The False Economy of Cutting Email Costs

2 publishers tried to fix their email costs this month. One deleted 30,000 emails. The other cut their daily newsletter to weekly. From daily to weekly. Both of them shot themselves in the foot. Hey, Tyler.

Hey, hey.

Hey, hey. Welcome to the pod.

Welcome to the Paywall Podcast, where we discuss paywalls and paywall strategies for news and magazine publishers. This episode of The Paywall Podcast is brought to you by LeakyPaywall. LeakyPaywall is the most flexible WordPress subscription platform. Find out more at leakypaywall.com. And now for today's episode.

You're at The Paywall Podcast. I'm Pete from LeakyPaywall. This is Tyler from Newsletter Glue, and we're gonna talk about email. Email list cleaning. I know that sounds like a super exciting topic, but it's super important. Just a little context. We have, you know, as you know, Tyler, we launched List Builder not too long ago, maybe a month ago. And what we're seeing is we're seeing email signups just skyrocket. They're, I mean, the data that I'm looking at is showing about a 5x email growth over opt-ins and popups and things like that. And that's great. And it's a good problem to have. And we had two publishers recently that reacted to their email lists absolutely ballooning by like, hey, let's drop a bomb and just wipe everybody out.

Oh, wow.

So what we're going to talk about is what do you do? Right? Like, what, what can you do? And we're going to talk about the front end, we're gonna talk about the back end. So the front end is, What do you do with emails that are coming in on the front end? Is there a way to like filter that? And then we'll talk about the backend. How do you actually clean your list? Like what should you do? Right. Should you just delete a bunch of emails or, or is there a better way? So that's, that's that. All right. Okay. And email costs do go up. I mean, I think, I don't know what you've seen, but it seems like all the big, you know, MailChimp, et cetera, they're just, you know, the, the, the days of sort of free email are waning. I mean, there's still some new startups that are, that are trying to get in there and they're offering super aggressive plans, but the big guys are, they're, they're, they're charging up.

Yeah. There's, there's certainly a tax on, you know, emails, email list building for sure by the, by the big players.

Yeah. Yeah. Well, it's become, I mean, it's obviously it's, it's probably the most valuable asset that a publisher has is their audience. Right. And, uh, that's, that's their email list. Okay. So I got a question for you. I got a quiz question for you. You ready? So for the publisher that went from sending out a daily email to their free registered readers to, and that switched to a weekly email to their free registered readers. What do you think happened?

I would imagine that conversions started to drop a bit just by nature of fewer emails going out to people.

How, how did you have the right answer right up front? Like you just, we didn't plan that possible, Tyler. No, we totally didn't. I was like, oh, I'm gonna get Tyler here. Oh yeah.

No, that makes sense.

Right?

You lower the, the volume and like, what do you expect will happen? Right? It's, you're not communicating with your, your audience and, uh, those potential warm leads, if you will, that are free registered and now they're no longer getting a daily dose and there's a whole week that could go by when they might not ever hear from you. So the odds of getting them to subscribe, I think just drop, I don't know the data, but I would imagine drop pretty dramatically.

You are absolutely correct. So I'm looking at, here's a chart of the publisher that went from weekly or daily to weekly with their free registration list. And you can see pretty clearly what's happening towards the end of the month, right?

Yeah.

Yeah. They went from, they went from really consistent subscription, paid subscriptions, uh, to all of a sudden starting to show some weakness in their paid, paid signups. I mean, I think the data is pretty clear. It's only one example. I might be, might be a little off, but, um, I just thought I'd look at it because they have, um, high enough volume to really, for the data to really be, make sense over a short period of time. Yeah.

And the amount of money that you're like saving from cutting your email costs, like you're just completely demolishing recurring revenue from those potential new signups.

Well, that's a good point. Like if you look at the other publisher that knocked 30,000 people off their list, okay, so yeah, it's going to cost you $200, $300, $400 a month extra to send to that list. But what if 1% of those folks converted?

For sure.

Right.

Yeah.

And it's a $50 a year subscription, which would be low. But, you know, you're talking knocking $15,000 off your revenue, right? Just boom. Just like that.

Yeah.

