As an email marketer, you know your email marketing program is only as good as your email list. It doesn’t matter how much you spend on technology like your ESP, real-time automation or pre-send optimization if your list is choked with undeliverable and worthless emails.  You’re throwing away money with every campaign you send.

In email’s pioneer days, you could realize a decent-enough return on a campaign even from an old or dirty mailing list. But those easy returns are as outdated as your first mobile phone.

 

Why the email revenue stakes are higher today

Today’s marketers are finding return on email more difficult than ever with higher stakes.  Fresh email addresses are harder and more expensive to acquire. At the same time, it’s easier than ever for consumers to mask their genuine emails, whether they use disposable addresses or obscure them with their email clients.

In addition, ISPs penalize senders who violate their protocols. And, with management watching marketing costs closer than ever, protecting your email investment can pay dividends far down the line, even beyond your day-to-day email marketing programs.

Doing nothing to keep your list clean might save money now, but you’ll lose money in the short term through lower campaign revenue. In the long term, it could cripple your ability to reach your customers’ inboxes or to guarantee the integrity of your first-party customer data as you use it beyond email to connect with customers across all of your marketing channels.

 

Calculate the cost of doing nothing

The opportunity cost is the revenue you lose by choosing one course of action over another. It’s an invisible, speculative metric, but it’s also your benchmark to understand what you could gain by acting or what you could lose by doing nothing.

In the past, opportunity cost might not have had its own line item in your annual revenue projection. Let’s fix that right now so you can see (and explain to your boss, CFO and other company leaders) how these hidden costs can hurt your visible bottom line results.

We can measure this several ways but we’ll focus on the cost of lost customers.

To begin, calculate your average subscriber value.  You’ll need to estimate your annual revenue from email.  Below is a simple formula for the ecommerce of a retail brand.

    1. Total number of emails in the database: 25,000
    2. Conversion rate: 1% = 25
    3. Average sale: $50
    4. Total annual revenue from email (2 campaigns a month): $30,000
    5. Annual revenue per subscriber: $12
    6. Total annual expense per subscriber: $3
    7. Net subscriber value: $9

The number of subscribers doesn’t differentiate between active, valid, inactive, invalid or deliverable but problematic addresses. So, here’s how to reveal the opportunity cost of sending to invalid or problematic addresses.

    1. Total number of new email addresses acquired annually: 3,000
    2. Number lost to invalid/problematic addresses: 300*
    3. Revenue per subscriber: $9
    4. Total revenue lost to invalid/problematic addresses annually: $2,700

The increase in sales would be 2,700/30,000 = 9%!  This would more then offset the cost of an ongoing validation process.

* This is a conservative estimate. It could be even higher – 20%, 30% or more – depending on how carefully you screen for invalid or problematic addresses at opt-in. Real-time validation that checks against a third-party database for frequent spam complainers, potential bot attacks and other factors will keep this number down.

For more detail on ‘What is the ROI of email validation?’ check out this blog written by TowerData’s President, Brian Cardona.

One list problem we didn’t factor in: the number of inactive addresses that are still accepting messages but whose owners no longer check them. Sending to these addresses wastes your email budget. It also makes you vulnerable to blocklisting if ISPs convert some long-time inactive addresses to “honeypots.”

ISPs also can downgrade your sender reputation – and thus keep your emails out of inboxes – if the recipients don’t open or click on them. That will narrow the revenue potential of your email program even more.

 

What do your numbers reveal?

Take a minute to plug in your own numbers to see how much money your email program is leaving on the table every time you send. Need our help? We’ll be happy to show you how much more you can gain with email validation that goes beyond simple address pinging.

 

Want to check your email list for free?

We have a free tool that can help called Free List Check.  It provides a fast, easy, and free way to scan your email list for problems.  It’s a great way to see the general percentages of how healthy your list may or may not be and it’s fast and easy.  It scans your list for problems that have a negative impact on deliverability, inbox placement, open rates and conversions.

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