One of the most important marketing strategies an author can do is build and utilize their own email list, and one way to do this is to participate in email list builders and list-building giveaways. There are conflicting schools of thought regarding whether these types of book promotions are worth it, so we thought we’d help you out by comparing the cost and return of email list builders.
A healthy and robust email list is an important marketing tool for authors because, as long as you keep a back-up, your list is yours. No other company can take it away from you by closing your account or deleting contacts. Your author email list gives you direct access to your readers without the gatekeeping that retailers do – they keep your readers’ information for themselves, limiting your ability to engage with them. Want to know more about the importance of an author email list? Read here.
What Is an Email List Builder?
An email list builder is a type of book promotion that introduces your book and backlist to potential readers while also garnering their email address to add to your newsletter list. An email list builder helps you grow your list by reaching an audience you may not otherwise have access to and offering them something of value in exchange for their email address. You can do an individual email list builder promotion by creating a reader magnet and running pay-per-click ads on social media and search engines. Hook the targeted audience with an enticing reader magnet and collect their email address, with the hope that they read your other works and become long-term fans.
Another way to build your author email list is through list-building giveaways with other authors. These can be run by a group of authors or by book promotion sites, such as CraveBooks. The group or site offers a nice prize for a giveaway, which is then promoted to readers, who enter by submitting their email address, agreeing to be added to each individual author’s email list. The authors receive the email addresses and then follow up on their own, continuing to build rapport and a relationship. These list-building giveaways work well in reaching new potential readers because each author (and the promotion site, if there is one) promotes the giveaway to their audience and may also do paid advertising.
There can be a drawback to these types of giveaways: Readers who enter may only be seeking freebies and prizes, with no interest in your (or any of the other authors’) books. There will be some loss from the original list. However, that is usually a small percentage, especially if the list-building giveaway is run and promoted strategically. There is still profit to be made.
So should you participate in a list-building giveaway? Let’s look at some numbers. Don’t worry – we’ll go easy on the math.
Comparing the Cost & Return of Email List Builders
To know whether a list-building giveaway is worth it, you do need to be aware of some numbers:
Cost of Participation: If you’re doing a personal email list builder, this would be the cost of the advertisements you’re running. If you’re participating in a list-building giveaway with other authors and/or a book promotion site, this is the cost of signing-up plus any extra advertising you commit to doing.
Your Average Open and Click-Through Rates (CTR): Find this in the statistics area of your email service provider (e.g., MailChimp, MailerLite, ConstantContact). For reference, according to MailChimp, one of the most popular email service providers, for the Media and Publishing sector, the average open rate is 34.23% and average CTR is 4.37%.
Number of New Subscribers: When doing your own email list builder, you can look at previous campaign results, if available, or you may need to wait until your first campaign finishes. For group list-building giveaways, you should be able to get an average or expected number of new subscribers.
Your Average Unsubscribe Rate: All email lists lose subscribers along the way, so this is nothing to be worried or ashamed about unless your number is significantly higher than average (according to MailChimp, that would be 0.09%). For list-building giveaways, we suggest you estimate much higher than average. In fact, expect at least 10% to unsubscribe right away – those people looking only for freebies or to win the prize. After that, retaining subscribers on your list relies on the quality and quantity of your newsletter, which is a whole different blog post.
Your Average Conversion Rate of New Emails to Buyers: In other words, of the total number of emails on your list, how many have actually bought and read any of your books? What is the percentage? If you’re a new author, you may not have any idea what this is, but if you’re established with a few books published and an email list, you may have worked this percentage out.
Your Gross Profit for 1 Book Sale: This is the actual money you earn for one sale of your book, after the retailer takes their share. For a $2.99 book on Amazon at 70% and with a $0.05 download fee, this profit is $2.05. If you have more than one book published, use the book that a new reader will most likely start your catalog with, even if it’s your lowest priced title. You’ll get the most realistic numbers with it.
Your Read-Through Rate and Profit: For authors, profits really start adding up when you have more than one book published, especially if they are related (i.e., in a series). Knowing how many readers continue on with your other books and what the profit is on those can give you an even better understanding of your return-on-investment (ROI) for any book marketing you do.
Let’s work through a simple example to determine if an email list-builder is worth the investment.
We’ll use simplified numbers:
- Cost of Promotion: $50
- Number of New Subscribers: 250
- Average Unsubscribe Rate: 10%
- Average Conversion of New Subscribers to Buyers: 20%
- Gross Profit per Sale: $2.05
- Read-Through Rate: 0 (assuming only one book published)
Let’s break down the math step by step:
- Calculate Retained Subscribers
- Initial Subscribers: 250
- Unsubscribe Rate: 10%
- Retained Subscribers = 250 × (1 – 0.10) = 225 subscribers
- Calculate Cost per Retained Subscriber
- Total Cost ÷ Retained Subscribers
- $50 ÷ 225 = $0.22 per retained subscriber
- Calculate Expected Sales and Profit
- Retained Subscribers × Conversion Rate = Number of Buyers
- 225 × 20% = 45 buyers
- Total Profit = Number of Buyers × Profit per Sale
- 45 × $2.05 = $92.25
Final Analysis:
- Total Investment: $50
- Expected Return: $92.95
- Net Result: $42.25
Of course, in our example, we’ve used 250 new subscribers. The range of new subscribers can vary greatly for each list-building promotion, even with the exact same ads, group of authors, and/or promotion site. As with any book marketing, there are many extenuating factors that influence the final outcome. That said, 250 new subscribers is a pretty conservative average.
Remember, though, that we made all of the above numbers simple. There are several factors that will change those numbers, up or down. If we changed the numbers to worst-case scenario, list-building giveaways remain being worthwhile in these ways:
- Future Value: These subscribers might purchase your next book, making them more valuable over time. This is why knowing your read-through rate can be helpful in fine-tuning your ROI.
- Word-of-Mouth Marketing: Engaged readers often recommend books to friends.
- Review Potential: New readers may leave reviews, helping your book’s visibility.
- Lower Than Average Unsubscribe Rate: If you retain more than 90% of subscribers, the numbers improve significantly.
- Higher Conversion Rate: With engaging welcome sequences and strong reader relationships, you might convert more than 20% to buyers.
The key is to view list-building as a long-term investment. The lifetime value of an engaged reader can far exceed the initial cost of acquisition. This is especially true for authors with multiple books or series, where read-through rates significantly increase the potential return on investment.
What Makes CraveBooks Email List Builder Giveaways Worthwhile
As stated above, results from list-building giveaways can vary for each promotion, so we’ve taken steps to ensure you are set up for success with ours:
- We guarantee at least 100 new subscribers. Most of our giveaways average closer to 300 new emails.
- At the guaranteed 100 subscribers, with a 10% loss, your cost per subscriber is $0.56, far below the average $2.00/new subscriber rate.
- All new emails entered into our system are verified by a third party to ensure they are legitimate addresses and not bots, AI, or addresses known to excessively unsubscribe and report spam (the latter helps to eliminate freebie-seekers as much as possible). This means the subscriber loss will actually be much lower than the 10% in the example above, in turn lowering your per-subscriber cost and increasing your ROI.
Are you ready to see if CraveBooks list-building giveaways are worthwhile for your book? We have new giveaways going online every month. Sign into your CraveBooks account and go to the Giveaways tab to see which ones are coming up and be sure to subscribe to our author newsletter so you’ll be notified when we’re enrolling for the next group.