So that's not, that's not super great. Okay. All right. So let me, let me talk a little bit about the cost of email. We're living in a world now where social media is throwing publishers less traffic. SEO is, Piano reported last year, dropped, there was about 36% drop in overall traffic to publishers. AI Overviews is just sucking up eyeballs, right? People are never leaving Google's AI overviews when they, they're looking for, for something. And the one channel that the publisher can control is email. I mean, SMS is another one, but email is the big one, right? And so when you have an email, unless it's, unless it's a fake account, we'll talk about that, or somebody who's totally not engaged and we'll talk about that. You have, you have some nurturing to do. Right? Like you have that, you have value there. Um, you know, one of the things I, that I think it's, it's important to keep in mind that even somebody who doesn't engage, but maybe they open the email, but they don't actually click on something. They might pass that email to someone else who may actually become a paid subscriber.

Right?

Email is super viral and it's the best kind of virality. It's like, I get it. Hey, read this email from a friend. I'll read it. Right? Yeah. and I may click and I may go and drop off my email address 'cause this was really great.

For sure. I mean, I, I get several newsletters from several different national outlets and I rarely ever click into the story, right? And I pay for some of them, right? And so it's, it's not unusual for free Register users to just browse the email and maybe it takes like 10 opens for them to finally commit to paying. So don't, don't give up on 'em right away. If they're opening the email, that's a huge win. Right out of the gate. Yeah.

