Intro
"Only what gets measured gets improved."
Peter Drucker never actually said this. But if he had, it would definitely apply to newsletter growth.
Most newsletter operators track the wrong growth metrics. Which means they optimize the wrong things.
And this leads to slow audience growth. Or — even worse — fast growth of a low-quality audience that will never drive revenue for your newsletter.
To help you avoid this trap, I've created a list of the 3 newsletter growth metrics you should actually track and care about.
For some of them I've included benchmarks too. So you can see how you stack up against the competition.
Let's dive in 👇
Metric 1️: Payback Period
On a high-level, newsletter growth is a really easy math problem:
- I pay $X to acquire a new subscriber (the cost-per-acquisition or CPA)
- It takes me Y days/weeks/months for that new subscriber to generate $X in revenue for my newsletter (the payback period)
- So — if I want to grow my newsletter faster — I need to find a way to make $X very small or Y very short (or both)
If you only know one growth metric for your newsletter, it should be the payback period.
Let's look at a real life example to understand just how powerful a short Payback Period is:
Example: High Payback Period
The Office Party newsletter started using Meta ads to acquire new subscribers.
In their first attempts, they were paying a (high) CPA of $3.50 per subscriber.
They only monetized the newsletter with ads. So it took them ~12 months to earn back that $3.50 CPA (= a 12 month payback period).
With a total budget of $5000 to invest into newsletter growth, that means The Office Party could only afford to acquire ~1500 new subscribers every year ($5000/3.50).
Example: Medium Payback Period
With a bit of help, The Office Party managed to optimize their Meta ads.
Now they were only paying a CPA of $1.74 per new subscriber.
So — instead of their original 12 month payback period — they could now earn back their $1.74 CPA investment much faster... in a 6 month payback period.
All of a sudden, that $5000 growth budget goes a lot further.
Instead of 1500 new subscribers per year, The Office Party could now afford to acquire 5'700 new subscribers per year.
That's almost 4x faster growth with the same budget.
But it gets better...
Example: Instant Payback Period
The Office Party continued to pay $1.74 per subscriber on Meta ads. But they added in a new revenue stream: Paid recommendations.
Before, it would take them 6 months to earn back the $1.74 CPA via ads.
Now, with paid recommendations, they were earning on average $4+ per new subscriber instantly.
That's a payback period of ~ zero days. And it's the holy grail of profitable newsletter growth...
If you earn more than it costs to acquire a new subscriber before you have to pay for that subscriber, you can essentially scale your newsletter to a huge audience size very quickly, for free.
And that's what The Office Party has done:
📊 Payback Period Benchmarks
I've worked closely with 200+ top newsletters on paid audience growth. Here's how they stack up in terms of payback period:
The lower you can get your payback period, the better.
What's great about tracking the payback period is it helps you realise just how silly it is to focus on lowering your CPA like most of "newsletter Twitter" does...
Acquiring a subscriber for $1 who makes you ~no revenue is way less impressive than acquiring a subscriber for $5 who earns it back for you within a month.
Metric 2️: New Active (Target) Subscribers
In 2024 it's easier than ever to acquire new subscribers.
But are they the right people in your target audience? And are they actually engaged readers?
Instead of just tracking how many new subscribers you're adding to the newsletter, come up with some criteria that will tell you — within 10-20 days of a new subscriber joining your list — whether they are likely to become a valuable engaged reader or not.
For broad interest newsletters (think: Morning Brew, personal newsletters, local newsletters...) that might mean tracking the number of active new subscribers.
Subscribers who:
- are still subscribed after 14 days
- have opened at least 3 emails
- and clicked on at least 1 link
For niche newsletters (think: B2B publications like Payload Media or even this newsletter) just tracking new active subscribers isn't enough.
You need to be confident that your new subscribers are actually in your target audience.
So you'd track new target, active subscribers who:
- are still subscribed after 14 days
- and have taken a specific action (eg filling out a survey, clicking a specific link) that indicates they are in your target audience
As with all the metrics I'm sharing today, it's important to track new active subscribers on two levels:
- General (across your newsletter as a whole)
- Channel-specific (so you can see how eg Meta ads are performing compared to SparkLoop)
More advanced growth teams will even track this at an individual campaign level, so they can see differences in how (for example) different ad sets are performing.
Metric 3️: Referral Rate
The referral rate is one of my favourite "overlooked" newsletter metrics.
Directly, it measures how healthy your word-of-mouth growth is: Are existing subscribers sharing your newsletter and referring new readers?
Indirectly, it tells you a lot about the quality of your content. And how your newsletter's brand/reputation is perceived by your audience.
🎯 Measuring your referral rate
First, you need to make sure you're able to identify (the main sources of) subscribers who were referred by existing readers:
- Anyone who was added via your referral program
- People who signed up from social media posts that weren't yours
- People who signed up from any share/forward to a friend buttons you have in your newsletter
(for these last two, use custom UTM parameters to track)
Next, you want to add up all the subscribers who meet these criteria (the referred readers) and divide by the total number of subscribers who receive your newsletter.
Eg if you have 1000 subscribers and 200 of them were referred, then your referral rate = 200/1000 = 0.2 = 20%
A referral rate of 20% means that — for every 5 new subscribers who join your newsletter — on average they'll result in 1 new referred subscriber.
📊 Referral Rate Benchmarks
There's a lot of variance to a "good" referral rate.
It depends on:
- how quickly your audience is growing (= less time to have referred)
- how well you can track referral activity
- how easy it is for people in your target audience to share with lots of other potential readers
But, as a rough guide, here's how the referral rates stack up for newsletters I've worked with:
