People talk about list size all the time. The myth out there is the bigger list – the bigger the revenue. As we know, that’s really not the case. A smaller and more authentic list can yield massive revenues than a much larger and less responsive list. It all comes down to the value you provide to your list and in return the monetary value (in terms of sales) yielded back to you.
So, the question is: how best can I measure the value of my list?
That stands for Dollar Value Per Subscriber Per Month. And take it from me – it’s a magical number. It’s actually one of the most important benchmarks I personally use to track the responsiveness and monetization of a list.
Here’s how it works:
Take your revenues. This is total revenue (not income; don’t subtract expenses) for a given period. I like to track this by month but you can retroactively go back and track for an annual period (say for all of 2010) for EACH month.
Take your list size. This is total size of your list you send for email marketing. Again, it’s best to track this by month and you can easily search in your email marketing system by a date created field to get a total number of subscribers for a GIVEN month (say for each month of 2010).
Take your revenues and DIVIDE it by your list size. Example:
April 2011 Revenues $10,000.
April 2011 list size 2,500
= $4 Dollar Value Per Subscriber for April 2011
Now, what’s real interesting is looking at that benchmark over time for different months. If your list is growing in size – are your revenues growing accordingly? The idea is that as you grow your list – you grow your sales (more people on the list to buy). But, your marketing efforts and the responsiveness of your list to your offers needs to stay in line. Your list gets too stale (not growing the list) and revenues increase – the dollar value per subscriber diminishes. Your list grows really quickly (through JV’s or other list building strategies) and your revenues decrease – same result. However, if you increase your list AND increase your revenues steadily each and every month – LIST MONETIZATION NIRVANA.
The goal is this: always focus on having an increasing number month to month. That means in a nutshell your list size is increasing AND your revenues are increasing.
What’s a benchmark to start with? I’ve heard in the true Internet Marketing space that $1 DVPSPM is a good benchmark. Anything around the $10 mark is golden – so let’s shoot for that. Remember, the more authentic and “value creation” list you have – will yield a bigger payday.
Until Next Time… Learn It, Love It, Live It!