Yeah, for sure. Okay. So let's, let's just, I just want to back up a little bit and sort of provide kind of the, the scenario in terms of what's happening here with, with, and what, what you as a publisher should need, must be doing today to grow paid subscriptions. So this is, we're looking at Teejourney. This is our new list builder that they've set up a few weeks ago. If you're listening to this, basically it's a very simple full takeover on the second article view that, that says, hey, you know, you'll get access to this article, you'll join our newsletter, just drop in your email. And this walks the, this walks the, the reader through a registration process. It even will, it even locks them in if somebody's coming back. And this has been, this, this takeover and email-only start has been converting that, that 5x. Like, it's just, we look at the charts, it just is ridiculous how many emails they grab, which leads to the problem of, oh my God, my email costs are up. Right. But this is part of a framework we call the publisher flywheel. And the thing is, is like you have a lot of traffic that comes to your site as a publisher. And some of those folks are going to subscribe right away when they hit the paywall. That's just, You know, they love your content. They can afford to pay it. They just do it. And then there's a lot of random traffic that will, will bounce and should bounce because they're just not really, they're not really valuable. And then there's the big opportunity in the middle, which is the folks that, that are either on your newsletter list now or, or go through this registration I just showed you and drop off their email. And they're like, yeah, I want to, I want access to that article or maybe a few articles. I want to be on the newsletter, but I'm not ready to pay you. And that's where the big opportunity is. So there's a, there, you gotta nurture this list. You can't just delete the list. You gotta nurture it. Right. And, uh, or, or, and you can't just undersend to it either, but we'll talk more specifics about that. So the way the, the, the flywheel works is, you know, you have that registration right up front, you engage people, um, and then they get sent to the newsletter as soon as they drop off their email. And now, now your email's sending them back to the content and that, and, and your website is doing the job of converting, basically showing them upgrade messages. And then over time, you know, 1 week, 10 weeks, a year, whatever it takes. And we find, I think you, you, you find, and this is, I know this is true that some people convert like right away, they'll register and they'll be like, okay, I'm in, like they've You've created momentum and they're like, yeah, sure. Take my money. Here you go. I forget what the percentage on that is, but it's pretty high. Yeah. And then, so then you're, you have this loop where the newsletter is just every day, ideally, or whatever your newsletter cadence is, is sending readers back to the website. They're seeing upgrade messaging and, you know, we are humans. We need to see messages 20 times before we react to something. Right. And so that's, that's, that's your goal. So get that upgrade message message in front of people over and over and over again until they finally break down. Like my wife did with the local newspaper a while ago. It's like, take my money, right? Yep. Anyway. Okay. So that's the framework. And then insights. Yes, you have— at least we provide the data for a publisher to see, you know, what free registered readers are really engaged in, and they can, they can target them. Okay. So, um, after saying all that, um, let's see, we talked about the cost. Okay. So what do you do? Let's talk about what do you do now? And I'm going to start on the backend. Like, what do you do to actually clean, keep the list clean? Um, I'm not like a super duper newsletter expert. I know enough to be dangerous. Um, but there are some best practices here. And the big one, and I've experienced this myself, is, you know, what they call like a sunset policy, right? So the idea is that, okay, you look at your list and you say, wow, I have 30,000 people. I'll just pick on that number that are just not engaged, right? No opens, no clicks, whatever you decide is the, is the lack of engagement level. So what do you do instead of just knocking them off? Well, Send them an email, put them in a segment, right? Called whatever engagement and send them an email saying, hey, do you really want to be on this email list? Right? It's like, and you can do that once. You can do it maybe a couple of times and then send them an email. Maybe the third time it says, okay, well, this is the last email you'll get from us. And then they actually do come off the list, but you don't delete them. Just put them on the do not send segment, like create that, that third segment is like do not send. Because you will probably send to them at some point down the road when something really big happens, right? Like maybe it's a giant promotion. Maybe it's like some big news item or something that, you know, that everybody would enjoy. Yes. You kick it out to your nice big fat list and, and, and you might shake loose some people. But that, that sunset list, right? That's where you want folks to get the email that says, hey, do you want to be on it? And I have, I don't know, about you, but I have absolutely been like, yes, please leave me on the list. And sometimes I'm like, no, I, yeah. Or just don't respond. Like, no, I don't want to be on the list, but I've absolutely been like, yes. And it works. You know, you get a percentage of readers that really are engaged. You just didn't know it. They care about your content. And like we said before, maybe they're forwarding your emails off to someone else. Okay. Now, I'll also mention that I interviewed Dylan Redcup from Growth Currency a few podcasts ago. That's a really good one if you guys want to dig into more of sort of email strategy. And what he says is, Replies are really the best metric in email. If you can get somebody to actually reply to your email, there's a lot of good things. Obviously they're engaged, but like Gmail, like Google notices it, right? And they're like, oh, somebody replied. Clicks on a link, of course, work. If you have a button that says, yes, keep me on the list. You know, that's a, that's a sign of engagement. And then you can see that in your, in your data that now, now someone's clicked and they're, they're sort of off the not engaged list. And, but I just sort of want to take this opportunity to say, try to get people to actually reply to your emails. And that could be, you know, surveys, letters to the editor style feedback, like encouraging your readers to engage through actually replying back to you. Maybe you're saying, whoa, that's crazy. But that becomes content for your publication. You turn, turn that, turn that around. And letters to the editor back in the olden days of snail mail and no internet, which I survived, you're, you, those were hugely popular, absolutely hugely popular. And I'm not sure why I don't see that email version of it anymore. But anyway, just a, just a thought. Okay. So that's the, that's the, what do you do on the backend? Okay. We're not going to get into the, the, the depths of exactly what to do. There's all sorts of best practices you can look up for, for like creating that sunset policy and what to, what to do. I'd probably jump into AI and have AI tell me what the best practices are. Okay. Yep. Hard bounces, get rid of them. Just going through my notes here. Okay. Let's talk about the front end now. So the front end is this registration that we just looked at. I'll go back to it. What do we do here at this moment in time? And there are really 3, 3 things. One is if you get some fake emails, like 5%, whatever the number is, who cares? Don't do— I mean, just don't get in the way of somebody who's actually interested in dropping off their email. You know, if that's, you know, you're asking for a password on step 2 here, that's, that's a pretty good little filter right off the gate. And I don't know what you see, Tyler, but on our end, we see most of our publishers that works pretty well for. I mean, you, you you probably want to reCAPTCHA installed and running. And that, that seems to solve 90% of the use cases. Is that, does that seem about right?

For sure. Yeah. It only becomes an issue when you have high, high volume publishers where people will just work night and day to get around putting in a real email, or at least putting in an email address that happens to be real, but it's not theirs. But as you said, it's not worth disrupting the 95% of people who are actually dropping off legitimate emails and, you know, having a frictionless experience, you know, so.

Yeah.

Yeah. Yep.

