It’s a fact. Someone will unsubscribe every time you send a batch promotional email. And while we all hate to see our subscribers go, wouldn’t you be open to a higher unsubscribe rate if it meant increasing your revenue? How you view your unsubscribes not only affects your email strategy and its revenue potential but also influences improvements you should make to your automated messages and your yearly list growth goals. Let’s discuss.
People unsubscribe for a variety of reasons. The most common include receiving too many emails and irrelevant content. Often, the “too many” threshold is actually determined by the proportion of irrelevant content, those situations when the content is meaningless to the reader or fails to change from one message to the next. I know of retailers who send every day, or even multiple times daily, whose unsubscribe rate is no different than the retailer sending only a few times each week. While there may be an opportunity to drive additional revenue by increasing sends, we need to recognize the full impact of those sends on a subscriber database.
At what point do the inevitable unsubscribes begin to hurt your bottom line? Determining the cost of the unsubscribe is an important step to answering that question. Knowing the cost can help you optimize your sending strategy throughout the year, particularly when planning for periods of increased sending, such as the holiday season.
What Do Unsubscribes Cost?
First, look at your weekly and monthly unsubscribes and their order history. How many unsubscribes were non-buyers, one-time buyers, or frequent buyers? How much revenue did they account for? This is your potential lost revenue on a per email basis. Now that you have this number, determine how much revenue an average email generates. These totals will give you some basic data to figure out how much unsubscribes are really worth.
In the example below, the number of unsubscribes over a one-week period (assuming four sends) was 300, and they accounted for $10,400 in past revenue.
How to calculate the cost of an email marketing unsubscribe
However, we know only 100 of the 300 contacts accounted for that revenue. Using these figures, on a per send basis, we can assume a loss of $2,600 in past revenue from unsubscribes. However, if each email sent generates an average of $15,000 in revenue, we are left with an overall net gain of $12,400 per email. So, increasing sends from four to five days per week should net roughly an extra $645,000 in yearly email revenue while resulting in an increased loss of 3,900 contacts (75 per week for 52 weeks) in unsubscribes.
In this scenario, the extra revenue driven for every unsubscribed contact was $165. That’s a nice figure, especially considering 2,600 of the 3,900 unsubscribes come from non-buyers.
Are Your Non-Buyer Opt-Outs Worth It?
You can take this one step further and analyze the length of subscription among your non-buyer unsubscribes. How many have been a part of your email program for less than 30 days, between 1-3 months, and so on? Are the non-buyer unsubscribes recently acquired prospects you have lost, or have they simply been dead weight on your email list all along? Now, look at your purchasers. How long has it been since their last purchase?
How Do Email Unsubscribes Affect List Growth?
If we know 300 contacts per week are unsubscribing (4 emails at 75 unsubscribes each), and we add one extra email each week, we assume we will lose 375 per week. Over one year, we will expect to lose 19,500 contacts to unsubscribing. In order to maintain a positive subscriber churn, this should be the minimum goal for yearly subscriber acquisition. I say minimum because you will naturally see members of your list unsubscribe from other emails you send, such as automated messages.
Having a concrete acquisition goal is imperative for maintaining the health of your email program. If you’re not focused on the acquisition, you should be. Explore all areas for potential sign-ups, especially in the wake of Google’s recent pop-up changes.
What Can Opt-Outs and Converters Tell You About Automated Messaging?
Looking at the order history of your unsubscribes may also indicate engagement opportunities to address. For example, if most unsubscribes are one-time purchasers, you may need to strengthen your post-purchase program for first-time buyers or do a better job meeting overall customer expectations with orders. If the opt-outs are from recently acquired non-buyers, it may be a sign you need to strengthen your onboarding process to help drive conversions or more closely analyze your acquisition method.
Do the same with converters. Look at the makeup of purchasers on a per email basis. Did the conversions come from non-buyers making their first purchase, one-time buyers buying for a second time or three-plus repeat purchasers? Remember, each of your email converters should now funnel into a post-purchase campaign, which should either convert them once more or strengthen your brand loyalty prospects.
Gaining these insights will help you know when to strengthen areas of your post-purchase program specifically dedicated to first-time and returning buyers.
Final Considerations
Honestly, I never worried about unsubscribes. Frankly, if a contact opts out, they have made the decision to stop interacting with you via email well before pushing that button. If it wasn’t this email, it would have been the next one. Do your best to encourage subscribers to want to stay, but focus more on delivering quality to those who still open your messages. Here are some strategies and resources to guide you along this journey:
Focus on lifecycle messaging. Build a customer-centric post-purchase program that reinforces brand value and helps create loyalty, and create a relevant onboarding welcome series for newly acquired contacts.
Send relevant emails, especially to previous buyers. Segment where you can, and consider tactics like inserting product recommendations into your emails. Customized product recommendations can even make batch-and-blast messaging more relevant.
Focus on subscriber acquisition. If you are not creating a positive churn in subscribers, you need to get serious about list growth.
Consider offering pause or mute options to curb unsubscribes and give your contacts a temporary break from your emails.
Don’t let the communication end. Optimize your opt-out confirmation page to include invitations to connect in other ways, such as social media.
Start worrying less about unsubscribes, and begin paying closer attention to what those unsubscribes can teach you about how to strengthen your email program and drive more revenue.
This article was originally posted on Bronto.com