What’s the value of your email list?

Whether you’re just starting out in email or already have a robust email marketing strategy, this question should be at the top of your mind.

As a marketing channel, email promises unbeatable ROI with industry-wide averages of $41 returned for every dollar spent.

But how do you calculate the actual value of your email list for your business?

Unfortunately, with so many factors to consider—the type of business, industry you’re in, your products, customer base, etc.— there is no one-size-fits-all answer. However, there are strategies to help you frame an answer yourself.

In this blog post, we’ll cover calculations for four different small businesses to help you find the best way to determine the value of your email list.

First: Three universal truths about email

Let’s start off with three universal truths about using email in your business.

 1. An email list is yours and yours alone

Email is one of the only marketing channels that you can own and have complete control over. Unlike paid advertising and social media, which exist on rented space, your email list belongs to you. Even though you might own your website or blog, you’re still at the mercy of search engines and their dynamic algorithms.

Your email list, however, is different. It is a collection of people who have given you consent to communicate with them. That data is yours as a brand and business—it may be managed by an ESP like HubSpot or Klaviyo, but you own that data. And since you own that data, we want to remind you how important it is to routinely backup your email list to ensure your data is secure.

Email lists are indispensable in the digital world. They allow you to communicate directly to your consumers without the trouble of algorithms or the cost of a paid platform. For this reason, customer acquisition costs tend to be lower, making emails an incredibly cost-effective and reliable channel.

2. Size isn’t everything: engagement matters

Imagine you’re preparing to sell your business. One of the first questions a potential buyer or broker will ask is, “What does your email list look like”?

They’re not just interested in how big the list is—they’re interested in your engagement metrics as well. They’ll want to know how often you’re emailing your list, open and click rates, conversion rates, and any important segments in your list. Quality matters and these questions help to gauge the potential value of your email list.

That’s why during our client audits, we aim to spot inflated or vanity metrics. We look to see if your list is bought or earned, if it’s warm or cold, and whether your consumers are genuinely engaged with your brand.

This is where a highly engaged email list is invaluable because it serves as evidence of an active and engaged customer base. It tells a convincing story to potential buyers: You’ve identified your target audience, understand their needs, and have a loyal base.

A good email list offers a glimpse into your business’s potential. It’s a strategic advantage that can set your business apart in a competitive market, offering buyers reassurance that future marketing initiatives will be effective and scalable.

3. Segmentation is your secret weapon

If you’re not employing a segmentation strategy, you’re missing out. Email segmentation is the division of your email list into smaller segments based on set criteria like their interests, behaviors, demographics, among others.

Segments may include influencers or affiliates, press contacts, potential partners, potential hires, and past applicants.

No matter the business you operate, you probably have these segments. Organizing and categorizing your email list into broader helps to paint a compelling story to future buyers: “We have 100 applicants already screened and itching to join our company.” “We have 1000 affiliates waiting for the next marketing promotion to come.” It shows the readiness and potential of your audience.

Now, let’s get into math

Now we’ve covered the basics of an email list, what is the value of your list?

Here are four ways to calculate email list value based on four different business types.

Example 1: A direct-to-consumer eCommerce store

For an eCommerce store, your list’s value relies on both first-time and repeat buyers. A common approach is to calculate the revenue based on your campaigns.

• List size: 10,000 emails
• Campaigns per month: 4
• Average conversion rate per campaign: 2% (0.02)
• Average order value: $40

Now imagine you prioritized list growth, so over time you add 200 emails per month to your list.

Since your email list offers compounding value, over the course of a year that tends to add up to increasing revenue.

This is a simplification to illustrate a point. In reality, there will be other factors working together. For example, most eCommerce businesses see their Q4 email revenue double or triple due to increased holiday shopping. Your product may also be seasonal, or you might have product launches or fluctuations in your stock availability that impact performance.

Regardless of the specifics of your business, the value of an email list tends to compound over time, which is why so many email marketing strategies prioritize list growth.

Example 2: An online course creator

For an online course creator, each email subscriber is a potential student.

Imagine you launched a new course each year and promoted it primarily through email. You keep your list engaged by sending out 2 emails per month with free, valuable content. This value-first approach is highly recommended by any strong email marketing strategy. It helps you to build trust, showcase your expertise, and deliver value, which are essential to driving sales and growing your business.

These are your metrics:

• List size: 5,000 subscribers
• Emails sent: 2x/month
• Open rates: above 40%
• Launch conversion rate: 3% (0.03)
• Online course sales from email list: 150
• Course price: $500

You may have multiple courses available, and may also offer a higher-ticket service like 1:1 coaching at $10,000/year that will need to be factored in. However, for simplicity, we’ve used one single course per year for this example.

