Latest / The Email Marketing Podcast with Fexingo: Newsletters, Open Rates, and Subscriber Growth / Why Email List Churn Is Not the Enemy
Transcript
- Lucas: So Luna, I've been digging into something that feels almost heretical in the email marketing world, and I think it's worth a full conversation. Luna: I'm intrigued. What's the heresy? Lucas: The idea that churn — losing subscribers — might actually be a sign of health, not a problem to be solved. For years, the mantra has been 'grow your list at all costs,' and churn is seen as the enemy. But the more I look at the data, the more I think that's backwards. Luna: Okay, you have my attention. But let's be real — churn is scary for any marketer. A shrinking list feels like failure. Lucas: Exactly. And that's the trap. When you obsess over the number of subscribers, you start making decisions that hurt your engagement, your deliverability, and ultimately your revenue. I came across a case recently that really crystallized this — a media newsletter that lost about 15 percent of its list in a single month after a big purge, and yet their open rates jumped by twelve percentage points. Luna: Fifteen percent in a month? That's a massive drop. What did they actually do? Lucas: They went through their list and removed anyone who hadn't opened an email in over ninety days — no re-engagement campaign, just a hard cut. And it hurt in the short term. Their subscriber count took a hit, and I'm sure the boss was sweating. But within two weeks, their open rates went from the low teens to the high twenties. And their click-through rates nearly doubled. Luna: So they lost a chunk of their list but gained a much healthier engagement rate. That's the classic trade-off. But how do you know if that's the right move for your list? Not every business can afford to lose fifteen percent. Lucas: Right, and that's the key question. The answer depends on what you're optimizing for. If you're selling ads based on raw subscriber count, then churn is genuinely costly. But if you're relying on engagement to drive revenue — which is true for most e-commerce and B2B companies — then a smaller, more engaged list is worth more than a bloated, passive one. Luna: That makes sense. But there's also the cost side. Every subscriber you have costs you money in terms of email service provider fees and the time you spend creating content. So churn actually saves you money. Lucas: Exactly. And that's one of the hidden costs of chasing zero churn. I remember a SaaS company we worked with a while back — they had a list of about 50,000 subscribers, but their engagement was so low that they were paying for thousands of people who never even opened their emails. When they finally pruned the list down to 30,000, they cut their email service provider costs by nearly forty percent, and their engagement metrics went through the roof. Luna: Forty percent cost savings is huge. And I bet their deliverability improved too, because those unengaged subscribers were probably dragging down their sender reputation. Lucas: Absolutely. Internet service providers like Gmail and Yahoo look at your engagement rates when deciding whether to put your email in the inbox or the spam folder. If you have a huge chunk of people who never open, that's a red flag. So by pruning, you're not just saving money — you're protecting your ability to reach the people who actually want to hear from you. Luna: So churn can be a feature, not a bug. But let's get into the nuance. How do you know what a 'healthy' churn rate actually is? Is there a benchmark? Lucas: It depends on your industry and your list's age. For a typical e-commerce list, an annual churn rate of 20 to 30 percent is pretty normal. For newsletters, it can be higher — I've seen numbers around 40 percent a year. But the real issue is not the average churn rate; it's the shape of your churn curve. I'll get to that in a second. Luna: Okay, so it's not just the rate — it's the pattern. Tell me more about the shape. Lucas: So if you look at a cohort of subscribers — say, people who signed up in January — you'll typically see a spike in churn right after sign-up. Maybe 10 to 15 percent of them unsubscribe in the first month. That's normal; people sign up for a lead magnet and then decide it's not for them. But the danger is when you see a steady, ongoing bleed of long-term subscribers. That signals your content is losing relevance. A healthy list has a high early churn, then a tail that flattens out. Luna: So a spike early is healthy, but a constant drip later is a warning sign. That's a useful distinction. Lucas: Right. And that's why I think the whole conversation about churn is often misguided. Marketers panic when they see a high churn rate, but they don't look at the underlying structure. A list that loses 30 percent of its new subscribers in the first sixty days but then keeps the rest for years is actually in a great position. The problem is when you have a slow, steady leak that never stops. Luna: That makes me think about how we measure churn. Most people just look at the monthly churn rate. But maybe we should be tracking cohort retention curves instead. Lucas: Exactly. Cohort analysis is the way to go. You look at each signup cohort and see how many are still with you after three, six, twelve months. That gives you the real picture. And it also helps you spot problems early — if a recent cohort is churning faster than previous ones, something about your onboarding or your content has changed. Luna: So what do you do when you spot that? Say you see a cohort churning faster than usual — what's your next step? Lucas: First, you look at the data. Is it a specific segment? Did you change your welcome email? Did you change your signup source? Sometimes it's as simple as a new ad channel bringing in lower-quality leads. And then you decide: do you want to win those people back, or do you want to let them go? And the answer might be 'let them go' — because you don't want to invest in someone who was never a good fit. Luna: But there's also the emotional side of it. As marketers, we hate losing subscribers. It feels personal. Lucas: It does. But you have to detach from the number and focus on the quality of the relationship. Every unsubscribe is a signal that you're not for everyone — and that's okay. In fact, it's necessary. If you're