The Chaffey Column July 2009 - The value of your email list

Do you know the value of your email addresses and quality customer data?

The quality of data your customer email list is the foundation for successful email marketing.

It's obvious that a healthy list will mean that you can deliver more relevant emails and so get a better response from your email campaigns.

But list quality isn't always the most interesting part of email marketing. In fact I always start my training workshops with a short discussion of list quality since I want to highlight its importance, but move more swiftly on to the more interesting aspects of email marketing like targeting and template design.

Measuring the health of your list

In my book "Total Email marketing":http://www.davechaffey.com/Total-E-mail-Marketing I recommend that businesses track these aspects of their customer data:

First of all it is important to look at list-size and list growth using measures such as:

• Subscriber number including unsubscribes and % change through time

• Coverage (% of database with e-mail addresses)

For business-to-business marketers it's important to follow-up on emails which give a "hard-bounce" reply since this may mean that your customer has left the company and a follow-up phone call can find out a new contact. Many businesses have a follow-up process, sometimes sharing the phone calls, but not all.

Additional list quality measures help show the value and quality of each email address and will help improve your capability to target. Email quality measures include:

· Permission (opt-in % to different communications types within the list preferences)

· Profile depth (from level 1 to 3 as described in the section on E-permission marketing)

· Audience composition (are the demographics or roles of list members consistent with your target audience, for example, what proportion of gatekeepers)

· Deliverability (% bounces and messages that are delivered)

· Response activity (% opens / clicks across year) – you may want to breakdown by segment to see how well your communications are received by different audiences. You can setup an activity score which shows the number of opens, clicks or outcomes per year.

· Value delivered – Calculate revenue / cost and profitability per list member, again it may help to break this down by segment and compare to other media.

Many companies will now clean their list by removing addresses that have been inactive for a year. This can also help with delivery.

Calculating the value of an email address

I was reminded recently of the importance of managing your email data recently when I saw this new email value calculator (http://www.emailcenteruk.com/calculator) from Email Service Provider Emailcenter.

To find out more how to use this tool, I turned to Sean Duffy, Principal Email Marketing Consultant at Emailcenter who I have corresponded with for five years now since email practice has evolved.

Sean explained that without knowing how much an email address is worth, it's difficult to determine how much you should budget for acquiring email addresses. It also helps builds a business case for enhancing your email marketing strategy by demonstrating the potential uplift in performance which more advanced techniques will bring.

To calculate the value of your email addresses you need a combination of statistics about your existing email marketing such as database size, number of new subscribers, number of addresses that bounce each month and how many sales your emails currently generate. We have a calculator on our site, which uses assumptions about net list growth and projected sales figures and the average length of time a customer remains on your list.

So what do you do when you have all this data to get better results?

The main action is to make sure you are as relevant as possible. This means tailoring content for each individual or segment of your database. Relevance also relates to the timing. Relevant messages can be sent shortly after a customer registers, 30 days before their renewal or perhaps delivering a happy birthday message with a special discount voucher.

There are also some simple tactical things you can do. Running simple tests of different variations of your email to different samples of your database can have very significant results. For example one Emailcenter client saw a 35% increase in open rates through testing different ‘From’ names in their email.

About the author

Dr. Dave Chaffey, is the Director and lead consultant for Marketing Insights Limited, an independent digital marketing consultancy. He is the best selling author of several Digital Marketing books used by digital marketing professionals and on many University and College Courses globally.

His latest book, Internet Marketing: Strategy, Implementation and Practice, now in its 4^th edition, was published in January 2009.

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The Chaffey Column July 2009 - The value of your email list

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