So, that someone@something.com- what’s it really worth?

Well in a whirlwind first fortnight in the Citrus team, with my eyes wide to new faces and fun, there was an old familiar favourite of a question that popped up in conversation with a client this week…

How much is my email database actually worth?    

Well, resisting the instant quip of it’s not what you’ve got, it’s what you do with it (although in it’s cleanest sense is actually true), I turned my mind to the options of a slightly more scientific solution.   

A lifetime value calculation is at the core of the answer to this question, which looks at your online conversion frequency and value, less your costs of sales and cost of marketing, sounds easy right? Well, it should be, but all too often we don’t have all the information we need, and finding the perfect number to hang your hat on can be difficult – but this does not mean we shouldn’t try.  

Firstly, it’s hard to know who counts as a live customer in your database, so therefore, who to count as ‘valuable’ – the truth is everyone has had some cost to you to acquire, so count everyone, or if you prefer, look at your long term inactives as dead data because it’s been around before time (or maybe your conversion tracking) began – but don’t let it stop you, just make a decision of how you will calculate it and stick to it.  

Secondly, your data may not be perfect, or even complete, but start by basing it on what you have now, and make assumptions, just be clear (and honest), about the assumptions you’re making, and tighten up your calculations over time, and work towards fixing the data gaps you‘ve got, you’ll only get closer, and in this numbers game, I’ll bet a well aimed off target shot is better than no shot at all.  

Thirdly, there’s all the other communication benefits rippling out from your email programmes into and across your other channels, calculating this requires some large assumptions and often serious guesswork, but more than likely, no one will be able to guess it better than you and your marketing team, so ask the question, start the debate and resolve to put a number on your guess. Plus, once you draw people’s attention to it as an unknown and you should only get more information thrown at you to make your guess more accurate.  

It’s not easy, but it’s worth while, because once you know how much they’re worth, then you know how much to spend on acquiring more, and that’s the kind of reasoning the budget holders love!