Latest / The Newsletter Podcast with Fexingo: Substack, Beehiiv, and Email Newsletter Business / How a Single Unsubscribe Rate Cut Doubled One Newsletter's Revenue
Transcript
- Lucas: So there's a newsletter I've been following for a while, runs on Substack, covers the business of niche food brands. A few months back they made a decision that sounds suicidal on paper: they deliberately raised their unsubscribe rate. Luna: Deliberately raised it. That's a new one. Usually the goal is to keep people from leaving, not to show them the door. Lucas: Right, and that's exactly why it's such a good case study. The founder, a woman named Priya, had been sending three emails a week for two years. She had about forty thousand subscribers, but open rates had drifted down to the low twenties, and paid conversions had basically flatlined. Luna: Forty thousand subscribers and flat revenue. That's the classic trap of chasing the number instead of the health of the list. Lucas: Exactly. So she ran a quick audit. She pulled a segment of subscribers who hadn't opened an email in ninety days, which turned out to be almost a third of the list. And instead of trying to win them back with a big re-engagement campaign, she just… sent them a plain-text email that said, basically, 'I'm cleaning up my list, if you're still interested, reply and I'll keep you on. If not, no hard feelings.' Luna: And what happened? Did they get a flood of replies from people who'd silently been reading all along? Lucas: About four percent replied. The other ninety-six percent let themselves be unsubscribed. So in one week, she cut her list from forty thousand to about twenty-eight thousand. That's a thirty percent drop in subscribers overnight. Luna: That takes guts. I mean, most sponsors look at total subscriber count, so dropping thirty percent feels like you're shooting yourself in the foot. Lucas: It does, and her sponsorship revenue did dip for a month or two. But here's where it gets interesting. Within six months, her open rates climbed from the low twenties to the mid-forties. And conversion to paid more than doubled. Her paid subscriber count went from about nine hundred to over two thousand. Luna: So she lost twelve thousand free subscribers and gained over a thousand paying ones. The math is pretty clear. Lucas: And the revenue story is even better. She had been converting at about two percent of her engaged readers. After the purge, that conversion rate jumped to over five percent. Her monthly recurring revenue went from roughly eight thousand dollars to eighteen thousand in six months. Luna: That's a sixty percent increase in monthly recurring revenue, just from cutting dead weight. Why does that work so well? Is it just about sending to people who actually want to hear from you? Lucas: Partly, but there's a compounding effect. When your open rates are higher, the platform's algorithm rewards you. On Substack, that means more visibility in the network effects, more recommendations, more growth from organic discovery. Plus, her emails started landing in the primary inbox more often because engagement signals improved. Luna: And I bet it also changed her mindset. When you know your readers are actually reading, you can write more freely, test bolder subject lines, take more risks. Lucas: She said exactly that in her write-up. She felt like she was finally writing for an audience that was leaning in, not a crowd that was half asleep. And that showed in the content. Her paid posts started getting more comments, more replies, more sharing. Luna: So what's the practical takeaway for someone listening who's got a list of, say, five thousand subscribers and is afraid to prune? Where do they start? Lucas: The first step is to look at your own data. Pull a segment of subscribers who haven't opened in ninety days. If that segment is more than twenty percent of your list, you've got a bloat problem. Then send that plain-text re-engagement email, not a fancy designed one. It should feel personal, almost like a note from a friend. Luna: And if they don't reply, you just let them go. No hard feelings, like she said. Lucas: Right. And you want to do this on a regular cadence, maybe every quarter or twice a year. It's like tending a garden. You've got to pull the weeds so the flowers can breathe. Luna: That's a good metaphor. And honestly, if you're a listener who's been thinking about trying something like this with your own newsletter, I'd say go for it. The data is on your side. Lucas: And you know, if these conversations have sparked something you've actually tried, that's the best part for us. So if today's episode felt worth a coffee to you, buy me a coffee dot com slash fexingo is where you can do that. It's a small way to keep this show ad-free and independent. Luna: Yeah, and we genuinely read every note people leave there. It helps us know what's landing and what you want more of. Lucas: Anyway, back to the list hygiene. One thing Priya did that I think is underrated: she changed her welcome email to set expectations upfront. She told new subscribers, 'I send three times a week, if that's too much, here's how to get only the weekly digest.' That cut down on early churn and kept the list cleaner from day one. Luna: That's smart. It's like a filter at the door instead of mopping the floor later. Lucas: Exactly. And she also made a point to track a metric she calls 'engaged subscriber rate' — the percentage of your list that opened or clicked in the last thirty days. She watches that like a hawk, not just total count. Luna: That's a great north-star metric for any newsletter. It tells you the real health of the audience, not just the vanity number. Lucas: And it's a metric you can improve quickly. Cut the dead weight, and your engaged rate goes up almost overnight. That's the kind of win that keeps you motivated. Luna: So for anyone listening, the challenge is to look at your own list this week. What's your engaged subscriber rate? If it's below thirty percent, you might have a pruning opportunity. Lucas: And it doesn't have to be as drastic as Priya's thirty percent cut. Even trimming five or ten percent of clearly inactive subscribers can boost your deliverability and make your next campaign more effective. Luna: I like that it's a low-risk experiment. You can always re-engage those people later with a different angle if they come back. Lucas: And that's the thing — unsubscribes aren't a failure. They're a signal. A high churn rate can actually be a sign that you're getting more relevant, because the people who leave are the ones who were never going to be a good fit. Luna: So the next time you see a spike in unsubscribes after a particularly opinionated post, that might be something to celebrate, not panic about. Lucas: Exactly. Priya's story is a great example of how focusing on quality over quantity can flip your business around. It's counterintuitive, but it works. Luna: Well, I know what I'm doing this afternoon. Pulling my own list hygiene report. Lucas: Let us know how it goes. If you find a huge chunk of dead weight, we'd love to hear about it. That's the kind of experiment we can dig into in a future episode.