How to Determine The Value of an Email Subscriber
By Christopher Knight
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First, let's get this up front: Only the marketplace can truly be the determining factor for the value of any subscriber base.
I'd like to talk about the value of list membership bases that are for FREE newsletters (those without a subscription fee required), which I believe are the current majority. If you have a list of folks who are paying subscribers to be part of your list, then the valuation is probably related to the total revenue coming in from your list members, and can be from 1/2 a years sales to 1 to 7 years sales.
But, for free lists; Lists like this one that you did not have to pay to become part of, the value is anywhere from $0.00 to $1.00+ per subscriber, and more. If you can prove that your advertising produces tangible cash return or results consistently, or you have a large percentage of a focused niche that someone else is interested in paying dearly to reach -- you may find higher valuations. Often times a new buyer can repurpose a list to serve a higher cash return than you may be able to and this weighs on the value of the subscriber by both parties.
Now, WHERE did I get those numbers from?
Several of my clients are large email list owners, and they very often will do cash deals with other large list owners to promote each others list and they pay each other for every list member that joins their lists.
((Think of these deals as Sponsorship Swaps 202 with a Cash twist.))
.....many of these folks you would recognize, so to protect my clients confidentiality, I won't be able to share their names, but I can tell you that the $1/per subscriber is the most common number used in deals such as this one.
What is important to remember, is that the marketplace is STILL the main determining factor as to the actual value of your email list membership and until someone offers to buy it and put their money where their mouth is, that will be the only TRUE way to know the real value of your base.
Many email list owners have also failed to sell even large bases, as I have two clients who just stopped their lists recently because of lack of money or interest. Their lists were 9,000 and 79,000 in size and it's a shame to just stop all of the years of effort that it took to get them to these sizes -- without selling to another related party that can carry the torch for their fans or list members...and preferably someone who you trust or has a excellent reputation.
In closing, EVERY list membership has a value, and acquiring new subscribers will ALWAYS have a cost of acquisition. If you keep that cost of acquisition to between free to $1 per subscriber, you are often "on-target".
To Your Lists Success!
This Ezine-Tip was submitted By Christopher Knight -- Email List Marketing Expert, author and entrepreneur.
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Ezine-Tips for July 08, 1998
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