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What is the worth of an email address?

What is the worth of an email address?

The value of an email address is Zero. Why? Read on.

Email marketers often speculate the value of an email address. You might hear compelling numbers backed by sober theories. Good email marketers spend time and money on acquiring an email address, where as not so good email marketers purchase email addresses from spammers at probably one fourth the cost (of genuinely acquiring an email address).

In addition there is revenue, conversions, ROI that email marketer’s measure against their email marketing efforts, all this should amount to something right?

Well it does, the value or the worth lies in the relationship and not the email address. You have a relationship with the person who owns that email address and not with the mere email address itself.

Why I’m highlighting this is because you can’t have a relationship with someone you do not know. So if you only have an email address your like a blindfolded chap in a dark room trying to have a conversation with an imaginary person. A real conversion requires engagement. Engagement requires you to know your subscribers, ask questions, find their opinions etc. Most importantly, engagement requires “two way conversation”, which cannot be initiated with just an email address.

An engaged subscriber is a valued subscriber. No engagement means zero value.

Email Marketing to Improve Customer Acquisition and Customer Loyalty

When it comes to marketing, traditional or web-based, “customer acquisition” is a key indicator when determining success and Return on Investment (ROI) from your marketing efforts. “Customer loyalty” is also very important as we know that the lifetime value of a customer is dependent on how well we communicate with and retain customers.

The following are published industry facts focused on web-based marketing and the effects on “customer acquisition” and “customer loyalty”.

Customer Acquisition Facts

Permission marketing yields 30% increase in conversion and a 10% increase in return on investment. (Permission Marketing, Seth Godin) Traditional direct marketing costs $1.50 per item, while online direct marketing averages 15-30 cents. (Andersen) Traditional direct mail averages 1-2% response rate. Permission marketing averages 10-15% response rates. (Direct Marketing Association) 80% of your visitors will never return to your website. (eMarketer) The odds of selling a product to a new customer are 15%, whereas the odds of selling a product to an existing customer are 50%. Email click-throughs measure 3-10x that of banner ads at 2-20% CTR. Internet users represent over 72% of the U.S. population and greater than 25% spend their time online using email. (UCLA Report 2001) Customer Loyalty Facts It costs 5 -10 times more to acquire a new customer than it does to retain an existing one. (Emarketer) If you trail your competition by 20 points in customer loyalty you are out of business. Improving customer interactions is one of the single largest impact areas, across all industries. (Accenture) A 5% increase in customer retention yields an increase in profits between 25 -100%. Customer Loyalty Fact - Repeat customers spend 67% more; After 10 purchases, a customer has referred up to 7 people. (Bain & Company) Online promotions generate 2 to 5 times the customer response rates of traditional promotions. 70% of complaining customers will do business with the company again if it quickly takes care of a service snafu.

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