Articles - Written by Arthur Hughes - 513 Comments
The Value of an Email Name
|A name and address with the matching email and permission to use it can be a very valuable commodity – much more valuable than a simple name and address. There are many reasons why this is so:
Let’s put all these factors together to estimate the value of an email name.
In this article, I would like to explore the basis for the first three valuations plus the newsletter. In a subsequent article I will explain how the other values are derived.
Message for message, email is cheaper to send. Suppose you send regular promotions four times per year to your customer base. Your response rate might look like this:
As you can see, the response rate to direct mail is higher than that of email. This will normally be true, although not always. The high cost of direct mail in comparison swamps the improved response rate giving the profit per name of email a 60% lift.
At a rate of four promotions per year, your emails are worth $1.28 per year or $0.48 more than a simple name and address.
Low Cost Item Promotion
There are many items that you simply cannot profitably promote by direct mail. One example is the Universal Music promotion of musical CDs, which sell for about $20 each. The profit to a company selling a $20 item directly is probably on the order of $8.00 per item. Here is the way the promotion could work out:
The direct mail is a loser so no one would attempt it. Each email name earns, on the other hand, a healthy $0.32 per year. This is found money that comes from having the emails.
Last Minute Special
Only certain companies have last minute specials. These include airlines, trains, hotels, rental cars, cruise lines, live theatre, sporting events and concerts: any company that sells something that disappears if not used. It also applies to retail stores that are having a special sale that comes to an end in a very few days. These things cannot be sent by regular mail because it is too slow. Here is what the value looks like:
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