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Question: What is "list churn"?
Answer: List churn is the amount of turnover on your email list, measured by the number of subscribers lost to hard bounces, unsubscribes or spam complaints. On average, about 20 percent to 30 percent of your mailing list turns over every year.
Inactive subscribers – those who no longer open or click on your email messages -- also contribute to list churn, although inactivity is harder to measure.
Q. How does list churn affect an email marketing program?
A. List churn reduces your email list's response rate and your email program's performance because you have lost potential opens, clicks and conversions.
Furthermore, list churn can hurt your deliverability, especially if you don't remove invalid addresses immediately. ISPs might block or filter your messages if you deliver repeatedly to dormant or closed accounts or if active accountholders don't open or click on your messages.
List churn also diverts more of your marketing budget to acquisition because you must spend more not just to replace the email addresses lost to churn but also to meet list-growth goals.
Q. What causes email list churn?
A. List churn has multiple drivers:
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Relevance: email content doesn't meet expectations, match interests or look trustworthy.
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Frequency: email messages are sent too often, not often enough or too long after opt-in.
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List Quality: email addresses come from lower-quality sources such as co-registration and email append.
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Opt-in Process: email addresses are acquired with low or no permission.
Q. How can I reduce email list churn?
A. Three simple strategies can reduce the number of email addresses lost to churn and fatigue:
Use a clear, easy opt-in process. Never add an email address unless the owner has actively requested it. Switch to double opt-in to reduce hard bounces due to misspelled or incorrectly formatted email addresses. Honor unsubscribes immediately and test your processes often to be sure links work correctly.
An email preference center gives your subscribers the tools to adjust content, frequency and format, and to update their profiles easily instead of merely unsubscribing. You can also use these preferences to segment your email list and increase the relevance of your message content.
Set expectations at the point of opt-in for content and frequency, and stick to them. Resist the urge to send more often than you promised or to send irrelevant email messages.
Explain your privacy policy in plain language, not legalese. State it briefly at opt-in, and link to the page outlining your full policy.
Q. How can I calculate how many new email subscriptions I need to overcome list churn and achieve list growth?
A. First, calculate your monthly or annual email list churn rate:
1) Add up your hard bounces, unsubscribes and spam complaints for either one month or one year. Then divide the total number of lost subscribers by your current list size to find your churn rate. For example:
2,000 lost subscribers / 10,000 current list size = 0.2 x 100 = 20% list churn rate
You're losing 20 percent of your email subscribers annually to list churn.
2) Calculate your annual list hurdle rate: the number of new subscribers you must add in order to achieve email list growth, taking list churn into account.
For example: You have a list of 10,000 email subscribers. You would like to grow your list by 50 percent to increase it to 15,000. However, you lose 20 percent of your subscribers every year to churn. Your list hurdle rate is 70 percent of your current list size. Here's how the math breaks down:
a) 10,000 current list size - 2,000 lost subscribers = 8,000 net subscribers
b) 15,000 goal list size - 8,000 net subscribers = 7,000 list growth
c) 7,000 list growth / 10,000 current list size = 0.7 x 100 = 70% list hurdle rate
Therefore, to reach your 15,000-subscriber goal, you would have to add 7,000 new email subscribers to that base of 8,000 remaining subscribers.
To achieve real email list growth, however, you also should send reengagement campaigns to inactive subscribers. Otherwise, you will have to acquire twice as many new subscribers, or more, to compensate for inactives.
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About the Author
Cathi Mason is director of marketing programs for Lyris. Her team is responsible for executing programs that deliver quality leads to the sales team.
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