Have you ever wondered how much worth your company’s mailing list is? This value is a great indicator for your email marketing’s success and for the valuation of future measures. For example, would it be worthwhile to start re-engagement campaigns for inactive subscribers? Or even more important: Based on the knowledge of your mailng list’s value you’re able to make decisions about the rentability of new lead generation measures. Read in this blogpost how to calculate the value of your mailing list.

Calculation of Customer Lifetime Value in B2C

In many B2C business models the sum of all email marketing subscribers’ customer lifetime value is synomymous with the value of the email marketing mailing list. The customer lifetime value measures the value a subscriber contributes to your company during the complete period of time of him/her being your subscriber, to be more specific: the customer lifetime value measures the average contribution margin per subscriber.

To calculate the customer lifetime value take into account only revenues and variable costs, that can be related to your email marketing. Easier said than done. Attribution of marketing is still a great challenge. This is relatively simple for online shops. Revenues that are generated after a click in a marketing email are easily related to email marketing. What variable costs occur to you for each single subscriber depends ususally on the pricing modell of the technology you are making use of. Many providers of email marketing technology bill per data set or per dispatch (in addition to a fixed amount to supply the technology).   

  1. Identify the contribution margin for a certain period of time (e.g. one year).
  2. Divide this figure by the average amount of subscribers during the period considered.
  3. Now multiply this value by your subscribers’ average lifespan. Thus you obtain the average customer lifetime value per subscriber.
  4. Multiply the average customer lifetime value per subscriber by the current amount of subscribers in your mailing list, you’ll obtain the current value of your mailing list. Calculate this value also for single segments, if this seems useful.

How to calculate the value of a lead in B2B

For many B2B business modells email marketing doesn’t generate any direct revenues but generates leads and nurtures those into potential customers. To determine the average value of a lead, do the following. Determine

  • the conversion rate from lead to customer and
  • the average customer lifetime value WITHOUT attribution to email marketing

Multiply the calculated conversionrate by the amount of subscribers that aren’t customers yet, multiply this value by the customer lifetime value.

The qualification of leads in B2B-Marketing is of outstanding importance. Leads are rated by

  • company size
  • business sector
  • the lead’s position respectively his/her impact on decisions made or whether he/she is a decision-maker
  • his/her maturity regarding a decision (e.g. „Just wanted to have a look“ vs. „Requested a demo tour“)
  • …

This valuation can be made (partly) automated or manually by a sales staff member. The result of such a valuation forecast closing probability, potential revenues or customer fit. Use such quality criteria to improve the valuation of your mailing list.

Value of mailing list is known – what now?

No matter if your business is in the B2B or B2C sector, if you know the value of your mailing list, make use of this key figure to evaluate your email marketing measures. For example, compare the costs of an Adwords campaign to generate new newsletter recipients with the additional value new recipients add to your mailing list. Or compare the revenues you might make with an particularly aggressive mailing campaign with the loss in value caused by increased deregistration that might occur due to the same campaign.

Remember to re-calculate all relevant parametres whenever you do a new calcution of the value of your mailing list. Has the B2B mailing list increased by 10 percent, does this not automatically increase the value of your mailing list by 10 percent. As maybe the conversion rate has improved thanks to a new lead nurturing measure. Or the customer lifetime value has increased when you changed your pricing modell? The value of your mailing list will always be a snapshot.