trying to be everything to everyone, you end up being nothing to anyone. That's why I love this quote from Seth Godin: 'The goal is not to have the biggest list, it's to have the right list.' Luna: That's a great way to put it. And it reminds me of something we've talked about before — segmentation. But we've also said that segmentation is overrated. How does that fit here? Lucas: Good point. Segmentation is a tool, not a goal. If you have a list full of engaged subscribers, you might not need heavy segmentation — you can send the same message to everyone and get great results. But if you have a list with a mix of active and passive subscribers, segmentation can help you tailor your messages to each group. The problem is when you use segmentation as a band-aid for a list that's fundamentally unhealthy. You can't segment your way out of a bad engagement problem. Luna: So what's the practical takeaway for someone listening who's staring at their churn dashboard right now? What should they do first? Lucas: I'd say the first step is to calculate your churn rate by cohort, not just the overall rate. Look at the first 30 days, 60 days, 90 days for each signup month. Then compare cohorts over the last year. If you see a recent cohort that's churning faster, dig into why. And if you see a long tail of unengaged subscribers that you've been ignoring, consider a re-engagement campaign or a hard prune — but do it strategically. Luna: And when you do prune, what's the best way to do it? Do you send a final email giving people a chance to stay? Lucas: That's a good practice. You can do a 'last chance' email — 'if you want to keep hearing from us, click here' — and then remove anyone who doesn't respond. That way you're giving people a choice, and you're keeping the ones who actually want to be there. But the key is to do it regularly, not just once a year. I think many marketers are terrified of churn because they've never built a system that embraces it. Luna: So you're saying we should build churn into our strategy as a normal part of the cycle? Lucas: Yes. And that's a shift in mindset. Instead of trying to minimize churn, you should try to optimize it. You want the people who are a good fit to stay, and you want the people who aren't to leave — as quickly and painlessly as possible. That's how you build a list that's worth something. Luna: It sounds like churn is actually a sign that you're doing something right — you're attracting the wrong people, but you're also weeding them out. Lucas: Exactly. And that's the healthy way to think about it. The worst thing you can do is cling to every subscriber out of fear. That's how you end up with a list that becomes a liability — it costs you money, hurts your deliverability, and gives you false confidence in your marketing. Luna: You know, this conversation reminds me of something we got in the mail the other day — literally, from a listener. They asked about how to handle churn when you're a small business with a limited audience. It's easy to say 'let them go' when you have thousands of subscribers, but what if you only have 500? Lucas: That's a great point. With a small list, every subscriber counts. But the same principle applies. If you have 500 subscribers and 300 of them never open, you're better off with 200 engaged people. Because those 200 are the ones who will buy, share, and advocate for you. And you can always grow from a healthier base. Luna: And that's the thing — people are afraid that if they prune, they'll never grow back. But the opposite is often true. A cleaner list attracts better engagement, which can lead to more referrals and organic growth. Lucas: Right. And there's data to back that up. I've seen studies that show that brands that regularly prune their lists see higher open rates, higher click-through rates, and even higher conversion rates per subscriber. That more than compensates for the smaller size. Luna: So the metric to watch isn't subscriber count — it's revenue per subscriber. Lucas: Exactly. And that's the bottom line. If you're making more money per person on your list, you're winning even if the list is smaller. That's what I'd like listeners to take away: don't fear churn. Respect it. Manage it. Use it to your advantage. Luna: And if you're not sure where to start, just look at your own list. Find the people who haven't engaged in six months. Ask yourself: are they helping you or hurting you? Then make a decision. Lucas: I love that. And speaking of decisions — I want to mention something that's been on my mind. The reason we can have these conversations without a paywall or ads is because of listeners who chip in a few dollars a month. It genuinely keeps the lights on. If you've gotten value out of these episodes, you can support us at buy me a coffee dot com slash fexingo. Even five bucks helps cover the hosting fees and editing costs. Luna: Yeah, it really makes a difference. We're not a big network, so every bit counts. And it lets us keep doing deep dives like this one. Lucas: Anyway, back to churn — I want to give you one more concrete example that I think will stick. There's a B2B company we've mentioned before, I won't name them, but they had a list of 40,000 and were about to shut down their newsletter because engagement was so low. They decided to do a full reset: they sent a re-engagement email, waited a week, then removed anyone who didn't reply. They ended up with 12,000 subscribers — a 70 percent drop. But within three months, their open rate was 60 percent, and their click-through rate was 12 percent. They went from thinking about killing the newsletter to it becoming their top lead source. Luna: That's a dramatic story. And it shows that sometimes the best thing you can do is let go of the past and start fresh. Lucas: Yeah. And I think that's the core message: churn is not your enemy. It's a natural part of having a healthy list. The goal is not zero churn — it's the right churn. So next time you see that unsubscribe notification, maybe don't panic. Take a breath. And if it's a good signal, send them off with a smile. Luna: And maybe even thank them for helping you improve your list. Lucas: Ha, exactly. That's the attitude. Alright, that's a wrap for today. We'll be back next week with another email marketing deep dive. Until then, keep your lists clean and your engagement high.