What's A Name Worth To You?

[AskRex]

Looking for individual responses on "What is a name worth to you?" In reference to your email list that you've built up. If someone could revive your email list so they're responding again - or responding at a higher rate - what would each lead be worth to you? $10? $20? $70?

[Tom Lindstrom]

Interesting question.Building up your credibility online to a point where people start listening to you and trust you is priceless I think.

[youbetcha1018]

Originally Posted by Tom Lindstrom

Interesting question.Building up your credibility online to a point where people start listening to you and trust you is priceless I think.

Agreed. You cannot put any price tag on each people that will listen to you.

[Thuva]

If you know the profit you make on your initial product, and the average conversion rate for your email list, then you can find out exactly how much you can afford to spend to get someone on your list. The formula is:

Cost Per Name (Or Lead) = Profit * Conversion Rate

Suppose you make $97 profit on your initial product, and you convert 5% of people who subscribe to your email list into sales, then you can spend $4.85 (97 * 0.05) to get the lead and still break even.

Remember, you can sell more products to customers who've bought your initial product. The conversion rate will be higher. This is where you make all the profits.

[torka]

It's not just the profit from the initial sale, but the lifetime value of the customer that you should be considering.

If you make $5 on the initial sale, but the typical customer generates $20 in profit for you over their "lifetime," then it might be worth it to spend $6 or $7 to get them on your list, when simply analyzing it versus the initial sale would make that seem to be a losing proposition.

Which, if I may be permitted to put words in his mouth, may have been the OP's original point. It isn't necessarily always easy to figure out the "lifetime value" of a customer, but you need to put in the work to at least have some kind of ballpark idea. Otherwise, you risk making poor business decisions (such as thinking spending $5 to acquire a lead is "too expensive" when that lead could have generated $20-$30 in profit for you in the end).

--Torka