree. In fact this carnival has inspired me to “clean house” with my email list.

  3. Open rates, click-thrus and conversions are definitely numbers we need to be watching. I also count real responses — you know, when someone hits reply and talks back? I’ve got a folder just for those in my Inbox and I know that if I don’t get at least one or two, my email “failed” to start a conversation — which is really what I want them to do.

    Great stuff, Nicole!
    Tea Silvestre recently posted..The Great Email Experiment (or, Why Your Inbox is the Best Social Media Channel to Grow Your Biz)My Profile (dofollow)

    • Good point Tea. I will add that into my metrics spreadsheet.

    • I like that idea, Tea!
      evan austin recently posted..When to Send: Feeding Your Email ListMy Profile (dofollow)

    • Yes! Open rates and CTR are absolutely essential to assess the health of your list. For example, even though people responded with enough “yeses” for me to start sending out a daily email with my podcast link…it soon became evident that people don’t always really want what they say they do ;) My open rate dropped significantly, like a lead balloon, and it was clear the daily emails were too much…so I stopped.
      Jenny recently posted..How to Say Hello (and Goodbye) to Your ListMy Profile (dofollow)

  4. That magical thinking you referred to is everywhere! When it comes to building websites or Facebook pages or email templates – there is someone who wants to sell you the quick easy super magic secret trick to getting it 100% right with no effort at all. Drives me nuts. But I guess people want to believe it because the magical thinking vendors are still in business!

    You do have to pay attention to your stats because you can learn about what your readers want. Ultimately we want those clicks. And to get them you’ve got to work for it. I’m with ‘ya on the numbers game!
    Carol Lynn recently posted..Email Marketing In The Dead Zone: Are You Training Your List To Ignore You?My Profile (dofollow)

    • Yes the magic thing drives me nuts too. Sigh.

      Yes stats in the right context are helpful. I’m just sick of people pushing total subscribers and ignoring the rest.

      *BRAINS* Loved your post.

  5. I always think of quality rather than quantity. Although we do need that list…. the quality of opt-ins are what is important to me. One cannot expect a large return on those numbers. They are just numbers and we have to play around with the titles and so forth.

    What I got a kick out of is the 80/20 rule, which is steadfast and true. I just wrote my latest blog about that. I was pondering where the heck that number came from and when I dug it up, I wrote about it.

    Blessings,
    Donna
    Donna Merrill recently posted..The 80/20 RuleMy Profile (dofollow)

    • Donna that is too funny. Being a numbers geek (and yes I have a degree in Math) I’m intimately familiar with the 80/20 rule. It’s amazing how that appears over and over again in so many settings isn’t it?

      • Being a non-geek it was a challenge for me. But when researching, I found the “Pareto Principle” fascinating. I read about his studies with peas and what they produce. Then in later years, he applied it to sociology, that is what captured my interest.

        I’m going around with this mindset in the past few days and have been seeing things through this principle. I feel like I just put a new pair of glasses on.

        Donna
        Donna Merrill recently posted..The 80/20 RuleMy Profile (dofollow)

  6. Considering myself kindly kicked in the posterior – I have been WAY guilty of ignoring my list lately!
    Annie Sisk (Stage Presence) recently posted..Getting Your Email Marketing Done In Your PajamasMy Profile (dofollow)

    • Well Annie I’m guilty too. So it was a mutual butt kicking, in the nicest possible way of course :)

  7. Excellent stuff, Nicole…some of it very validating for me, and plenty of new considerations.
    evan austin recently posted..When to Send: Feeding Your Email ListMy Profile (dofollow)

    • Glad to hear it Evan!

  8. Love the different email marketing approaches (silence, strident and sublime), Nicole. I must admit that monthly communication has proved a stretch for me of late, though I like to think I communicate with list members in other places.
    Sharon Hurley Hall recently posted..Why My Email List Is like a CactusMy Profile (dofollow)

  9. Thnx for the Prompt! :>

    Thought of some Highly Useful Content to put in the Bold Kitten Brigade Auxilary – so now it’s off to integrate MailChimp with our membership software! :>

    Allez! :-D :>
    Birdy Diamond, Purr-oud Leader of the Bold Kitten Brigade! :> recently posted..Purr-Meditation #24: Nibbling with OherielMy Profile (dofollow)

  10. Great Tips Nicole, and visuals and analogies!!

    I send monthly emails with a discount, so what is in it for my readers. I have played around days and times in sending to get the most clicks and buys. 4% is a success for my sleepwear line, http://www.haralee.com.

