What Is A Subscriber Worth?
By Justin Premick February 1, 2007
Lately I’ve come across a lot of blog and forum posts that ask how to determine the value of a subscriber.
This is an important question for any marketer. After all, if you don’t know what your subscribers are worth, then you can’t decide how much time, effort and money you’re willing to dedicate to building your list.
I’ve come across a lot of blog and forum posts that ask how to determine the value of a subscriber.
Good question. After all, if you don’t know what your subscribers are worth, then you can’t decide how much time, effort and money you’re willing to dedicate to building your list.
I’m not an accountant. This post isn’t about measuring keyword costs, setting optimal price points or determining revenue per mailing.
I’m more interested in how we define value when we ask “What is the value of a subscriber?”
Most of the posts I’ve read imply that subscriber value is simply revenue/sales divided by some action (such as the number of messages sent).
It’s easy to see why. If we define subscriber value that way, we can more easily calculate it, measure our costs against it, and correlate things we do to changes in it.
But is revenue all that makes up subscriber value?
I say no. Subscriber value comprises many factors.
I‘ll skip the part about how you’re in business for more than just the money, and that you really do want to meet your subscribers’ needs. Because let’s face it, if you don’t agree with that, you’re not still reading this post anyway.
The precise impact of referrals is difficult to accurately measure, but nobody argues that they have an effect on your business. One example of this is when subscribers forward your messages to others. Another is people just talking about you, your messages and your business.
The more you can get your subscribers to refer you to others, the faster your list, and your business, will grow.
If knowledge is power, then this is a big part of subscriber value.
Subscribers provide indirect feedback about your campaigns in the form of unsubscribe, open, and clickthrough rates. They also give you direct feedback by responding to your messages, posting on your blog, and giving testimonials.
Feedback helps you to improve your campaign and your business as a whole, at a much cheaper price than any marketing consultant will quote you.
Metrics can help to improve your revenue per subscriber, and you should take full advantage of them.
Just remember that your subscribers do more for you than just make purchases, and that you should be taking those other things into consideration when determining what your subscribers are worth.
P.S. Not All Subscribers Are Equal
It’s also worth noting that some groups of subscribers can be more valuable to you than others.
The groups that you find to be more valuable will vary depending on what your goals are for your subscriber list. For example, do you more highly value:
- Newer subscribers, who more recently expressed interest, or long-time subscribers who you’ve built trust and credibility with?
- Subscribers from a certain age group or geographical area?
- “Advanced” subscribers who are more knowledgeable in your area of expertise, or “newbies” who are coming to you as their first source of information on a subject?
Also, I can’t leave this post without reminding you that qualified subscribers are better than non-qualified ones.