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Email Marketing by the Numbers: How to Use the World’s Greatest Marketing Tool to Take Any Organization to the Next Level by Ali Sales, Chris Baggott

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Calculate the Value of an Email Address

By David BakerVice President, Email Marketing and Analytical SolutionsAgency.com

Eager to learn how? With the help of one of my guru analysts, I will share an elegant formula to help you establish the financial value of an email subscriber over a given time period. Most marketers have moved beyond basic email analytics and now focus on process-oriented metrics such as conversion rates, ROI, revenue per email, segment, and ISP performance variations. These are important metrics, but they tend to force us into a campaign-level mindset. As marketers, we need to look beyond campaigns and take a longer-term, customer-focused view. Consumers opt-in to receive a flow of communications from you and tend to view your messages in the aggregate. This model seeks to do the same. It presents an easy-to-digest numerical value for those who do not have a granular view of email marketing (think of your vice president of marketing, who needs snapshots of all channels).

This is ultimately an analytical process because it incorporates results from various campaigns. While there are several ROI models, we felt this one would be most generally useful as it contains a direct mail cost variable as a factor.

Here’s the basic model:

Annual value of an email subscriber = [(Averag incremental revenue from each email) × (Number of annual email campaigns)] + [(Cost savings versus direct mail) × (Number of annual DM campaigns displaced)]

To generate a proxy for the ...

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