The value of an e-mail address

Today there was an interesting bit on the E-mail Marketing Roundtable list about calculating the value of an e-mail address from a fellow named Jay Allen. Here’s what he had to say:

To start, we calculate the value of an email by the projected
contribution it gives us in a one-year timeframe:

[(total $ contribution from emails in a year)/(total # of emails sent in
a year)] * (# of emails you expect to send in a year) = value of one
email address

It got me thinking about whether it is worth trying to determine the value of our e-mail addresses. We use e-mail to market to people, but also to support communication (be it getting people to participate in a survey or usability study) or to enable sales staff to converse with members in the manner best suited to their needs and lifestyle.

The factors at play with e-mail from my point-of-view are:

• the number of people who open the e-mail
• the number of people who act on the e-mail and the value of the business (one-time and lifetime) that this provided
• the value the communication (and frequency of communication) provides from a brand perspective
• the cost savings associated with using this delivery channel over others (think print vs. electronic costs)
• the number of people who open/read/act on an e-mail and end up face-to-face with a person

I’m not sure how I move this into a formula/index/measurement/KPI or if it’s a calculation that really has value. Anyone want to take a crack at it? Something I should consider adding?