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The Art and Science of Growing Your Email List: Determining Subscriber Acquisition Cost

by Karen Talavera  |  
January 20, 2014

In this article you'll learn how to...

  • Evaluate email list-building sources by quantity and quality
  • Determine which of your email marketing list subscriber acquisition methods are the best
  • Calculate how much you can afford to invest in actively growing your list

I was paid $16.56 for my email address. You read that right: CVS, the drug and pharmacy chain, paid me that much to acquire my email address.

There I was, in my local store, buying about $40 worth of health and personal-care items, when the clerk offered me an instant 20% savings on my purchase in exchange for my email address. So I gave it to her to receive a discount of $8.28, which somehow (likely by mistake) was applied twice for a total savings to me (and cost to CVS) of $16.56.

At two recent business events (which did not provide exhibitors and sponsors with attendee lists), I noticed that exhibitors were actually paying attendees cold hard cash in exchange for their email addresses. Yes, they were handing out the green stuff in a blatant, unmasked exchange for data.

One business coach offered passersby $1 for a name and email address, and $5 for a completed lead-qualification questionnaire. At another event, an exhibiting sponsor held a stack of crisp, fresh dollar bills and asked all visitors whether they would like $1 in exchange for their email address. Most attendees cruising the exhibits at these events happily gave up their email addresses and took the money.

Compared with a dollar, $16.56 might seem like a pretty hefty price to pay for an email address, but we would do well to reserve judgment, remembering that the value of an email (or any marketing list) subscriber is entirely relative to the value that the average subscriber brings to your business over the course of a year. And not just over the course of a year... but over the course of their entire customer lifetime with you.

So how do you determine the value of new subscriber as well as the limits of what you'd be willing to pay to get one?

With upward pressure to reach new markets, compensate for list attrition, and reach current customers in new channels (like mobile), the importance of not simply maintaining but expanding your digital marketing lists cannot be overestimated.

In this two-part series, I'll explain two critical measures to include in your key marketing performance indicators and thoughts on how to determine each. This month we'll begin with CPA (cost per acquisition); next month we'll explore RPS (revenue per subscriber) as a way to assign an average economic value to each subscriber on your list.

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Karen Talavera heads Synchronicity Marketing and writes about how to successfully use email, social, and content marketing on the Enlightened Emarketing blog. You can also follow Karen on Twitter (@SyncMarketing) and Facebook for daily tips and links to emerging email and social media marketing trends, facts, and research.

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