Why I don't care about your newsletter open rates

Hi, I'm Lennart Schneider, Founder of Subscribe Now, helping decision-makers in the subscription economy attract subscribers and keep them happy.

When I talk to newsletter creators, it usually doesn't take long before one of two questions comes up:

1) What actually constitutes a good open rate?

2) My newsletter has an open rate of 40%. That's great, isn't it?

The honest answer is: There is no such thing as a "good" open rate, and the open rate really says nothing about the quality of your newsletter.

In this article, I want to clear up this misconception and explain when you should still pay attention to it.

P.S. I've written a book! The playbook for successful subscription models: With growth strategies and best practices from 50 leading companies. You can pre-order here (or on Amazon).

Why open rate says nothing about the quality of your newsletter

I completely understand the need for benchmarking and comparability. With newsletters, you have relatively few metrics, so you try to draw as many conclusions as possible from what you do have. Often, however, you draw more conclusions than are actually useful.

Let’s start with the basics: open rate is a fraction. You calculate it by dividing the number of unique opens by the total number of recipients. So far, so simple.

However, this leads to a small detail that is often overlooked. You can increase the open rate in two ways: more openers, or fewer recipients.

The latter point is often overlooked, but it’s crucial. People who don’t open your newsletter are often the same ones. And especially with older mailing lists, you often have a large proportion of inactive subscribers who have lost all interest.

So, if you have a 50% open rate with 10,000 recipients, then there are probably several thousand among them who haven’t opened a single email in six months. Let’s say there are 3,000 of them. If you remove them from the mailing list, your open rate immediately jumps from 50% to 71.4% (5,000 opens/7,000 active recipients).

Has this improved the quality of your newsletter? Are your readers more satisfied? No!

Has the quality of your distribution system improved as a result? Absolutely!

Why would you delete valuable leads?

Admittedly, I’ve recommended this to many newsletter creators, but the enthusiasm is usually lukewarm. They’ve put a lot of money and effort into acquiring these subscribers, so why would they just delete the addresses? Perhaps the reach is even important for advertising sales (even if nobody sees the ads).

But here are a few reasons why it’s worth it:

If someone hasn’t opened your emails for a long time, the likelihood of them returning is relatively low
You increase the risk of being perceived as spam
Depending on the newsletter tool and contract, costs increase as you send more emails
Your brand suffers when customers perceive you as pushy
Your advertisers are surprised when clicks fail to materialize on a supposedly large distribution list, and become suspicious
…

Many of the world’s leading newsletters therefore place great importance on the quality of their mailing lists and remove users after a long period of inactivity. The New York Times even discloses this quite transparently:

How can I find out who is inactive?

Good question! And not so easy to answer. Since Apple’s Mail Privacy Protection, it’s often difficult to track who actually opens an email – Apple automatically opens emails before they reach the recipient, and therefore your email program thinks these users are active. Other users block tracking and are registered as inactive, even though they enthusiastically read every issue. So if you’re unsure: just ask the users.

Clicks can be tracked more reliably than opens, and if readers don’t click after (repeated) requests, you can remove them from the mailing list with a clear conscience.

Do I really need to delete them?

No. You can also pause them for now, or reduce the frequency. A good example is the sports newsletter “The Gist”. They temporarily pause inactive subscribers, and then when a major event is coming up (for example, the Olympics), they try to reactivate them.

However, you shouldn’t overdo it. If you haven’t contacted them for 1.5 years, you should continue to refrain from doing so. After that time, their consent to contact them also expires.

Even more reasons why open rate is misunderstood

Your open rate depends on numerous factors, and the quality of your content is just one of them. Here’s a (likely incomplete) list of factors that affect open rates:

Mailbox display:

Subject lines (Do they encourage clicks?)
Pre-header (Do you tease the content well?)
Sender’s name (Do they trust you and look forward to your emails?)
Sender images (Will they stand out in the inbox? Only works with certain clients)

The quality of your distribution:

Cleanup of inactive users (Are non-openers regularly removed?)
Segmentation (Do you always send emails to the entire mailing list or do you select recipients based on interests?)
Preference Center (Can users configure which emails they receive and how frequently?)
Age of the addresses (How long ago did someone sign up?)
Lead campaigns/address origin (On which channels and with which promises were the users acquired? Did they want the newsletter, or did they just share their email to participate in a competition, for example?)

Deliverability

Advertising tab in Gmail (Are emails from Gmail classified as advertising and not delivered to the main mailbox?)
Spam (Do the emails often end up in the spam folder?)
Bounces (Can the emails not be delivered? What are the different types of bounces, hard and soft?)
Image sizes (are the images too large?)
Email size (Will the email be truncated, for example, by Gmail, which happens from 102 kb upwards?)
Shipping time (Is the shipping time chosen?)

Contents

Good quality & relevance
Diversity (do you cover different needs so that every issue contains an “aha” moment?)
Continuity & predictability (Do readers know what to expect and why each issue is worthwhile?)

Technology

Email tool or measurement technology (each mailing tool measures opens slightly differently, which affects the KPIs)
Tracking Opt Out (Have users disabled tracking of clicks and opens?)
Auto Opens on iOS (Are open rates inflated because emails are automatically opened due to privacy settings?)

So I can ignore the open rate?

Not quite. Since we don’t have many metrics, it’s still a valuable signal, as long as you’re aware of what it tells you, and what it doesn’t.

What you shouldn’t do is compare your absolute open rate with competitors who use completely different tools and whose lead generation works differently. This apples-to-oranges comparison is completely pointless.

What you can do instead:

Observe long-term trends: Is my own open rate constant? Have there been any sudden changes I should understand? (But keep in mind that these changes could be due to technical reasons, e.g., more users with tracking protection.)
Optimize your open rate with A/B testing: e.g., send each email with 3 different subject lines to a sample group beforehand and send the best version to the rest of the distribution list.
Examine outliers: Were there any particular issues that were opened more or less frequently than average? What can I learn from them?
Re-contacting those who didn’t open the email: Some companies send a newsletter a second time if it wasn’t opened the first time. I find it a bit spammy, but it seems to work.
Use net reach (recipients x open rate) as the basis for advertising deals: This is fair to your advertising clients and you can also justify why the CPM (cost per thousand contacts) is higher if you are contacting a cleaned distribution list.
Comparing segments: When running different lead generation campaigns, you shouldn’t just focus on the short-term cost per lead (CPL), but also consider whether the campaigns generate active recipients in the long run. A sweepstakes often generates a large number of addresses cheaply, but the open rate drops significantly after just a few campaigns.
For better comparability, you can calculate a cost per lead after, for example, 10 campaigns. If you generate 1,000 leads per campaign for €1,000 in each of two campaigns, the short-term CPL is €1. If, after 10 campaigns, 70% of the leads in campaign A are still active, while only 30% remain active in campaign B, you get a clear picture: In campaign A, an active lead cost €1.43, while in campaign B it cost €3.33.
…