We hear a lot about optimising newsletters, what types work best and how to grow your list of subscribers. Of course, everyone wants to keep growing their newsletter, as each new subscriber is a new opportunity to make a customer, and can possibly also be a means of recommending your newsletter content to others (if it’s good enough).
But how do you know when you’ve reached a number of subscribers that’s good for your business? What’s the minimum size you should be looking for?
Unsurprisingly, there isn’t a single answer to this question. What’s good for a local garden centre would probably just represent an immeasurable blip for a multinational organisation.
And if you’re in a very narrow niche business, it’s likely that a good size will be much smaller than a more general retailer, as your readers will already be invested in your products and services.
Cost and benefit
It all comes down to a basic cost/benefit analysis.
On the cost side, you have how much you are spending on creating and managing your newsletter, and how much time and money you are devoting to growing it.
On the benefit side, you are working out how much income your newsletter is directly or indirectly responsible for.
That is, when you send out an email, what is the average return you get from direct clicks to products you’re promoting, but also how many of your customers are choosing you because of the fact that you’ve planted seed in their brains over the course of weeks or months, making you their first option when they need products or services that you sell.
The first is easily found through using proper analytics techniques throughout your newsletter, landing pages and checkouts. The second generally requires a little more intuition, i.e. measuring sales pre- and post-newsletter, and gauging the effect indirectly.
You should set yourself a certain subscriber goal to start with. Knowing when to stop or slow down is important, as chasing new subscribers can be costly and time-consuming.
However, the more subscribers you have, the better will be your analytics. As any statistician will tell you, sample size matters, and the larger your pool of statistical contributors, the more accurate will be your analysis, and the more effective will be your responses.
It’s not unusual to have open rates of around 20%, and conversion rates of around 1% or 2%. If you’ve only got 100 subscribers, then clearly you won’t have the spread of experiences to gauge the best times, days of the week, subjects, frequency and so on that need measuring.
With all this considered, we’d say that you should aim in the first instance to get your newsletter to 1,000 subscribers, through organic and paid marketing, before toning it down a bit.
You’ll have enough data to start zooming in on individual habits, and you can use this data to further optimise your content, and decide on a marketing budget.
After that, it all comes down to your cost/benefit calculations. You can start to work out how much you are spending on each newsletter, and what each one is repaying.
If it’s breaking even or losing, it’s worth having a little subscriber push to bring it up, but if it’s growing nicely on its own, you can just let it continue growing.
Whether that inflection point comes at 5,000, 10,000 or a million subscribers depends on how profitable are your products compared with the average conversion rate.