So, .
Jim sells $15,000 worth of flowers online a month.
He has 5,000 email subscribers.
This means that Jim earns $3.00 per month in gross phone number list revenue from each of his newsletter subscribers.
But Jim only keeps 50% of it.
So, Jim actually earns $1.50 a month from each of his newsletter subscribers.
How to Determine How Much You Can Spend to Acquire an Email Subscriber for Your Ecommerce Email Marketing
At the simplest level, it seems like you can spend $1.50 to acquire an email subscriber for your email ecommerce efforts. That would make sense, but something is missing. It’s missing:
1) How long do your newsletter subscribers stay on your list;
2) How quickly you need to be reimbursed.
Let’s start with the first one…how long do your email subscribers stay on your list? Some of your email subscribers will drop off. This is because some people will unsubscribe and some today’s stock price hit the daily limit may delete their emails altogether. Therefore, it is important to understand how many people are dropping off your email list each month.
Let’s say 5 percent of your newsletter subscribers drop off each month.
This means that all your subscribers will cease within 20 months.
Therefore, your email subscriber LTV can be estimated at $1.50 per email subscriber x 20 months = $30.
But most companies can’t sit around for 20 months fresh list waiting to recoup their marketing expenses. So, you need to figure out how quickly you’ll get paid back. There are a number of factors to consider. But the most important factor is that if you have a lot of money, you can afford a longer period than if you have very little money.
This is the secret of well-funded e-commerce companies. They can afford to spend money to acquire email subscribers and customers and they don’t need to have a positive ROI on that subscriber/customer for a long time.
But if you are self-funded, you will need to get paid back much faster. There is no exact rule of thumb, but let’s say it is 3 months if you are self-funded and 7 months if you have a venture investment.
