March 07, 2007

E-Mail Opt-Out Rates, Measured Over Time

One of these days, it won't be so easy to grow an opt-in e-mail subscriber list.

Before that day arrives, produce a report that tells you how many e-mail addresses survive for three, six, nine and twelve months after the e-mail address is acquired.

Let's assume you have a weekly e-mail campaign, where each e-mail address receives one e-mail blast per week. Assume you acquired 10,000 new e-mail addresses on January 1, 2006.

After three months, 7,500 e-mail addresses are still valid (not invalid, did not unsubscribe).

After six months, 6,500 e-mail addresses are still valid.

After nine months, 5,800 e-mail addresses are still valid.

After twelve months, 5,500 e-mail addresses are still valid.

There are several neat little nuggets of information here.

In the first three months, you lost a quarter of your new subscribers, for one reason or another. While twenty-five percent represents a huge number, the number is masked by the individual campaign opt-out/invalid rate of just 2.1%. In other words, if you lose 2.1% of your list on each of the first thirteen campaigns, you lose a quarter of your list in just three months.

In months four through six, you lose 1 - (6,500 / 7,500) = 13.4% of your remaining list. This means the individual campaign opt-out/invalid rate is about 1.1%.

In months seven through nine, you lose 1 - (5,800 / 6,500) = 10.8% of your remaining list. This means the individual campaign opt-out/invalid rate is about 1.0%.

In months ten through twelve, you lose 1 - (5,500 / 5,800) = 5.2% of your remaining list. This means the individual campaign opt-out/invalid rate is about 0.4%.

On an annual basis, those tiny percentages yield a whopping 45% opt-out/invalid rate. This means you are turning over nearly half of your new subscribers, on an annual basis.

All too often, we look at individual e-mail campaigns, and pat ourselves on the back when we only lose a half-percent of our list. When projected across time, we see a more interesting story --- in this case, 45% of the list disappeared.

Our industry needs to do a much better job of analyzing digital media (e-mail, search, portals, affiliates) over time. We need to spend less time within specific campaigns. We need to step back, and look at the big picture.

How many of your new e-mail subscribers survive a year on your e-mail file?

5 comments:

  1. Perhaps it is not the best place to ask this question but I am a regular reader of your blog and my question is tangential to your topic.

    As manager of a small consulting business in France, I'm looking for managing a compagny newsletter on the web.
    What service or tool would you recommend for this tash?

    Best regards.

    ReplyDelete
  2. Thanks for the question. I am probably not the right person to ask the question of, though you might want to query the folks at the Blog Business Summit in Seattle. They will be able to help you, or will know of folks who can assist with your challenge.

    ReplyDelete
  3. What a great step-back from the campaign by campign, as you said "patting on the back" for a low opt-out rate. I'd be interested to see what kind of home address churn there is, turning current customer mailings into really just prospeting.

    I work in new media, Voice & Mobile marketing and we see about 3% a month churn in home phone numbers on average - the really interesting trend is what's happening with cell phone #'s which we use for opt in text messaging.

    This will make sense to most: Think of how many times you have moved in the last say 7 years, how many times you have changed your home phone number or email address? Compare that with your cell phone #, with number portability all of the above have changed at least 2 x's for me but my cell has remained the same throughout.

    How does that all tie in to the topic? We see incredibly low opt-out rate with CRM cell phone text messaging, while the list may not grow as quickly as an email list, it does grow and stays sound & loyal! (did I mention our latest most responsive group is women 35 - 55)?

    I believe we should all be consistantly reading and learning, eg. good blogs like yours, non-competitive catalog marketers, etc. Re-exploring what new options are out there to reach our customers, finding ways to segment our customers by their true communication preferences, not just our standard options.

    Just my two cents - Thanks for the great blog - My blog should be linked by clicking on my name if you'd like to come over for a quick visit.

    ReplyDelete
  4. Is there an expiration on opt-outs? That is, if someone opts out of receiving a weekly email newsletter, for instance, is their email address to be permanently barred from that newsletter, or is there a time limit to their opt-out? Can a publisher legally send a newsletter to an address that opted out if enough time has gone by?

    ReplyDelete
  5. I think you're obligated to honor the opt-out request until the customer elects to opt-in once again.

    Now if you wrote language into your privacy policy (I don't endorse this strategy) that said that the opt-out lasted "x" months, maybe you could re-introduce the customer to your marketing activities.

    ReplyDelete