What's the Worth of Your Email List?
Your beneficiaries want to know.
I mentioned email lists in an article this past week and how they become an asset if you monetize those lists. You can make money from email lists, and I'll cover those options here as well as ways you can obtain email lists that are specific to your brand or to your marketing. Yeah, no. You don’t have to buy them.
I'll also let you in on how the IRS views your income from these lists and what can be done with your lists if you pass on. You know. To that other side.
Keep That List to Yourself
When you decide you're going to make money from an email list, it's important to be ethical and to provide value to your subscribers. If you spam your subscribers or if you try to sell them products they don't want, you lose trust and subscriptions. If you sell your lists to other businesses, you'll lose the impact you have on your lists and you're also risking your reputation.
There are a few disadvantages of selling out your email list:
You could lose the trust of your subscribers. When you sell your email list, you are essentially giving away the contact information of your subscribers to someone else. This means that your subscribers may not feel comfortable trusting you anymore.
You could damage your reputation. If people find out you sell your email lists, they may think you're not trustworthy. While all news is marketing news, this type of news could damage your reputation and make it difficult to attract new customers in the near future.
You may be violating the law. In some countries, it is illegal to sell or rent email lists without the subscribers' consent. If you are caught violating the law, you could face serious penalties, including fines and jail time.
There are other ways to monetize email lists, and they include:
Affiliate marketing: Promote affiliate products or services to the people on your email list. You can earn commissions for any sales you generate through that link in your email. Provide these individuals, who trust you, with tools and services that fit their interests.
Sell your own products or services: You can sell your own products or services through your email list. This is a great way to build a relationship with your subscribers and to generate recurring revenue. Point them to your social media content or straight to a funnel. Be sure you're clear about where you are sending them and why. This makes sense if you want to make sales.
Sell advertising space: You can sell advertising space on your emails to your email list. This is a great way to generate passive income. Make sure the advertising is a fit with your enterprise, or it may not make sense to your readers.
Donations: You can also ask your subscribers to donate to your cause. Again, make sure your cause is a good fit with your business. For instance, you can donate to a nonprofit homeless organization, but tie it back in to what you do (perhaps ideal for real estate or home construction).
Photo by Solen Feyissa on Unsplash
Email Lists as Investments
It's important to remember that email marketing is a long-term strategy, much like investing in any other property. It takes time to build a large and engaged email list. But if you're patient and you provide value to your subscribers, you can eventually make a profit from that list.
The adage is that you can make $1.00 per month off each person on your list. If you have a list of 1,000 subscribers, that's an easy $1k per month. If your list is larger, you can do the math.
Build That List Brick by Brick
If you want to build an email list populated by people who are interested in your niche, product, or service, you can use the following ideas. I’ve used Substack as an example, because you all are familiar with, or heard about, this publication or you wouldn’t be here.
Decide what you want to offer. What kind of content or value will you give to your future subscribers in exchange for that email address? This item of exchange is called a "lead magnet" such as a book, a chart, or some other item that entices the reader to sign up. With Substack, writers offer their expertise, knowledge, and information within this format through regular articles. If a person finds an interest and wants to learn more, that reader offers up an email address to read the articles.
Create a landing page. This is a page on your website where people can sign up for your email list. For Substack, for instance, it’s the page where readers land before they can read an article that interests them.
Promote your landing page. Share your landing page on social media, in your blog posts, and in any other way that you can reach your target audience. Substack might do some of that for you, but you are your own boss here if you’re the writer. You can also offer readers “share” buttons so they can help you market your information.
When you build an email list filled with people who are interested in your topic, this list becomes what is known as the “opt-in” email list. The opt-in email list is the best tool in your marketing toolbox, because it's filled with people who may want to hear your offer or multiple offers — but only if they apply to the subject at hand. Once you've developed a list, treat the individuals on that list as though they were your family and friends (until proven otherwise if the reader starts spamming the writer).
With this attitude, you can send regular and consistent emails to your subscribers. Keep them relevant and interesting. Add some humor if it's appropriate.
Personalize those emails by using the names of your subscribers and address them directly in your emails. (More about personalization in a moment.)
Track your results. Keep an eye on how many people are signing up for your email list, how often they are opening and clicking on your emails, and how much revenue you are generating from your email list.
You can track the people who opened your email with either an email tracking application/tool, or by requesting a read/open receipt. This receipt is common with most email clients. You also can track clicks on your link at the affiliate link dashboard.
HubSpot often has the best marketing tools for beginners (and reminders for pros). Visit their page about Email Personalization: 23 of the Best Personalized Email Examples, and you'll find a link for a download. That download addresses a beginner's approach to email marketing, and it's free. You can learn more about personalization tools through that publication.
The IRS Loves Your Profits
You may not have 1,000 people on your list, or you may have thousands of people signed up to several lists that you've managed to partition over the years to fit various email strategies. Remember back when I said that each email can represent $1.00 per month? That's the calculation for marketers for their email lists currently, but that may not reflect true worth. Other calculations may say your list is worth even more.
The IRS doesn't care about valuation theories, though. They do care about the income you realize through email marketing. If you do manage to sell $1k of product or service each month to the individuals on those lists, the IRS wants their cut. This money is earned income (profit), and you report it on Schedule C: Profit or Loss from Business when you report your income for the year.
This link for the instructions for IRS Schedule C is for 2022. Count on it not being valid for 2023. No better place to learn about taxes than straight from the source, so check out the links to the left on that page when you have a little time on your hands. The more you know, the more you can plan.
Most seasoned entrepreneurs understand the tax repercussions that accompany money earned through a “side hustle.” I’ve learned that many newbies to this territory don’t understand, nor do they seem to want to know. That’s a dangerous path to walk, because tax time is in spring, when snakes emerge from hibernation.
You may or may not have an accountant yet, but you will need one if you are wildly or even moderately successful with your side gig. Moderately successful means making money. Any money, including money under that famed “$600 ceiling.”
Entrepreneurs usually are not business owners. They’re the people who make all the mistakes so business owners can learn from them. This is why entrepreneurs quickly turn into business owners if they do make any money, because they’ve already made all the mistakes and they want to deduct their expenses.
So yes. Oy. Accountant, please. Additionally, keep the best records you’ve ever kept in your life, from income to expenses.
In The End
And, in the end when you're no longer gracing us with your presence, what happens to your email lists? If you know that you don't want to continue your business before you die, you can sell those lists along with your business. Those lists are a value-added necessity, much like the roster of customers who visit a bricks-and-mortar.
If your want your business to remain up and running when you pass, or if that’s the situation whether you wanted it or not, you might want to state your wishes for your beneficiaries in advance if possible. An estate attorney is a good investment, as your business can continue within that estate (think trust) upon your death if you are the owner. If you are operating as an entrepreneur, the same plan can work for you, especially if your beneficiary wants to continue your work.
Your estate executor is in charge of your estate when you pass. It might be a wise idea if they understand digital assets. Although you can't worry about anything once you're gone, the point is to make things easier for those you leave behind.
Finally, those email lists can disappear along with you. Over time and with neglect, lists are no longer viable, and they lose value incrementally. One way to calculate the value of a list:
Multiply the average customer lifetime value per subscriber by the current number of subscribers in your mailing list, you'll obtain the current value of your mailing list. You may discover, with this practice, that your customers are worth far more than you realized.
Niche Pursuits also offers some advice on how to value your lists. This advice is ideal for the business owner or entrepreneur who wants to know the true value of that list, and it may open new doors for revenue. This value can, like any investment, fluctuate, so stay on top of keeping that list clean for the most impact.