    I tried a treasure hunt with clues in 2 part emails for extra saving and my customers HATED it!
    I tried a contest and my customers Hated it!

    I know they Hated it because they emailed me and told me, but they did not ask to be taken off my email list. I take away from that they they Hated the email but not the company which is good, I didn’t annoy them completely.

  11. I love your tip about not focusing on size, I think it is most important to not focus on size but on quality. I had that issue once (feeling insecure about my lil list) and just stopped all together and just recently re-focused my effort…I still need to put some work into it, but I have begun anew! I am going to utilize mine at first to share more from a curation standpoint and then add tools…I finally have a lil bit of strategy AFTER I grow the list more! THANKS NICOLE…GREAT POST
    Michelle Church recently posted..How Can Email Marketing Help You and Your Business?My Profile (dofollow)

  12. Very insightful information on the numbers that DO actually matter. I don’t actively work a list at this point, I know a few things that were disjointed and not very helpful on their own. Thanks for pulling together the parts that matter and how to apply them. MOST importantly, thank you for reminding people to make their offer and content personal — not plug and play. As a marketing writer not only can I spot it a mile away, at this point, I’m pretty sure everyone else can too!

  13. Lots of great points here Nicole. I totally agree with the magical thinking. Looking for the magic trick or bullet means we ignore the real business and opportunity that is waiting for us. LOVE the illustrations!

  14. I used to post my blog daily. I have no idea how I managed to ramp up to that level of content, but it sure wasn’t sustainable. I can’t imagine emailing someone daily about something.

    Take a look at the campaigns – right now, both sides are “inventing catastrophes” so that the donations continue to pour in. Once one emergency is satiated, or at least – funded “enough” they move on to the next one.

    It was enough to get me to unsubscribe from most of the political stuff, I just couldn’t take the constant beg.

    Then again, I tend to be on the more conservative side of the 80/20 rule. I instruct my students 90-9-1 rule. 90% conversations, 9% original writing/articles/posting news, 1% promotion :-D
    Nick Armstrong recently posted..#$%!: a Guide to Profanity in your MessagingMy Profile (dofollow)

  15. Hi Nicole,

    First, great points here!

    Having a mailing list is really essential, especially since social media makes it that much easier to connect with our target market.

    It’s interesting, I get asked all the time about how often to send out emails – my rule of thumb, is to send them information that helps them and will make them feel like they got a valuable tidbit of information from you.

    If it’s not valuable, then you are wasting your time and theirs!

    Thanks for sharing!

    ~Christine
    Christine Brady recently posted..Narrow your Focus for Maximum AppealMy Profile (dofollow)

  16. I don’t focus on the size of the list but rather on the percentage that opens it each time I send something out to the list. But thank you for the Post! Means alot!
    Jake Dewman recently posted..Boise Churches, Considering All Aspects of Your Boise Home PurchaseMy Profile (dofollow)

  17. Hi Nicole,

    I think the biggest Blogging mistake which I did is I didn’t created an email list yet.
    I have read hundreds of article talking about the benefits of having an email list. I will start building my email list soon.

    These tips are very useful specially for me.
    Thanks for sharing it.
    Ehsan recently posted..3 Simple Blogging Lessons We Can Learn From “The Writer”My Profile (dofollow)

  18. The ideas you’ve shared here are fantastic and no doubt so great and it may really improve the variety of individuals visiting your website.
    Becca recently posted..Grout Cleaning Wyndham ValeMy Profile (dofollow)

  19. Love your commentary Nicole & it’s spot on. I have a friend who did a high four figure (or maybe low five figure) launch on a list of three hundred people – which a lot of the gurus would have you believe is straight-up impossible. A lot more important than the amount of people you have on your list is how interested and engaged they are.
    Michelle recently posted..Three ways to make writing your next newsletter easier + fasterMy Profile (dofollow)

