How much is a newsletter subscriber really worth?

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Operating a newsletter business without understanding your subscriber lifetime value (SLV) is like flying a plane while wearing a blindfold and noise-canceling headphones.

Your newsletter’s SLV serves as an instant “reality check” for how well your newsletter business is performing in general.

And — without having a ballpark idea of your newsletter’s SLV — it’s impossible to make key decisions that’ll define its growth. Like how much to invest into audience acquisition. Or whether it’s time to add new revenue channels to your newsletter.

So — considering just how much upside a good understanding of your SLV can unlock for your newsletter — it’s amazing how few operators know their newsletter’s SLV.

In a 2021 SparkLoop survey, we asked 1000+ newsletter operators and media brands if they had a good understanding of their subscriber lifetime value...

• only 9% were very confident they had a good estimate
• with more than two-thirds of respondents choosing “not really” or even “not at all”!

If you want your newsletter to outperform the “average”, you need to understand your SLV. So we created this short guide and free calculator to help you figure it out in minutes.

Let’s jump in…

What is a newsletter’s subscriber lifetime value (SLV)?

Let’s start with the basics.

Imagine a new (free) subscriber signs up to your newsletter. They stay subscribed for maybe 12 months, before unsubscribing.

During those 12 months, they might…

• click on affiliate links
• buy your products
• see advertising in your newsletter
• or upgrade to a paid newsletter of yours

Simply put, the lifetime value of that subscriber is the sum of all the different ways your business made money from them while they were subscribed (ie for the “lifetime” of their subscription).

Now, knowing the lifetime value of any one subscriber isn’t very useful.

Different subscribers will have different lifetime values. Based on things like how long they stay subscribed to your newsletter and what purchases they make.

Instead, when we talk about subscriber lifetime value, we’re really talking about the “average” lifetime value of your newsletter’s subscribers.

In other words, we’re trying to answer this key question:

If I acquire a new free newsletter subscriber today, how much revenue will they generate for my business in the future?

Why is knowing my newsletter’s subscriber lifetime revenue so important?

Media brand CEOs love to track their newsletters’ SLVs because it gives them an instant pulse on how effectively they are monetising their audience. Both compared to other media companies, and to themselves over time.

It’s especially important to understand your newsletter’s SLV if you’re responsible for the growth and development of your newsletter…

If you don’t have at least an estimate for the lifetime value of a new subscriber, how are you supposed to make good decisions on how much to invest into acquiring new subscribers in the first place?

To make matters worse, most newsletter operators drastically underestimate their SLV.

For example, at SparkLoop we’ll often meet newsletter operators with an SLV of $15+ — but who are worried to spend more than $1-2 per new subscriber on audience growth.

By better understanding their “real” SLV, these operators could profitably invest much more into audience growth, much earlier. And would — in most cases — likely be running 5-10x larger (and more valuable) newsletter businesses already.

Even if your newsletter is in the early stages and you haven’t even started monetising properly yet, you should be calculating (or estimating) your future SLV at least once per quarter.

How can I calculate my newsletter’s subscriber lifetime value?

When we look at a newsletter’s SLV, we’re making a prediction for the future:

How much revenue will an average new subscriber acquired today generate over the lifetime of their subscription?

So we’ll never get it 100% right. And we can’t rely on historical data alone — the revenue potential you’ll have six months from now will likely be very different to those you had even just one year ago.

Large media companies will invest weeks of work into modelling out their newsletter SLV. Based on a cohort analysis of existing subscriber data, mixed with predictions for future revenue trends.

For most newsletter operators — even smaller media brands with six-figure email audiences — this probably isn’t an efficient use of time.

Instead, you can use the calculator we’ve created (below) to calculate a ballpark prediction of your newsletter SLV in just a few minutes.

Will it be perfect? No. But it should be reliable enough to use as a basis for audience growth investment. And infinitely better than having no idea of your SLV at all.

Subscriber Lifetime Value Calculator

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How good (or bad) is my newsletter’s subscriber lifetime value?

There’s no “good or bad” newsletter SLV. It depends on many factors, such as:

• your industry
• your business model
• your revenue streams
• how long your newsletter has existed
• your business goals

And more.

In general, the higher your newsletter SLV, the better your business is performing.

When you use the calculator (above) to predict your own newsletter SLV, one of the results you’ll receive is a ballpark comparison to other, similar newsletters. This data is based on a 2021 SparkLoop survey of 1000+ newsletter operators and media brands.

As a very rough guide, you can expect:

• a niche, consumer newsletter to have an SLV of $10-20/sub
• a niche, B2B newsletter to have an SLV of $15-25/sub
• a broad-appeal/news newsletter to have an SLV of $8-15/sub
• a personal (or personality-driven) newsletter to have an SLV of $3-10/sub

The different revenue channels a newsletter may have will affect the SLV ranges given above significantly though. In particular, newsletters with multiple revenue sources that include direct sales of products or services to their audience may have an SLV several times higher than the ranges shown above.

It’s common for newsletters with info-products such as courses to have an SLV of $30-50, for example.

I’ve calculated my newsletter SLV… what now?

Understanding your SLV is the first step to growing your newsletter business. But it is only the first step.

The SLV you’ve calculated is what’s called a “blended” SLV: An average lifetime value of all new subscribers, no matter how they were acquired.

The challenge here is that all new subscribers weren’t created equally.

A new subscriber acquired via Facebook ads or sweepstakes, for example, is much less likely to stay subscribed to your newsletter, purchase your products or click on ads. So they’ll almost certainly have a significantly lower SLV than average.

New subscribers acquired via channels like referrals and cross-promotions, on the other hand, are proven to be more likely to be engaged. And will thus have a much higher SLV than average.

In many cases, the differences here can be huge: For newsletter operators using SparkLoop, the average new subscriber acquired via referrals has an almost 1.5x higher SLV than an “organic” subscriber. And up to 3-5x higher than a subscriber acquired via social advertising or sweepstakes!

The big picture?

Before investing into newsletter growth, you should work out the SLV for each major audience acquisition channel you’re looking to invest into.

If the SLV of a subscriber acquired via your referral program is $30, whereas for those acquired via Facebook ads it’s more like $10, then you have a much better idea of how much you should be spending on each channel.

How can I improve my newsletter subscriber lifetime value?

Big picture, there are two levers you can pull to improve your newsletter SLV:

By finding acquisition channels of new subscribers who are more likely to be engaged and drive revenue for your business
By finding ways to improve existing revenue channels and add new ones

For help with the first lever — finding ways to acquire more, high-quality subscribers — it’s definitely worth booking in a call with one of our email growth strategists. The fastest growing media brands and newsletters use our referral and partner program software to unlock predictable, high quality audience growth.

If adding new, effective revenue channels to your newsletter is the priority, take a look at our Partner Network where you can increase the SLV of each new subscriber by $2-5 on average by recommending other, great newsletters.