Minimizing your email churn rate is a critical challenge worth tackling when it comes to increasing the revenue of your SaaS.

Your email churn rate is a crucial metric to keep close tabs on when growing your SaaS. If your list is shrinking instead of growing it means that you will have less contacts to sell to. If your email list is solely made up of paying customers and it is shrinking, it will likely indicate churning customers and lost revenue.

Pay close attention to the number of recipients who are unsubscribing from your future emails and use this as a signal as to what types of emails your subscribers enjoy (and hate) receiving.

What Is An Email Distribution List?

An email distribution list is a group of email addresses that have opted into receiving email communications from you. For your SaaS, this is likely a list of your trial, free, and paid users of your product. It may also include potential customers who have opted into receiving updates or resources from you.

Email distribution lists can grow by manually adding email addresses to a list or by receiving new subscribers via a form like the one Loops offers. 

Once a subscriber is a part of your email distribution list, most email platforms will offer tools for managing the list. This should include basic options for adding, removing, and editing these email addresses, as well as tracking delivery and engagement metrics.

What Is Email Churn Rate?

Email churn is when an email subscriber unsubscribes from receiving future emails from you and your company. Email churn is not necessarily a bad thing and in some cases, you may want to consider proactively removing users from your list if they aren’t engaging with your product or emails.

For a SaaS company, this may mean that they simply no longer wish to receive product updates but it also may mean that they have stopped being a customer altogether which is when a user churns from your product entirely.

Keep in mind, a user may wish to no longer receive a newsletter or product update emails, but still wants to use your actual service!

How To Calculate Churn Rate For Email

To calculate the churn rate for email, you need to determine the number of subscribers who have unsubscribed or stopped engaging with your emails over a specific period of time. 

To calculate: Determine the total number of subscribers at the beginning of the period (e.g. month, quarter, year). 

Then determine the number of subscribers who have unsubscribed from your future emails during the period. This includes people who have opted-out, marked your emails as spam, or have not opened or clicked any of your emails during the period.

Now, divide the number of unsubscribed or inactive subscribers by the total number of subscribers at the beginning of the period.

Multiply that result by 100 to convert it to a percentage.

The formula to calculate churn rate is:

Churn Rate = (Number of unsubscribed or inactive subscribers / Total number of subscribers at the beginning of the period) x 100

Example: Let’s say you had 10,000 subscribers at the beginning of the month and 1,000 of them unsubscribed or stopped engaging with your emails during the month, your churn rate would be:

Churn Rate = (1,000 / 10,000) x 100 = 10%

This would mean that 10% of your email subscribers churned during the month.

You should consistently rack your email churn rate to see where you can be making improvements. You will also want to be gaining more subscribers each month than you are losing in order to keep your business moving in the right direction.

How To Reduce Your Email Churn Rate

After working so hard to grow your subscriber base the last thing you want is for them to opt-out of future communications. Let’s dive into a handful of proven strategies to help reduce list churn.

Limit frequency

No one truly loves email. Ok, well, only a very small percentage of us! Remember that your customer’s inbox is a sacred, often stressful place, and only send them emails that matter to their business and interests.

Timely delivery

Send emails when your audience is online and able to immediately benefit from receiving them. Did your new SaaS customer just sign up? Send them an email with the next steps necessary to complete their onboarding before they get confused and leave the page.

‍Consistent publishing schedule

Whether it’s a monthly product update email, a weekly newsletter highlighting the news in your industry, or a daily product usage summary, it’s important to maintain a consistent publishing schedule to help build and maintain the trust and expectations of your readers. If your audience is anticipating a monthly email and you begin sending them something 5x per week, they may become annoyed and less likely to continue receiving future emails.

The same goes for the timing of the email. If you traditionally send your product update emails during the workday, avoid randomly sending one at 11pm when your customer is sleeping.

Consistency builds trust. Trust reduces churn.

Respect your customer’s inbox and time

Keep your emails succinct and authentic. You are not only competing against every other vendor’s email that day/week but also the recipient's family and colleagues.

Avoid overly salesy copy and be sure to have a clear ask or call to action that your customers can perform without hesitation.

Consistent content and design

Right alongside a consistent publishing schedule in importance is a consistent design and content expected in your emails.

This includes consistency with your branding, length of emails, the use of images, header and footer designs, etc.

Why is this important? You want your reader to know what they are getting into before even opening your email and you want them to recognize your unique content before it gets lost in the sea of other emails.

Make An Impact On Your Email List Churn

Keeping tabs on your email list churn rate is important for any SaaS business and can have a substantial impact on your bottom line. 

Utilizing the strategies outlined above will help you make a positive impact on your email list churn rate and ensure your customers are receiving emails that truly matter to them while also helping reduce your email churn rate. Win-win!