Marketers like to compare numbers, and the email marketing metrics that I see the most are the ones that are featured front and center in your email marketing app's dashboard: open, click through, and (maybe) unsubscribe rates.
People obsess over these numbers.
"Is my open rate high enough?"
"2%! Why aren't more people clicking the links in my emails...?"
And on, and onn, and onnn they go.
Show me the money.
The metric I chiefly care about is the average value per subscriber.
A quick, back-of-the-napkin calculation could look something like this:
This year I sold $100,000 worth of stuff via promotions I ran to my email list
That amount came from 250 transactions
...And a total of 200 unique customers
Therefore, each of those customers paid, on average, $500
Those customers came from email campaigns, and 10,000 people received my emails in the last year
(quick division....) 2% of those 10,000 have bought from me, which means a subscriber is worth $10
By working backward from your sales, you can pretty easily quantify the ROI of email marketing – assuming, of course, most of these sales came from email campaigns.
And while this doesn't take into account how many people opened the emails (a flawed metric) or unsubscribe rates or whatever else, it gives you a good number to work with.
(As an aside, this is why I find it a bit funny when people ask about whether their email list is big enough, or their clicks (and, presumably, sales page views) are high enough, etc.
Because the very first freelance job I ever took as a novice web developer was for a yacht dealer in South Florida. Their goal was to sell one yacht a year and make $10m+ in commission. They didn't care about high traffic or high lead volume. They just needed one customer.)
Start by figuring out your average value per subscriber, and then...
Recommendation #1: Timebox it
While it's great to compute your overall average subscriber value, it's not immediately practical.
What is, however, is when you timebox the value of a new subscriber during an initial onboarding -> pitch automation.
The idea is that rather than just getting someone onto your list or sending them a PDF lead magnet, you instead have a sequence designed to "create customers" – you find out about what they're struggling with, deliver a personalized email course that introduces them to you and the topic your paid thing solves.
Once this sequence is delivered, you look at how engaged they are and determine how long of a fuse to light before they're pitched on your paid thing.
After that fuse cord runs out, you then open up an automated pitch sequence that positions your product/service specifically against the need they shared with you when they first joined.
Anyway, the beauty of the above is that it typically runs start-to-finish in less than a month.
This means that you can eventually come up with a new back-of-the-napkin formula. This one will look at the total number of new people who joined your LBPS within the period of, say, a month, how many bought, and how much total revenue that drove.
Want to know why this is really, really useful to do?
Imagine you want to start running ads for your LBPS.
The formula above spits out that a subscriber is worth $8 within 30 days.
If you can get new opt-ins for under $8, this means you're capturing at least $8 in value for every new subscriber before the credit card bill is due.
And this means that you can then safely run potentially pricey ad campaigns if the math checks out. And if it doesn't, figure out how to tweak your formula's funnel to increase ad click -> subscriber rates, pitch -> purchase, and so on.
Even if you were to break even in acquisition, you're basically building your list for free and anytime you do pitches beyond that LBPS sequence you know that you've already paid off the "cost" of emailing those subscribers.
Recommendation #2: Segment your numbers
If you've joined my email list, do you remember the questions that I asked you when you joined this list?
Overall, a whopping 93% of subscribers answered at least one of the questions.
And if you answered one of more of my survey questions, that data is now associated with your record in my ConvertKit account.
When someone on my list goes to buy Mastering ConvertKit, for example, I'm able to associate the segmentation data I have about the buyer with the purchase details.
Allowing me to run reports like the following (this is for one of my courses for freelancers):
This goes beyond just telling you a big picture conversion rate.
Instead, I can see how particular types of people, who have different self-proclaimed needs, convert relative to each other.
This allows me to focus my acquisition efforts: based on the above, it doesn't make nearly as much sense to do a guest post on a site targeting writes vs. a blog for freelance marketers.
But it also gives me visibility into where I might be falling short: why am I losing writers? Are they just not into buying courses? Or am I losing them somehow?
Only after being able to segment your audience down this way does it become possible to answer the above.