  20. This is wonderful! I don’t have an email blast that I send out yet b/c my subscribers get my posts as they publish and I don’t want to bombard anyone!
    What you say about DO NOT keep selling and templates are boring — YES, YES!!
    I would add this also – if you meet someone at a conference and you exchange cards – DO NOT add them to your mailing list. Getting a biz card is not opting in! R
    Rachel Blaufeld recently posted..The Crunch of Friendships as a MomMy Profile (dofollow)

  21. i feel sorry for the folks who take every piece of advice from the so-called gurus. early on, i fell victim to following THEIR formulas which in turn, did nothing for MY goals/objectives. and i totally agree – if a “set it and forget it” recipe existed for building and profiting from the perfect email list, we’d all be doing it!

  22. The key – Personally – To remember is to use targeted engagement. There is not any practical use in sending an email (as part of your email marketing campaign) to a thousand untargeted users. They will most likely see your mail as spam and subsequently delete it before even opening. (Example: Owning a website about dogs and sending emails to people in the Cosmetics trade)

    And yes – The 80 – 20 rule is a great guideline to use when compiling the Email templates and content. Offer something unique and captivating then you should get a good ROI from your efforts.
    Anton Koekemoer recently posted..6 Content marketing tipsMy Profile (dofollow)

  23. I fully agree with you. Having a large mailing list is useless if there is no conversion involved.
    Cheryl recently posted..painting with acrylics tutorialMy Profile (dofollow)

  24. This is actually a great reminder for I tend to ignore my mail list. I gladly can follow the 80/20 rule. For me, its much better to put things that way rather than taking the risk of big loss.
    Phoemela recently posted..hot dating tips to win her heartMy Profile (dofollow)

  25. I have been doing a lot of thinking about my email marketing strategy, and I’ve been working to making changes in how I do things. For starters, I’m planning to send a personal email to every one in my list thanking them for joining, letting them know about my plans and asking them how I can help them. I haven’t started this yet, but it’s on my list of things to get done this month. I was inspired to do this by a podcast at BlogcastFM. I have a relatively small list, so this is doable. Even if you have a larger list, this is doable… It just may take more time for you to go through your list.

    As another part of connecting with my readers, I have already started sending a personal email to new subscribers thanking them for joining my list. This isn’t a “canned” email. I always write it off the cuff. I’m trying to build a relationship with my subscribers from the start.

    The last step in my new strategy will be to get with the people who are unsubscribing to find out why. I realize that sometimes, it’s just not a good fit, but I want to find out how I can improve what I’m doing, and who better to ask than the ones who are dissatisfied? They’re the ones who can help me find if I have on opportunity for improvement :D

    I agree with you that we should focus on content that will help even if they never buy. I have a few lists I’m subscribed to that I might unsubscribe from because all I ever get from them is promotional emails of some kind.

    Anyway, I took way longer than I intended. Thanks for the great post!
    Grady Pruitt recently posted..Living the Law of ObedienceMy Profile (dofollow)

  26. Hi Nicole,
    I am learning a lot about all this marketing stuff and I found your post to be very relevant. I keep hearing about making profit from blogs and a lot of people talk about traffic and numbers but they don’t discuss conversion that much. Thanks for sharing these great tips with us.
    Mariella Lombardi recently posted..US Marine Replaces TRX Destroyed By a Roadside Bomb – The Benefits of Using the TRX Suspension Training!My Profile (dofollow)

    • Conversion = cash. As a tree hugging capitalist (that’s another post yet to be written), I’m all about making money ethically. If people are just looky loos (sp?) you aren’t going to be beefing up your bottom line.

  27. If you treat your email list like the way you choose friends, you are surely to succeed. After all, we can get a lot of benefits from having a few real friends compared to having a lot of fake ones. Apply that to business and everything will be fine.
    Kiran recently posted..guitar lesson software review 2012My Profile (dofollow)

    • I like that mantra “Treat your email list the way you choose friends.” (and how you treat them I would add).

  28. Love this! I was talking with a client this morning about the difference between quantity (which we used to shoot for) and quality – which is of HUGE importance to us.
    The biggest things that have worked for us in terms of opens, clicks, and sales is just being ourselves. Realising that (as you said) people want to read about what we are genuinely thinking about, they want a good mix of great content, connections to other people and ideas, and they also DO want to hear what we are offering them to buy… but most of all it’s not trying to copy anyone else’s style.

