well-funded e-commerce companies. They can afford accurate cleaned numbers list from frist database to spend money to acquire email subscribers and customers and they don’t need to have a positive ROI on that subscriber/customer for a long time.
But if you are self-funded, you will need to get paid back much faster. There is no exact rule of thumb, but let’s say it is 3 months if you are self-funded and 7 months if you have a venture investment.
This means that Jim should be able to afford to acquire an email subscriber for $4.50 if his business is self-funded and for $10.50 if it is funded.
The story gets better with email marketing for ecommerce once you know the value of each email subscriber
Ok, let’s say Jim’s company is self-funded. That means he can afford $4.50 to acquire an email subscriber. However, that’s only part of the story.
Let’s say Jim is able to buy traffic at $1.00 per click. This types of receipts freelancers should keep means he would need 1 in 4.5 visitors to sign up for his email list. This is very high and probably not possible. However, this should also be added to completed purchases.
Let’s also assume that Jim spends $100.
And let’s say Jim gets 8 email signups from the 100 visitors that come to his site.
8 x 3 months x $1.50 = $36.
But 2 people also purchased flowers from those fresh list 100 visitors for an average of $100 per order.
If Jim doesn’t consider the value of the email subscribers he gets, Jim will calculate that he has sold two orders. At $50 per order after the cost of goods, this means that Jim has spent $100 to earn $100. Therefore, Jim decides to stop this marketing effort.