How to calculate email subscriber value in 5 easy steps

Because email marketing typically has a good return-on-investment (ROI), many teams don’t bother to investigate exactly how profitable their strategy is overall. They spend precious time and resources building their subscriber lists, integrating the latest email marketing trends, and sending out stunning email marketing campaigns, but don’t actually know how much revenue the average subscriber brings into their business.

Well, that disconnect stops now. Calculating email subscriber value is a great way to understand the kind of income your contacts are generating for your company alongside other important insights like lifetime value and specific marketing campaign ROI.

Let’s explore what email subscriber value is, how to calculate it, and some best practices to implement when you’re figuring it out.

Email subscriber value (SV), also known as marketing allowable or revenue per subscriber (RPS), tells you how much income your email marketing contacts bring your business. 

It’s a valuable metric that’s relatively easy to calculate, and it can inform everything from what individual subscribers are “worth” to how much time and effort you should invest into acquiring new leads and growing your email list.

Calculating your email subscriber value is pretty straightforward. If you want to know how much income your contacts are producing for your business on average, take the following steps:

To calculate your email subscriber value accurately, figure out how many active subscribers you have. Active is the key word here, because inactive subscribers don’t bring any income into your business or carry any value. For that reason, it’s a good idea to do some basic email list management before you start figuring out the average value of your subscriber list.

As a basic rule, if any of your subscribers haven’t opened and/or clicked on any of your email marketing content over the past six months, they’re an inactive contact.

So, you might have 10,068 email subscribers, but only 9,700 active email subscribers you should use to calculate subscriber value.

This step is one of the most difficult parts of calculating email subscriber value because it’s not always easy to attribute sales to a certain marketing strategy. Depending how far you want to get into the nitty-gritty details, you may have to hold multi-department meetings to figure out what percentage of your company’s yearly sales came from email marketing.

However, the following kinds of sales are usually easy to attribute to email marketing:

And these kinds of sales are more difficult:

Email marketing software for ecommerce often estimates how much revenue individual marketing emails produce, but this data doesn’t always tell the full story. You’ll likely need to do your own research on top of those metrics.

Once you’ve spent some time on this step, you’ll eventually come up with a rough number of how much income resulted from your email marketing strategy during a specific time period. Some marketers choose to then calculate newsletter cost and subtract that from their gross income to get a more accurate “net” picture of average email subscriber value.

To get an email subscriber value that’s relevant to your business needs and email marketing goals, you’ll need to work with a specific time frame in your calculations. 

Some of the most common examples include:

Now that you’ve figured out how many active subscribers you have, how much income you made from email marketing sales, and the time period you’re working with, you’re ready to calculate your email subscriber value. 

There are a few different ways to determine email subscriber value, but let’s work with the most straightforward method for this example. Say your company wants to determine annual email subscriber value to inform your ecommerce email marketing budget for the upcoming fiscal year.

You have:

When you divide Y by X, you get: $15.78 as your annual email subscriber value.

Figuring out email subscriber value is only useful if you consider your findings and put them into action to make more strategic business decisions and drive long-term marketing success.

Here are just a few of the ways you can analyze email subscriber value to optimize your approach to email marketing:

Now that you know how to calculate email subscriber value, keep the following tips and best practices in mind to make sure your calculations are helpful, accurate, and can actually help move your business forward.

As we mentioned above, you can choose to work with lots of different time frames when you’re figuring out average email marketing subscriber value. 

To determine the best time period for your calculations, get clear on why you want to figure out average subscriber value in the first place.

Here are some examples of how that looks in practice:

While email subscriber value is a great metric for businesses of all sizes to monitor, it’s not the be-all-end-all. In fact, email subscriber value is most insightful if you analyze it alongside other helpful ecommerce email marketing metrics, and here are some of our favorites:

Read Next: Email Opt-In Best Practices

We’ve covered one of the easiest and most straightforward ways to determine email marketing subscriber value in this article, but there are several different approaches you can take. Depending on your situation, another method might be more appropriate. 

Here’s an example:

All in all, calculating average email subscriber value should be an integral part of any savvy marketing team’s strategy. It doesn’t just tell you how much money individual email marketing contacts bring into your business—it can also assist you in choosing your ideal types of subscription forms and optimizing your overall email marketing strategy, deciding where to allocate your marketing budget, informing lead acquisition and customer retention, and helping you create more impactful marketing campaigns.

Perhaps more important of all, one of the best things you can do to continually attract new subscribers and retain loyal customers is consistently sending out professional, engaging, stunning email newsletters with a top-of-the-line email service provider like Flodesk. We’ve even got a lengthy 30-day free trial so you can assess our platform for yourself, no strings attached.

You can calculate email subscriber value, also known as marketing allowable or revenue per subscriber (RPS), by dividing the direct sales you made via email marketing within a specific time period by your number of active subscribers.

For example, if your business made $100,000 in direct sales with the help of email marketing in a year and had 10,000 active subscribers, your annual email subscriber value (SV) would be $10.

With that data, you can also calculate total lifetime email subscriber value.

The biggest way email lists make money is by driving traffic to websites, landing pages, product pages, or online shops and boosting sales. However, there are lots of other ways email marketing can make money, including:

Using a premium email marketing software like Flodesk makes it easy to monetize your subscriber list — sign up for a free trial!

It can be difficult to determine the overall value of your email list, but one easy way to figure it out is by calculating your annual email subscriber value.

That data will tell you how much income each of your email marketing contacts brings you throughout a specific time period on average. You can also use that information to figure out total lifetime email subscriber value.