An email address can be a wonderful thing to your business, that is if you treat it right. Misused and any message you want to send could end up in the trash or worse yet, with a big fat unsubscribe and really even worse a complaint about your abuse! But let’s not talk about those icky things. Did you ever wonder how valuable an email address is?

We looked around and found a very cool way to look at how you might value an email address that’s SUPER geeky. Seems like this Erik Severinghaus founder & CEO of SimpleRelevance, has an interesting idea about how to assess it.

He chose to model email addresses like bankers model the value of a financial asset. So for each email send here is what Erik suggests tracking:

Open Rate: annotated as ‘O’ (For this example let’s say 20%)
Click Rate: annotated as ‘C’ (For this example let’s say 2%)
Purchase Rate: annotated as ‘P’ (For this example let’s say 10%)
Total Revenue Generated: annotated as ‘TR’ (For this example $5000 in revenue from this email)
Profit Margin from Revenue: ‘PM’ (For this example we’re getting $2000 in profit)
Unsubscribe Rate: annotated as ‘U’ (Most businesses have a .6% unsubscribe rate per email)

Then:

O x C x P x TR x PM = Pc (Profit contribution per email)

20% x 2% x 10% x $5000 x $2000 x .6% = $24*

*Note: this doesn’t include what is COSTS you to get that email address.

So from this particular email, you can expect to lose $24 from everyone who unsubscribes. All of this suggests that you want to segment your lists and offer great content so that you keep your precious subscribers happy, and buying.