Few would argue that customers who opt-in for marketing emails have a higher lifetime value. In a recent client analysis, we found that the attrition rate for opt-in customers was a whopping 40 ppts less than for those not opt’ed in for email. Direct communication with a customer is still something that email marketing does better than any other communication channel. And an email address is a key data field in being able to connect a customer’s online & offline profiles. Yet the relatively cheap marketing cost of sending an email continues to clog our inboxes with a daily barrage of messages that are nothing more than mass marketing pitches.
What’s The Value Of An Email Address?
Every email address in a CRM database is worth money, and the email address of engaged customers is worth even more money. Knowing how much each email address is worth is critical to creating broad organizational awareness that can protect one of the company’s most important assets. Here’s a simple example: Let’s say an analysis shows that every email address is worth $50. Store management is going to have an easier time prioritizing email capture if an email collection campaign can net 20,000 new email addresses, or $1,000,000 in additional company value. For a 50 store retail chain, that’s only 400 email addresses per store.
For marketers, the difference between an engaged email address and a non-engaged email address should also be quantified and used to guide contact strategies. Importantly, this value difference can help combat excessive communication frequency by being able to quantify the negative value impact of email addresses going dormant. In financial terms, the effect is simulated by essentially creating a balance sheet asset that either increases in value – through file additions and more engagement – or decreases in value through opt-outs and lack of response. Communication decisions need to be made with these types of asset implications in mind.
This concept can be applied to other channels as well. How much more valuable are customers who use your app? Those who follow you on social media? Who take the time to engage with you on social media? By understanding how a customer’s value increases with each channel, you understand just how valuable that customer connection is. This allows you to focus your efforts in the digital spaces that have the most value to you (and your customers), and helps you measure your timing and cadence to ensure you’re adding value, rather than diminishing it.
An Important Link Between Online And Offline Customer Profiles
As more marketing efforts move to digital channels, tracking a customer in both their offline and online data profiles is increasingly important – and a valid email address creates a critical linkage. Want to know how well your digital ads are driving in-store traffic? An email address will greatly increase the probability that your customer records can be matched by a data onboarder (ie. LiveRamp). In this way, the value proposition of your email program – the reason customers provide their email – becomes critical to being able to analyze the impact of your digital ad spend.
The importance of collecting customer email addresses has never been higher. Growing and protecting the email database requires that the value be quantified and broadly communicated.