How valuable is your email list?
I was speaking at an event in Seattle for NWEN at the Graham and Dunn offices and downstairs is the restaurant formerly know as Waterfront – now Aqua. It’s part of the El Gaucho ownership and like El Gaucho, it’s awesome (and spendy).
We were chatting as a group and one of the wait staff asked if I’d like to join their Revelers Club. “What is the club?” I inquired, knowing it would be an email list and form, and…ta da…it was an email list. But much to my surprise, it came with a $50 gift card. That was a surprise.
But not really. Think about the cost of a promotion and the value of an email list. Today companies are willing to give a company like Groupon a huge premium to send an email to their email list. Here are the economics:
| Daily Deal | Internal | |
| Sale | $100 | $100 |
| Discount | $50 | $50 |
| Promo Cost | $25 | $2 |
| Net Value | $25 | $48 |
Those economics make a $50 gift card sound like a great deal, when you figure the cost of the plastic card and mailing. So what’s the value of an email? For the El Gaucho Group, it’s $50. Now we’ll have to see how well they stay in touch with the list.
3 Comments
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Steve Alexander
Dave,
You are absolutely correct. Customer acquisition and retention is extremely expensive, and clever marketing is key. I know of a company that offered $10 Starbuck gift cards to everyone who simply liked their Facebook page. They received over 20,000 likes (at a cost of $200,000), but it was a bargain for the customer lists they acquired.
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Steven Jacobs
Under utilizing one of the most valuable assets, the existing client base, seems to be problematic for many organizations. Your ROI model is telling but the true value is the life of the customer making the initial invesent of $50.00 reduced to no more than topping off a cup of coffee. How many companies utilize online newsletters that
are extremely inexpensive Not enough. Great insight on your part to not only share your experience but to monetize it as well. By the way, since
I shared my email address in order to join the conversation, when might I expect my gift certificate?certificate?
Bobby Bakshi
Nice Dave! We can always count on you to crank the numbers :). The question is — I wonder to what extent the El Gaucho Group did the same before choosing this offer and measuring the ROI?