Email Marketing Lifetime Value

Business question

Email marketing could be a really effective way of online marketing, if you can build a relevant audience for your products or services. You can find many best practices for email marketing, but keep in mind digital analytics can be used on this field too.

Let me ask you that, do you know if a newsletter signup conversion cost is 100 USD, do you have a positive or a negative ROI? Today we will figure out how we can calculate email marketing lifetime value.

What is the definition of email marketing lifetime value in my interpretation? Total revenue occurred by a unique newsletter signup during its overall lifetime. Overall lifetime means the period between newsletter signup and unscribe.

Example for shopping cart sites

Let’s see an example for newsletter lifetime value. One subscription made 25 clicks and 5 purchases in your shopping cart site during 6 months, then he unscribed from your newsletter. From these 5 purchases you made 1000 USD revenue, so the lifetime value of this unique newsletter signup was 1000 USD. This is only a value for a unique signup, but if you calculate this value for each signup, you will get the average lifetime value, so you can define accurately your newsletter signup conversion value.

Email marketing lifetime value implementation

The key point of method is to use custom campaign parameters in your email links, so you can identify a specific signup easily. I recommend to use signup ID in from your email marketing database, because you won’t hurt any privacy rule in that way.

Choose any of custom parameters, but usually required parameters (utm_source, utm_medium, utm_campaign) are used for other measuring goals. You have two optional paramter (utm_content, utm_term), feel free to use any of them to add newsletter signup ID.

There are many great newsletter solution like Mailchimp, but I am sure about you can implement signup ID from your database to add as an optional parameter.

Measuring email marketing lifetime value with Google Analytics

email marketing lifetime value

After implementation you need to wait a couple of months to collect data before analyze them. Open your Google Analytics account and click on Acquisition/Campaigns. From “Primary Dimension” choose “Other” option and look for “Ad Content” dimension (if you used utm_content as a parameter). Then you will find all metrics for an individual newsletter signup, especially for revenue. If you sum revenue from each signup then you divide number of subscriptions (number of lines what you can see in Google Analytics), you can figure the average email marketing lifetime value.

Digital analytics is easy and smart

That is a pretty easy and smart solution from digital analytics, isn’t it? That is a good example to use smart solutions with small efforts to understand better your audience and optimize your online marketing spendings and acitives based on datas.

Do you have any other idea how we can improve this method to get more data and build smarter models? Do not hesitate to comment and write your ideas!

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>