Yesterday, I wrote you some reasons I thought “email list as king” of your marketing efforts should be rethought.
To me, the points were self-evident:
- “email list value decays over time” AKA people change
- market value of email lists is low, more below
- “email lists are cash-in-hand” email lists get stale when you stop sending emails
- “audience interests and your interests inevitably diverge” AKA people change
- “subscriber value goes down as list size goes up”
- “email list activity is synchronous, one to many” AKA a broadcast is a broadcast.
And then Philip was kind enough to share and a few of us had an interesting convo on Twitter.
I’d like to think through this a bit more.
The related point I made before was that the likelihood someone will buy from you rapidly diminishes after the first 30 days. I dug up an old post where I first wrote about the 30 days thing and looked at some similar research that exists around lead response times.
Some interesting thoughts in subtweet from Philip after reviewing sales with an R developer for his The Positioning Manual book, having assumed it was mostly his email list, he uncovered the “vast majority of sales to email list members happened the day they joined the list.” eg. not from the list.
It makes me wonder how many of you who don’t track where revenue comes from are misattributing sales based on instinct or eyeballing it.
A more technical point about “attribution” models later maybe.
The bigger point here. When the lead comes in, it’s piping hot until it cools back to zero.
Think buying a car. Subscribers are in-market one day and then they are not the next. In-market by definition is a temporary state. The forecast for someone in-market is that they will soon be out of market.
This alone makes email lists a depreciating asset.
Websites are valued as businesses. Email lists are valued as data.
Websites are valued like businesses for $$$, email lists are valued as data for ₵.
I don’t make the rules here. It’s the free market. The invisible hand. Whatever. Go shop your list for sale and shop your website for sale.
If your email list is somehow worth more, that does not mean email is better, it is simply a poor health indicator in your business.
Like when your repeat purchase rate is too high – it means you need new business.
Or when your conversion rates are too high – it means you need to sell more frequently.
Or when you have more content than traffic – it means you need to organize it for the benefit of users and dare I say, robots.
This is what the market bears out. I can buy a very up to date email list of the 2 million real estate agents in the US for like $300. Emails are data, data are a commodity that can be sold and resold.
Meanwhile, websites are typically valued as a multiplier of monthly revenue. They are businesses, or at least able to be leveraged as such, and businesses are unique, valuable.
Email list value has a clear upper limit
Rate of growth diminishes over time, that is math. A 50 to 100 email list size increase is 100% growth. A 5k list size to 5,100 is 2% growth.
“All my past customers are on my email list.”
Yes. Retention is better than acquisition, agree. Blah. Email marketing regularly sees the highest effort to returns ratio next to lobbying. Blah.
I’m with you. You should have an email list so you can can optimize customer LTV.
But that is simply a best practice, a box to check, a series of automations to set up, it is not your primary marketing engine.
Once you optimize for LTV of your past customers with email, the room you have to improve on that front crawls to its ceiling. After checking the box of “email marketing best practices” you will be lucky if you can squeeze another 10% or 15% of average customer LTV out of that list. I’m sure you could sell your email list something everyday and bump that to 19%.
Once sufficiently optimized, returns on further optimizing email for LTV diminish rapidly.
Back to attribution modeling, any LTV upside at that point is primarily a function of the source of that initial interaction. That is how you should be thinking of where to spend more energy.
Sure, maybe its word of mouth from your email list. The point is the answer is in where the user came from, e.g. traffic quality, not “I convinced this person who was already convinced enough to have bought from me a first time to buy again because my emails are awesome.”
If you attribute sales purely based on a last interaction attribution model, you will always think your email list is the cat’s meow. But if you’d like to be able to have control over your growth, model attribution based on first interactions – where you first came on their radar.
And while we’re on the subject of reselling things to your list.
Getting money through your email list is hard, awkward, weird
It’s hard to get more money from your list.
If you’ve ever relaunched a product to a list, you know. I don’t need to show you Skype or Slack conversations of teams struggling to grow and maintain the revenue from their email list, or tell you that email relaunches do worse than the initial launch by 30 to 50%.