    That, and being OK when people unsubscribe!

    Jo
    Jo Foster recently posted..Do you shrink at the thought of writing yet another sales page that doesn’t sell?My Profile (dofollow)

    • Hi Jo, great to hear from you down under.

      I would give two huge thumbs up (more if I had them) to just being yourself. The more I’ve embraced being the quirky numbers person with an infectious laugh, the better I’ve done.

      I try to think of Unsubscribes the way I used to think of No’s when I was doing cold calls – celebrate them. Every No meant you were that much closer to yes. Unless your entire list suddenly unsubscribes, then you might want to take a second look at what you’re doing.

  29. Extremely Nice Nicole. i will consider this for my email list to get success like you. Business Broker South Florida Ft. Lauderdale

  30. Hello Nicole,

    Frankly speaking, I never focused on my email lists so far. I have been busy with my basic motto, all the while i.e., content generation. Being a writer by profession, I concentrate more on this.Your post has given me a new dimension to think.

    Thanks and Regards,
    Sanjib
    Bigcommerce Review recently posted..15 Beautifully Designed Online Stores powered by BigcommerceMy Profile (dofollow)

    • Hi Sanjib – I agree without content email lists are useless. However even with great SEO, it gets harder every day to get targeted traffic that may become a client. Email lists are another arrow in your quiver.

  31. Ahh. List building. I nurtured my list for years painstakingly writing great articles and sending monthly. Then magically in January of this year something happened in my psyche. I got lazy. I got busy. Excuses I know. I think partly it was my open rate kept going down and I didn’t have the energy anymore. I am still getting tons of opt ins and I know I need to get back to it but I wonder if they will not remember who I am (as you mention here in this post). I am motivated to get started again however. Thanks! Suzanne
    Suzanne recently posted..5 Things you Can Do in 10 Minutes Daily That Will Move your Practice ForwardMy Profile (dofollow)

    • Hi Suzanne – not it’s not easy. And I had a bit of a lull with my newsletter. Essentially I sent out a Mea Culpa with a special, no strings attached freebie offer to say I appreciated them sticking around. Yes I got a few opt-outs, but no spam complaints. The first one after a break is the hardest.

  32. Hello Nicole , Great article with some great points included in the article.Thanks for such a great article

  33. I found this article very informative as i was much worried about the number of email subscribers. We can’t convert big email list into cash directly but in some regards it is helpful too including getting traffic and marketing purposes.
    Yogendra Sharma recently posted..Facebook Overtakes Mixi Social Network in Japan with 15 Million Active UsersMy Profile (dofollow)

    • Thanks for stopping by Yogendra. I agree the email subscribers can help with traffic. However unless you’re selling adspace which is based on traffic, it’s paying customers that grow your bank account.

  34. Great post, it is all about engaging with your followers and subscribers as opposed to having millions of them for no reason! Quality AND quantity…now that’s the holy grail.
    Ben recently posted..How to Get Blog Followers the Natural WayMy Profile (dofollow)

    • Yes it is the holy grail – now if only it came in a Monty Python version!

  35. I will,admit my list building has been one of those areas where I have always put to the back burner as I always seem to have something more important to do I really should get my act together here I know e mail lists aren’t a guaranteed income source but It can’t do you any harm

    So thanks for the kick up the backside
    Lee recently posted..Make a Bucket ListMy Profile (dofollow)

  36. Excellent information. When it comes to email list I actually had absolutely no idea which is best. Having just a handful of readers, some of them love to read long emails while others, rather reading something short instead. Definitely puzzled me.

    Anyway, I like your 80/20 rule. Referring to the above paragraph, I feel that content is important. Even when I am sending out email for updates, I always consider if these emails are providing important information.

    Thanks for sharing this mind opening write up and take care!
    Reginald recently posted..What Did BizSugar Taught Me About List Building?My Profile (dofollow)

  37. I agree quality over quantity is what counts; there is no point having someone on your list who has no interest whatsoever in what you are sending them. In fact, morally, you should always ensure that never occurs. That said, building a list is always hit and miss: as you are never going to be 100% certain you are aiming your posting to the right audience.

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