Yeah. So, so it's not really a problem until you like feel it, like you're just getting hammered with fake email addresses. So the second solution is use an email verification system. So this is a system. Um, we do, we do offer that to our publishers and we have a bunch of them that use it and love it and we never hear from them and that, that's the way it should work. And what that does is it will check, it will actually check like Gmail's database. Like, is this a real Gmail address? Is this a real Yahoo address? Um, it will sniff out like all the bad words in the email, fu@emailaddress.com, which is amazing how they come in, you know, people get really ornery about that. So those literally just block those kinds of emails and that works well. And what's good about that system is there's no, there's no double opt-in. There's, there's no work that's required for the, for the valid interested person who drops off their email address. They just drop off their email, they choose their password and boom, off they go. There's no extra work they have to do. So it keeps the sort of the friction low. On that. So that's, that's called email verification. Okay. And we charge $49 a month for that. So that, that's kind of the scope of what you're looking at. Okay, the last one is something that's new for us, right? It's called OTP, one-time password. And it works really well. And the way, the way it works is You put in your email and then you have to, you have to confirm that this is a real email that you control. So, so we send a number, a 6-digit number to your email. You go grab that and you punch it in here. And yep, now you can, now you can register and off you go. That's kind of for publishers that are getting killed with spam. Like you just, the spam bots have shown up or whatever, and it's, they're It's just like nonsense after nonsense email. It's, it's really for, for volume-based publishers that have had enough. So, and yeah, you, I know Tyler, you've been using that for a little while now, right?

Yeah.

That worked pretty well. How's that work?

It works quite well. And I think it's largely because we're all kind of used to doing that kind of one-time pass, whether it's with your bank or whether it's with any other platform that's asking you to verify who you are. And it doesn't, like, we haven't seen any kind of reduction in, you know, free registration conversions because of it. And if you're looking at this on YouTube, you know, it's a very seamless process. It doesn't redirect. They don't have to click a link. They're just literally go grab that 6-digit code, put it here, verify it, and off you go. So it's not, a ton of friction, but it does prevent a lot of that nonsense. Like, you know, ihatepaywalls@gmail.com, stuff like that. So it certainly will help. Again, this is not bulletproof, like either people can create like fake like.com emails or disposable email addresses. So it's not completely 100% perfect. But this is like a 99% cure for issues around bots.

Well, it's like, it falls under like getting past the paywall thing, right? It's like if you're gonna work so hard to get around a system, you'll never pay for anything, right?

For sure.

Like you're just, you're not that, that's not your personality type.

That's exactly right. That's exactly right.

Yeah. So if you were watching this on YouTube, I just demonstrated one-time password. I put in a junky email address and now the next screen says, hey, check your email and put in the code. And then since it was junky, it's like, oh, whoops, I got stopped. And so, so it, it, it blocked me.

Yeah. And what's, what's great on, just really quick on a technical side, what's really great about this, this function in LeakyPaywall is that the account doesn't get created. So, you know, they can, bots can have at it. Like it doesn't matter. Like we're not creating a bunch of dummy accounts that just load up your subscriber table with, with junk. Like once the verification process is completed and you create that password, that's when the account gets created. And that's why this is such a, you know, for those who are, who are experiencing issues with, with bots and bogus emails, like this is, is the solution.

Yeah. It doesn't pollute your subscriber table. You have a nice clean subscriber, you know, they're all validated emails. That's right.

Someone took the time to check an inbox, to put in a code, to, to verify that they're, you know, at least, yeah, that's, that's an excellent point.

Okay, I, that is really what I got. I'd say you have a big list that's growing, look at, look at opens and clicks, pull those suspects into a new segment for re-engagement, send them an email or 2 or 3 saying, hey, You know, we're just going to knock you off the list unless you really want to stay. Have them click a button, right, to signal intent. Have them reply. Even if they reply, that's gold. And then if you want to filter on the front end, you got the email verification and you got the one-time password options. So yeah, that'll do the trick. Anything else, Tyler?

That's all I got.

Parting words of wisdom. All right. Awesome. We'll catch you guys next time. See ya.

Thanks for listening to the Paywall Podcast. If you'd like to get in touch to discuss subscription strategy, go to leakypaywall.com. See you next time.