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?