Definition
Email list compound growth describes the exponential expansion that occurs when each period's net additions build upon an increasingly large base. If a list adds 5% net new subscribers per month, the absolute number of new subscribers added each month grows because 5% of a larger number is a larger absolute gain. This compounding effect makes sustained positive net growth extremely powerful over time.
Calculation
The compound growth formula uses the net growth rate (acquisition rate minus churn rate) applied over successive periods. A list of 100,000 subscribers growing at 3% net per month reaches approximately 134,000 after 12 months and 180,000 after 24 months, assuming the rate is sustained. Even small differences in net growth rate produce dramatically different outcomes over multi-year horizons.
Best Practices
- Track net growth rate monthly rather than focusing solely on gross acquisition volume
- Understand the growth rate required to reach target list size within your planning horizon
- Identify the biggest drag on net growth rate — is churn too high or acquisition too low?
- Remember that churn rate typically increases with list size, requiring acquisition rate to increase to maintain net growth
- Use compound projections for capacity planning rather than linear extrapolations
Related Glossary Terms
Abandoned Cart Email
An abandoned cart email is an automated message sent to customers who added items to their online shopping cart but left without completing the purchase. It is one of the highest-converting email types in ecommerce.
ARPU (Average Revenue Per User)
ARPU (Average Revenue Per User) is a metric that measures the average revenue generated per email subscriber over a specific period, used to evaluate list value and campaign effectiveness.
Attention Rate
Attention rate is the percentage of email opens that last longer than 5 seconds, distinguishing genuine reads from passive opens, preview-pane views, or Apple MPP auto-loads.
Bounce Rate Threshold
A bounce rate threshold is the percentage of hard or soft bounces at which email platforms and ISPs begin to penalise sender reputation, typically around 2-5%.
Bounce Rate
Email bounce rate is the percentage of emails that were rejected by the receiving server before reaching the recipient. It is a key indicator of list health and data quality.
Campaign Lifted Revenue
Campaign lifted revenue is the additional revenue generated by an email campaign beyond what would have occurred without it, measured via a holdout group or statistical lift analysis.