The Real Value of an Email Address

Background

An ongoing discussion in the email marketing world is the following question.

"How much is an email address worth?"

(click here to see how prevalent this question is)

And the answers you find will range from $1 on up.

All of those answers are somewhat wrong. Sorry to say.

The Value of an Email Address Is...

Nothing.

Zero. Zilch. Nada.

You don't believe me? Ok, how about this. Here's an email address: bill@microsoft.com. How about another: steve@apple.com.

Here's a whole bunch.

joe.blow@comcast.info
miriam.johnson@foobar.org
philip.h.crawford@myspace.com

You get the picture? You can buy email addresses (of real people) from spammers for less than a tenth of a cent. Yep, that cheap. And a tenth of a cent rounds to zero for most businesses.

But now you're probably saying "hold on!, I have an email list and you email marketers tell me the ROI is SO great, so my list must be worth something."

Oh, and it is. It's likely worth a lot, read on.

It Isn't the Email Address

The value of a subscriber is in the relationship. The reason you place no value on the email addresses I provided above is because you have no relationship with them.

And if all you have is an email address that someone submitted in a signup form, do you really have enough information to engage them? Think about it this way, if you are sitting at a table with someone and the only thing you know is their first name, can the two of you really have a conversation? Not two way you can't. Sure, you can tell that person a lot of stuff - and this is what most beginner marketers do, but you can't really have a two way conversation, which is the key to email marketing.

So, let's get back to your list. If all you have is an email address, you know there was some reason they thought they could get value from your marketing emails. That's really it. Unless you have more information about them (think columns in your list spreadsheet), you won't be able to engage them. I've written before about list size and that it has more than one dimension.

An engaged subscriber is not simply an email address. It is a person. It's you, it's me, your mom, brother, cousin, friend, neighbor. And none of us, (none) wants you to send us impersonal email blasts. You don't, I don't.

The Value of an Engaged Subscriber List

Let's try a thought experiment.

Let's say you own a restaurant and each month you get the good chance to sit down at a table and tell one of your friends about the upcoming specials, events, and anything else going on with your restaurant. Your friend has "subscribed" to these monthly chats. First, imagine that during these chats you ask your friend no questions - you simply talk at him/her for 15 straight minutes. You wouldn't do that right? Ok, cool. So you would ask questions. You'd probably ask them about their experience the last time they were at your restaurant and you might ask them if there was anything missing from your restaurant that would interest them. Right?

So, from these chat sessions, what value do you think you'd get? First, your friend would probably eat at your restaurant more often, right? Maybe once more per year? Twice? Four times? What is that incremental increase worth to you?

Also, you'd receive valuable information about deficiencies in your restaurant. You value customer comments, I hope, yes? Great, then you'd get that value as well.

So you see, the value of a subscriber depends totally on how much you know about that subscriber and the level of engagement you have with that subscriber. No engagement, no value.

Zip. Zero. Zilch.