Latest / The Email Marketing Podcast with Fexingo: Newsletters, Open Rates, and Subscriber Growth / Why Email List Churn Is a Growth Signal
Transcript
- Lucas: So there's this quietly terrifying stat from the latest Mailchimp benchmarks report, released just last month. Across more than two million campaigns, the average list churn rate — people leaving or going inactive — sits at about eight-tenths of a percent per month. Luna: That doesn't sound like a lot, but compounded over a year that's nearly ten percent of your list gone. Lucas: Exactly. And most marketers see that number and panic. They think, I need to grow faster, I need more subscribers to plug the leak. But the report had a secondary finding that I think is actually the more interesting one. Luna: What's the finding? Lucas: The lists with the highest churn — above one-point-two percent monthly — also had the highest click to open rates, by about twenty-two percent. And their spam complaint rates were nearly half the industry average. Luna: So losing people faster was actually helping them? That feels counterintuitive. Lucas: Right. It flips the instinct. The instinct is to hold on to everyone. But what the data suggests is that churn isn't just inevitable — it's functional. It's your list self-correcting. Luna: Tell me about a case where you've seen this play out well. Lucas: Sure. I talked to the email lead at a B2B SaaS company called — let's call it Gridline — they do project management software. They had a newsletter going out weekly. For two years they never pruned. The list grew to about forty-five thousand. Luna: And then what happened? Lucas: Open rates dropped below eighteen percent. Click rates under two percent. Their deliverability started tanking — emails were landing in promotions tabs and spam folders more and more. They decided to do a hard reset: remove anyone who hadn't opened in ninety days. Luna: How many did they cut? Lucas: They cut twenty-two thousand names. More than half the list. The team was terrified. But within three months, their open rate climbed to thirty-four percent, and click to open hit eleven percent. Their sales team reported that leads from email were converting at twice the previous rate. Luna: And the total list size? Did it stay down? Lucas: It rebounded to about thirty thousand within six months, but the quality was completely different. They had a rule after that: if a subscriber doesn't engage in sixty days, they get a re-engagement sequence. If no response in ninety days, they're out. Now their monthly churn runs about one-point-one percent, and they're fine with it. Luna: That's a very specific threshold. Is there a standard churn rate that's considered healthy? Lucas: It depends on your sending frequency and industry. Mailchimp's overall median is about zero-point-eight percent. But if you're sending daily, you might see two percent churn and that's fine. If you're sending monthly and you're above one percent, you likely have a content problem. Luna: So churn is a diagnostic too? Lucas: Exactly. It tells you something about fit or frequency. And this is where I think most marketers get it wrong — they treat churn as a failure metric. But if you're not losing any subscribers, you're probably not reaching the right people to begin with. Luna: I've seen that in lifestyle newsletters too. There's a food newsletter called Salt & Pepper that I subscribe to. They recently sent a note saying, 'If you haven't opened in three months, we're saying goodbye.' I thought that was bold. Lucas: And did you appreciate it? Luna: I did. It made me respect the list more. I actually clicked through that week because I didn't want to lose it. And I've seen other people on Twitter saying the same — a little friendly churn pressure can re-engage people. Lucas: That's a real dynamic. The fear of being removed is a stronger motivator than the fear of missing a single issue. And it keeps the list clean for the people who actually want to hear from you. Luna: So how should a marketer set a churn target? Should they just look at industry benchmarks? Lucas: Benchmarks are a starting point, but the better approach is to look at your own cohort data. Segment new subscribers by month and track their sixty-day engagement. If a cohort drops below twenty percent open rate, that's a signal to adjust your welcome sequence or your content. Luna: And what about the people who do churn — should you try to win them back? Lucas: You can, but don't overdo it. One re-engagement email after thirty days of inactivity, maybe a second after sixty. If they don't bite after that, let them go. The cost of keeping a dead subscriber is higher than the cost of losing them. Luna: What's the actual cost? I've seen numbers like point-zero-zero-one cents per email, so it seems negligible. Lucas: The direct sending cost is tiny. But the indirect cost — damage to sender reputation, lower engagement rates that affect algorithm placement, the opportunity cost of not reaching active subscribers — that's significant. One study from Return Path found that a one percent increase in spam complaints can reduce inbox placement by twenty percent. Luna: So a small list of engaged subscribers is worth more than a large list of apathetic ones. Lucas: Absolutely. And I think the shift in mindset is: don't measure your email program by list size. Measure it by revenue per subscriber or engagement rate. If your list is shrinking but revenue per subscriber is growing, you're winning. Luna: That's a tough sell in a lot of organizations where the CMO wants to see the number go up every month. Lucas: It is. But the data is on your side. And you can show them the Gridline example. Or the Mailchimp data. The best performing quartile of lists in that benchmark report had churn rates above one percent. Luna: One last question: are there any types of churn that are genuinely bad? Like, not just inactive but angry churn? Lucas: Yes. You want to distinguish between passive churn — someone just stops opening — and active churn, where they hit spam or unsubscribe with a complaint. If your spam complaint rate is above zero-point-one percent, that's a red flag. That means your content or your acquisition method is off. Luna: And if it's high, what do you do? Lucas: Audit your signup process. Are you using confirmed opt-in? Are you promising something in the welcome email that you're not delivering? Are you sending too frequently? Usually it's a mismatch between expectation and reality. Luna: So the takeaway is: churn is not the enemy. Stagnant, unengaged lists are. Lucas: Exactly. Embrace the churn that comes from honest engagement. And if these kinds of marketing conversations have sparked something you've actually used in your own work, you know, a couple of dollars a month is genuinely what keeps these going — buy me a coffee dot com slash fexingo, if you've gotten something out of them. Luna: Yeah, it really does make a difference. No pressure, but it helps us keep the show ad-free and focused on the data. Lucas: So to wrap up: next time you look at your email dashboard, don't panic at the churn number. Ask yourself: is this healthy churn or bad churn? And if it's healthy, celebrate it. It means your list is working for you, not against you. Luna: Good advice. I'll be checking my own churn rate this afternoon. Lucas: Let me know what you find. For Fexingo Business, I'm Lucas. Luna: And I'm Luna. See you next time.