How to calculate the value of a new email address

You probably spend a lot of effort to get new email addresses on file, because email is still a fantastic tool for keeping in touch with your audience.

But how much effort – and money – is justified? To know this, you have to calculate the value of a new email address.

To do this, follow these five steps.

1. Identify all the ways you make money from email. That could be …
Ads in the email itself,
Ads on web pages that the email sends people to,
Direct sales

You might have other sources of revenue too, like if you rent your list.

2. For each of these revenue streams, create some basic calculations. For example, let's say you're a subscription publisher and you sell new subscriptions through email. If the value of a new subscription is $500, and every campaign gets a 0.1% conversion rate, then every name on your list is worth 50 cents for each send. That raises the question, how many sends do you get out of a typical email address -- before that address becomes undeliverable.

3. Calculate the approximate life of a new email address.

How long does a new email address last before the person unsubscribes, or the email otherwise becomes undeliverable.

With those three steps you can make a decent estimate of the value of a new email address. But it gets more complicated.

4. Think about different ways you get new emails, and the different types of emails.

Company emails vs. personal emails
Emails you get with a paid transaction vs. emails you get from a free transaction.
Different titles or categories of people behind those addresses.
Some emails come in from different offers

It’s somewhat obvious that each of these groups would have a different value. For example, a business email address that you acquire along with a subscription purchase is probably more valuable than a hotmail address someone gave you to get a free white paper.

But how do you track that? You could use a customer data platform to get close to the right answer, but it’s a pretty big task, which leads to step 5.

5. Avoid Analysis paralysis

The more you think about this question, the more categories and exceptions and caveats you'll discover. If you let it, it will drive you crazy. There are a hundred rabbit holes you can fall into.

You have to get comfortable with the idea that close enough is close enough, and that not all efforts to collect email addresses will result in high-quality names. So if you decide that an email address is worth about $3, adjust your expectations up or down for different efforts.