Example 3: A high-ticket industry event business

Let’s say you run an event business that hosts high-ticket industry events each year. You primarily communicate via email where you share event dates, speaker bios, and the value each attendee will get from attending.

Events may have a lower conversion rate when compared to other industries due to their niche audiences. To be successful they typically need large subscriber bases to meet minimum participation requirements. This is why pricing strategies like pre-sales or early bird tickets are so common because they help to secure the minimum number of attendees needed to make the event viable.

• List size: 200,000 subscribers
• Event registrations: 200
• Event registration rate: 0.1% (0.001)
• Registration fee: $10,000
• Revenue = $2 million

You might take this a step further and ask “Well, that’s kind of high, what about the 100 people who attended the event last year and are registering again?”

That’s a valid point. Looking at numbers on a surface level like this may give you inflated metrics. You may consider whether email was “responsible” for registration numbers, whether it was due to the quality of last year’s event, or the impression your team made on attendees.

There is the looming question on what can be attributed to email and how much credit it really deserves. That’s a question every business has to answer for themself.

In this case, you can adjust the equation to only attribute new registrations to email.

For example:

We like this example because it shows that you don’t need to rely on traditional conversion metrics. You can calculate value in a way that makes sense for your specific business model.

Example 4: A B2B service-based business

For B2B service providers, an email list often leads to exploratory sales conversations, either directly or by keeping your business top of mind and referrable. While it can be tricky to calculate the value of email in this scenario, this is how we approach calculations for clients and here at Centric Squared.

• List size: 500 engaged contacts
• Monthly emails: 1x/month
• Sales conversations per year: 20
• Number of new projects per year: 6
• Average project value: $1,000
• Number of projects that turn to ongoing retainer clients: 3
• Average monthly retainer services: $3k/month

For this type of business, the question of attribution comes up again: “Sara, how can we attribute all our new revenue to email? That doesn’t seem accurate.” In this case, you can consider looking at what other marketing channels are being invested in, like your blog, Linkedin, and organic social media.

Email rarely works in silos. Ultimately, it acts as the direct line that reminds your audience you’re active, thriving, and ready to help them solve their problems.

To this end, you may attribute a maximum of a third of your revenue to email, aligning it with your marketing investment.

You might look at this example and think “Dividing by three doesn’t feel very… scientific.” And you’d be right—it’s not. Some businesses find it difficult to pinpoint email’s exact attribution to their overall revenue.

One approach is to ask during sales conversations how someone heard about you. While helpful, this also isn’t a perfect science either.

When clients ask this question, we typically recommend that they review their metrics, evaluate their business and come up with a “best guesstimate.” The key here is to be consistent. By using the same estimate consistently, you’ll be able to track trends and uncover valuable insights all the same.

Finding a dollar value per email

Let’s summarize these four examples with where we landed after our calculations and adjustments.

You’ll see from this exercise that every business is different. Each business will have different ways of measuring conversion, different sales cycles and processes, different email list sizes, and ultimately different dollar values to their email list.

What all these examples have in common is that they’re based on the assumption that an investment is being made to keep that email list engaged.

This exercise also highlights why we love supporting B2B businesses so much (hint: it’s not about size at all). While it comes with a different strategy—premised on making your business approachable and referrable—it yields high returns and proves that email in B2B is not to be underestimated.

Closing

Ultimately, the value of your email list is about the strategy, engagement, and opportunities it creates for your business.

Whether you’re running a high-volume eCommerce store, launching courses, hosting industry events, or building long-term client relationships in a B2B setting, your email list is invaluable:

• It’s a direct, owned connection to your audience
• It’s a key business asset
• It makes it possible to calculate a dollar amount in most businesses (if you get creative)

If you must determine a dollar value for your email list, consider the following guiding questions:

• How do you measure “conversion” in your business?
• How can you estimate attribution (credit given to email vs other marketing initiatives you may be investing in)?

Wherever you land, however you choose to calculate value, we’ve seen firsthand that businesses can drive immense value from a value-first email strategy.

In our experience, when trying to gauge email’s impact, it’s less about how you calculate value and more about consistently spotting trends and learning to draw insights. That’s how you’ll ultimately see maximum returns with email as a channel.

About Centric Squared

At Centric Squared, we believe in the power of authentic relationships with your customers and love growing email marketing programs for our clients. We offer Email Marketing, SMS Marketing, and List Growth services. Reach out and let’s talk about your email marketing strategy. Book a call today.