Latest / The Email Marketing Podcast with Fexingo: Newsletters, Open Rates, and Subscriber Growth / How Email List Shrinkage Can Boost Revenue
Transcript
- Lucas: So there's a temptation to think of your email list like a savings account, right? You just keep adding to it and the interest compounds. But what if the smartest move this quarter is actually to shrink it on purpose? Luna: Shrink it? That sounds like the opposite of every growth metric we've ever talked about. You're going to have to explain that one. Lucas: Okay, so there's this mid-sized e-commerce retailer — I won't name them, but they sell outdoor gear — and they came to us with a classic problem. Their list had grown to about a hundred fifty thousand subscribers, but open rates had slid to eighteen percent, and revenue per campaign was flat. Luna: Eighteen percent is pretty rough. I bet they were sending to a lot of people who just weren't interested anymore. Lucas: Exactly. And that's the trap. They'd been acquiring subscribers through pop-ups and contests, but they never cleaned house. So when we dug into the data, we found that over forty percent of their list hadn't opened an email in six months — and another chunk had never opened a single one. Luna: So what did you recommend? Just delete them all? Lucas: Not all at once. We started with a re-engagement campaign — a final email saying, 'Hey, we miss you, here's a ten percent discount if you come back.' And for the folks who still didn't respond, we moved them to a suppressions list. Over the next two months, that list went from a hundred fifty thousand down to about a hundred five thousand. Luna: So you cut thirty percent of the list. That's a big number. What happened to the open rates? Lucas: They jumped to thirty-four percent. But here's the kicker — revenue per campaign went up twenty-two percent. Because the people who were left were actually engaged, they were more likely to click, more likely to buy. Luna: That's the kind of result that makes a CFO a little less nervous about losing subscribers. Lucas: Right. And this isn't some fringe tactic. It's become a core part of list health. If you think about it, the ISPs — the inbox providers — they're watching your engagement. If a large chunk of your list never opens, it drags down your sender reputation, and that affects deliverability to everyone else. Luna: So it's not just about saving money on your email service provider — it's about protecting the whole channel. Lucas: Exactly. And that's the angle we're going to drill into today: how shrinking your list can actually grow your revenue. We'll walk through the mechanics, the metrics, and a few cautionary tales. Luna: Before we go deeper, I want to say something about the show itself. We've been doing this for a while now, and a lot of you have emailed us saying these episodes have helped you rethink your email strategy. If you've gotten something out of these conversations, a couple of dollars a month is genuinely what keeps these going — buy me a coffee dot com slash fexingo, if you've found it useful. Lucas: Yeah, it's a small thing that makes a big difference. We keep the show ad-free, and that's only possible because of listeners like you. So thank you for that. Now, back to the shrink to grow playbook. Lucas: So the first step is figuring out who's actually engaging. You don't want to prune based on a gut feeling. You want to set a threshold — say, anyone who hasn't opened or clicked in the last ninety days. Luna: But wait, isn't it risky to cut people who just got a new job or switched email addresses? They might come back eventually. Lucas: That's a fair point, and it's why you don't just delete them permanently. You suppress them for a while, or you put them in a separate win-back flow. But if they haven't engaged in six months, the chances of them suddenly becoming a customer are pretty low. And the cost of keeping them — in terms of deliverability — is higher. Luna: So it's a trade-off: potential future revenue against the health of your whole list. Lucas: Precisely. And here's a number that hits home: in that e-commerce case, the thirty percent we pruned were responsible for less than two percent of total revenue in the previous year. So we weren't sacrificing much. Lucas: Now, the second piece is engagement-based segmentation. Once you've pruned the dead weight, you can segment the remaining list by how active they are. Your most engaged segment — say, those who've opened in the last thirty days — can get different messaging than those who've been quieter. Luna: Like a VIP tier for your best customers, and a more restrained approach for the lukewarm ones. Lucas: Exactly. And that's where you can really push revenue. For the high-engagement segment, you might send a flash sale with a shorter deadline. For the others, you might send a longer nurturing sequence with educational content. Luna: That makes sense. But what about the fear of losing subscribers? A lot of marketers I talk to are terrified of the number going down. It feels like failure. Lucas: It's a mindset shift. The size of your list is a vanity metric. What matters is the number of engaged, active subscribers who want to hear from you. A list of fifty thousand engaged subscribers will outperform a list of two hundred thousand where most people don't open. Lucas: And there's a broader trend here. With the rise of AI and the changes in email authentication — like BIMI and stronger spam filters — the inbox is getting more competitive. Brands that maintain a clean, engaged list are going to win. Luna: So it's not just about the immediate revenue bump. It's about future-proofing your email channel. Lucas: Right. And the data backs that up. According to a recent industry report, brands that regularly prune their lists see an average open rate increase of twenty percent within two months. Luna: That's a big incentive. But I'm also curious about the operational side. How often should you be doing this? Is it a quarterly thing? Lucas: It should be ongoing. But if you're just starting, I'd recommend a quarterly audit. Look at engagement over the last ninety days, run a re-engagement campaign, and suppress the non-responders. After a couple of cycles, the list will be healthier and you can do it less frequently. Luna: And what about the tools? Are there any specific features in email service providers that help with this? Lucas: Most major platforms have engagement-based segmentation built-in. You can create a segment of subscribers who haven't opened in ninety days, and then send them a targeted re-engagement email. Some even have automatic suppression rules. Lucas: The key is to not just set it and forget it. You have to monitor the results. Are the re-engagement emails actually working? Are you seeing the open rates improve? And most importantly, is revenue per campaign going up? Luna: Let's talk about the metrics you should be tracking. Because if you're going to convince a boss to let you shrink the list, you need a good story. Lucas: The most important metric is revenue per email, or revenue per thousand emails sent. That's the one that ties directly to the bottom line. Open rate is a proxy, but revenue is the real goal. Lucas: You should also track deliverability, specifically the bounce rate and spam complaints. A cleaner list will naturally have lower bounce rates and fewer complaints, which boosts your sender score. Luna: So in that e-commerce case, what did the revenue per email look like before and after? Lucas: Before the prune, they were generating about thirty-eight cents per email sent. After, that number went up to fifty-one cents. So they were sending fewer emails but making more money overall. Luna: That's a compelling case study. But I imagine some listeners are thinking, 'What if I have a really small list? Is pruning still worth it?' Lucas: Absolutely. Even if you have five thousand subscribers, if half of them never open, you're better off focusing on the two thousand who do. You can send more relevant content, and your open rates will be higher, which can attract new subscribers through social proof. Lucas: The principles scale. It's all about focusing on the people who want to hear from you. Luna: Before we wrap up, I want to revisit something you mentioned earlier — the idea of not just pruning, but also warming up the list. What's that about? Lucas: Warming up is more for new IPs or new domains, but it applies here too. If you've pruned a lot, you might want to gradually increase your send volume to maintain your sender reputation. But honestly, if you're sending regularly and engaging, that's usually enough. Lucas: The bigger point is that list pruning is not a one-time event. It's a habit. You have to be willing to let go of the people who aren't interested, so you can better serve the ones who are. Luna: And that's the mindset shift we've been circling all episode. It's not about chasing a bigger number; it's about building a better relationship with the people who matter. Lucas: Exactly. So next time you're tempted to buy a list or run a giveaway to inflate your numbers, ask yourself: would you rather have a hundred thousand strangers, or twenty thousand loyal customers? The answer is obvious. Luna: That's a good note to end on. Thanks for joining us, and we'll catch you next time.