Once we know how many subscribers you’ll need to accomplish whatever it is you want to do, then the rest of our list-building plan starts to fall into place.
How many subscribers do you need? It depends on what you want to do.
Not everybody needs the same number of subscribers
If you’re an ecommerce business, you’ll need far more subscribers than if you are consultant or a freelancer. If you want to build an audience to launch a book, or take a shot at crowdfunding your next project, you’ll need quite a few people. Affiliates will need a different number of subscribers, mostly depending on what they’re selling. If you want to earn $10,000 a month and you’re selling a $5 product, you’ll need far more subscribers than if you were selling a $5,000 product.
There are extensive reports of people launching very successful products and businesses with barely 500 subscribers. If you’ve got a super-responsive list and you’re selling a high-ticket item, 500 subscribers can be all you need.
Let’s get specific.
According to Epsilon’s quarterly email trends and benchmark report, the average open rate in the 2nd quarter of 2013 was 28.5%. The average click-through rate was 4.3%.
Those are helpful stats, but consider they vary enormously from one industry to another. Here’s evidence of that, from Epsilon’s own report:
Other factors that determine how many subscribers you’ll need
Let’s pretend you’re in “Retail General”, per Epsilon’s table. If you have an email list of 10,000 subscribers, you’ll get about 500 clicks to your website from every email you send. If your site converts at 2% (which is average), you’ll get 10 orders. According to BigCommerce, “On average, 90% of e-commerce customers spend $54 per order”. That means your 10 orders will be worth about $540. That’s how much you’ll make every time you send an email, assuming your Joe Vanilla average.
Nobody is Joe Vanilla average, but it’s a starting point.
If Joe Vanilla, the ecommerce store owner, wanted to make $10,000 a month from email sales, he’d need to either
– Radically increase his average order size
– Radically increase his open rates
– Radically increase his site’s conversion rate
This is where it starts to get hazy on how many subscribers you need. But if I left out order size, conversion rate and click-through rates, I wouldn’t be giving you the whole story.
Will sending more than one email a week help?
Yes. Joe could also send his emails more frequently. Generally, when you send twice as many emails out, you don’t get twice as many sales. Usually you get 40-70% more sales, but with double the effort of sending out twice as many emails.
Putting all the numbers together
I am about to introduce a formula here. I hope some of you don’t freak out. If you do freak out, remember – this will help you earn more money. This formula is your friend.
How much you want to earn per month = # of subscribers * open rate * average order size * your site’s conversion rate * 4 emails per month
But this is only useful if it gives you specifics. So here’s your calculator:
Where the calculator’s default numbers come from
The default number for click-through rate is from Epsilon’s report. The default conversion rate of 2% is an industry standard. Average order size is BigCommerce’s recent research. You can change any of the these figures – just type in the number you think is more appropriate for your business.
How freelancers and consultants can use this calculator
People who do not sell products can also use this calculator. Say you’re a freelancer. Your average order size is going to be considerably larger than $54… probably more like $500. Your click-through rate may also be considerably higher than what’s in Epsilon’s chart. The click-through rates on my emails hover around 10%, and that’s for “unique” clicks – not one person clicking twice.
With the $500 average order size, a click-through rate of 10%, and a conversion rate of 2%, you’d only need 2,000 subscribers to earn $8,000 a month, and that’s sales directly from your emails – not from any advertising, any networking, or any referral business.
Mailing More than Once a Week
This calculator does not factor in what happens if you decided to mail more than once a week. Some retailers (like Fab) send daily emails. That’s completely fine if you’ve got the content to pull that off, and your subscribers don’t rebel (or they’re at least given the option of getting fewer emails). Remember that sending more than one email a week won’t double or triple your sales, and watch your open, click-through and unsubscribe rates. It’s a difficult, slow process bringing an over-mailed list back to life.