You can see big names at the top of their game struggle here, trading profit for revenue:
- getting weird with affiliate partnerships
- discounting bigger and more
- using info product bundle marketplaces
- rebranding and repackaging old course material as something shiny and new
It’s weird and awkward to get more money from your list.
You know what I mean. Come on, these are your people. It’s kind of weird, right?
How do you get more sales from your email list? Sell, sell, sell. Subject everyone to niche launches or relaunches irrespective of current interest.
You can do the “convince yourself there is a fair value exchange” all you want, but the way you get good at it is by trying not to think about it.
Your email list is a lagging indicator
Josh Earl walked away from doing profitable work writing opt-in email sequences and email launch sequences for clients. When I saw the email announcement, I was surprised so I hit reply and asked why and this was what he said (shared with permission):
With optin email copywriting I found myself in a dilemma:
If the entrepreneur didn’t have a list, or hadn’t done a good job building the one he had, I couldn’t really help him.
On the other hand, if he did have a good list, he could get good results on his own with pretty simple campaigns.
People are still willing to pay a lot in either scenario, but I didn’t feel good about it.
Ok so if a list is good, the upside potential of intervention isn’t really there and if the list is bad, there’s not much an email marketing pro can do about it. And so now Josh does outbound stuff.
To me this validates an idea, that your email list is a lagging indicator of real business value as opposed to a primary driver of it.
It’s like getting a lot of press.
You can make your life about getting a lot of press, but it probably won’t get you where you want to go. (We have had two clients get featured in the NY Times. Not one lead between them.)
Press is a byproduct of doing cool stuff.
Same with the email list. Your list quality is a function not of your focusing on your email list, it’s a byproduct of all the cool shit you’re doing.
The list size to email value curve is always negative, whilst the website size to value curve can and should be positive
Fifty people on your list – highly targeted, high opens, high conversion rates, etc., yum. Get to 50,000 people on your list and it is no longer targeted, opens have dropped severely, conversion rates are lucky to be single digits.
Meanwhile, the opportunity to increase traffic, improve relevance of traffic to content, personalize ethically based on behavior and interest, and improve subscriptions, conversions, overall sales figures on your website is ever present.
Not that the value doesn’t decrease, Google updates, whatever, seasonal trends… But the opportunity, the potential is unlimited.
A broadcast is just that, a broadcast
Emails to your list are synchronous (real time) one-to-many one-direction conversations. That means you send an email at a point in time and you are having the same conversation with the whole bunch that day.
A caveat – what about email list as building relationships?
In that tweet thread, Michel said, “if there’s any place that you can have 1:1 convos, it’s email. Subs can reply, and more intimate, valuable convos can be had.”
People can reply, and there is value there, intimacy, market understanding, relationship building opportunities, exploring ideas more deeply in those contexts, and those are real benefits.
To me this one is a bit of a wash, the intimacy/privateness of email replies vs the public discussion value where people can reply to anything: website article, tweets, a fb group post, a slack message, your chatbot.
I think there is a case to be made, but I would argue your ability to have many interesting one-to-one conversations is not limited by your website. as much as your time and resources and attention.
Ironically, where email lists wins here on the small list side, they lose as your list grows, and fielding replies becomes a problem, not a benefit. Case in point:
DUE TO VOLUME, PLEASE DO NOT REPLY TO THIS EMAIL. SADLY, WE ARE UNABLE TO READ 1,000+ MESSAGES PER DAY.Tim Ferris’ email footer, at least until I unsubscribed two years ago.
Let’s be real. You’re also still annoyed about that time that someone with that list you’ve been on a long time didn’t answer you back.
Email list as relationship building?
Someone else made a related point that it’s not about the list and selling things to customers it’s about cultivating relationships.
I totally agree. In a way, that is sort of my point.
Email lists are a powerful tool. Offer value, build rapport, “increase your surface area,” strengthen relationships.
My point here is that everyone already agrees on email lists for that.
And yet, the website is a clearly more powerful tool, including being the starting point of your email list.
So why does everyone have a shitty Squarespace looking website and a weird squeeze page lander for a homepage and a dumpster fire of content in the form of a default reverse chronological blog.