Create predictability in your business
business, you need to have predictable growth channels. If you mobile database don’t know how much an email subscriber is worth, you can’t create the predictability needed to invest in email as a channel.
Determine the true ROI of your email list building efforts
If you don’t know how much an email is worth, it’s impossible to determine the ROI of marketing efforts specifically designed to increase your email subscribers.
Determine the real ROI of other channels more accurately
One of the dangers of e-commerce marketing is that you steps to build and maintain turn off channels that are actually profitable but you don’t realize they are. For example, you might try Facebook ads , and those tests will show that your ROAS is not high enough. A lot of people might come to your website, but too few people might make a purchase. For this reason, you might turn off Facebook ads.
But, what you don’t realize is that people love your fresh list store but aren’t ready to buy right now. So, they add their name to your email list. If you don’t know how valuable your email subscribers are, you might not take them into account when buying Facebook ads and turn off your campaigns prematurely.
Suppose Jim spends $50 for each flower he sells for $1.00.
This means that the best equation Jim can use is:
(Monthly email revenue as a channel divided by number of email subscribers) * Gross profit = Monthly net revenue per email subscriber.