How To Determine How Much You Can Spend To Acquire

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On the simplest level, it seems you can spend $1.50 to acquire an email subscriber for your email ecommerce efforts. This would make sense but is missing something. It’s missing:

1) How long your email subscribers stay on your list;

2) How quickly you need to get paid back.

Let’s start with the first one..how long do your email subscribers india telegram phone number list stay on your list? Some of your email subscribers will churn. This is because some people will unsubscribe and others may cancel their email altogether. Therefore, it’s important to understand how many people fall off your email list every month.

Let’s say that 5 percent of your email subscribers fall off each month.

That means that, all of your subscribers will fall off in 20 months.

Therefore, the LTV of your email subscribers can be estimated at $1.50 per email subscriber x 20 months = $30.

But, most companies can’t sit around for 20 months waiting to recoup their marketing spend. So, you need to define how quickly you get paid back. There are a variety of factors in considering this. But, the biggest factor is – if you have plenty of cash, you can afford a longer period than if you have very little cash.

This is the secret of well funded ecommerce companies. They can afford to spend to acquire email subscribers and customers and not need to be ROI positive on that subscriber/customer for a long time.

But, if you are bootstrapped, you will need to get paid back much faster. There is not an exact rule of thumb, but let’s say it’s 3 months if you are bootstrapped and 7 months if you have venture investment.