Email is still the biggest driver for eCommerce and every marketing team wants the access to the inbox of their customers. In times where everyone gets too many emails, your customers need a very good reason for a subscription.

You might know the common popup on nearly any shop which offers some kind of discount for a confirmed newsletter sign up. Common discounts are 5–10€ — it depends on how badly you want to grow your subscriber list — or free shipping. If you are likely to adopt this for your shop and pay for a subscription, DON’T DO THAT!

I’ve analyzed the reports of 100 newsletters we sent during the last 2 years. It turns out, that getting a discount grew the subscriber list about 40% during year 1 where we were promoting a 5€ discount for a newsletter subscription. In year 2, we did not promote the discount and the growth was only about 15%. This sounds like a good reason for the discount but after this, I had a look at the open rate and ultimately, at the number of clicks and the revenue these newsletters created.

  • The open rate decreased about the same number than our list grew.
  • The absolute number of clicks stayed the same for the whole 2 years.

It turns out that only the customers who registered without a promotion are interested in the content and are converting into repeating customers via our regular newsletters.

This leads to the result that paying your customers for a newsletter subscription only does one thing: Decreasing the revenue for their orders!

Where to go from here?

Using an incentive is not the worst thing you can do, at least it grows your reach. There are quite a few incentives that don’t decrease your revenue that much and which we’re trying now.

  1. We’re going to use small gifts and starting with sweets — they cost about 1/10th of the discount and give you a smile when you open your delivery the first time. As we’re also selling them, we can add samples to orders and are likely to get a new order if the customer likes them.
  2. Provide digital content and quickly send this out after the subscription has been confirmed. In our case, we’re selling cookbooks and can provide sample recipes with video tutorials. This is also likely to create the need for one of the cookbooks.

My takeaway from this analysis is that paying customers for a newsletter subscription grows your subscriber list but not your revenue.

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Marcel Pociot, Sebastian Schlein

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