How to Calculate Unsubscribe Rate? Definition, Formula, and Tips to Reduce it

Unsubscribe Rate - Is it good or bad? What if I say they are both good as well as bad. On a brighter side, it helps you clean your list. While on the darker side it's painful to see the contacts moving out. Leaving you to ponder what you could’ve done to save those unsubscribers.

What is Unsubscribe Rate?

An unsubscribe rate shows you the percentage of users who have opted-out from your mailing list after an email campaign. This tells you the number of subscribers who have chosen not to receive your newsletter any further.

Higher the unsubscribe rate, lower your email deliverability, and domain reputation leading to ISP or email service providers like Gmail and Yahoo marking you as Spam. A spike in this number helps you understand which campaigns are working and which aren’t.

How to Calculate Unsubscribe Rate?

An unsubscribe rate is the number of unsubscribes divided by the number of emails delivered.

Unsubscribe rate calculation:

For example, if 3000 emails are delivered in your email campaign and 20 subscribers have opted-out then your unsubscribe rate is 0.6%.

A good unsubscribe rate is 0.5%. However, this varies according to your industry. Do check here for the unsubscribe rate across various sectors.

Well, how will you know when someone clicks on the unsubscribe button in your email? ESPs like SendX helps you track your unsubscribe rate over a period of time or across a campaign.

This helps you do an audience analysis - what did your subscriber like or dislike about it? What interests them? What is the pattern of your unsubscribe rate? Did it increase because of the email format, or maybe an irrelevant subject line triggered it?

Tracking your unsubscribe rate from time to time is not just critical but essential as it helps you realign your email marketing strategy.

What is a Good Unsubscribe Rate?

According to a report published by Smartinsights in 2020 about unsubscribe rates across industries, the range of unsubscribe rate is 0.2-0.1%.

So if you are looking for a number against which you can benchmark your unsubscribe rate, I would say choose 0.15%. If the unsubscription rate is below this, you don't have to take any specific steps. If you see it rising, you should take an audit of your email marketing activities and see which emails people unsubscribe from, what kind of audience in unsubscribing the most.

Eventually, you will find a pattern in unsubscriptions and form your own good or bad unsubscribe rate.

Why is My Unsubscribe Rate so High?

If your unsubscribe rate is above 1% (or in double digits.. ouch!) it can be because of the following factors:

Mismatch in expectations

People's expectations from the emails are different from what you are delivering. This can happen if your messaging on signup form is not coherent with the content you are delivering. For example, if you promised your audience marketing content but then your content is more suited for sales than marketing, then people would unsubscribe.

Formatting of content

If your content is exactly what the audience wants but it's delivered in a manner that's not easy to read, digest and scan through then people won't be getting the desired value out of it and hence would unsubscribe.

No or incorrect segmentation

Your email campaigns should only be sent to people who would find them relevant. To ensure that, you should create categories of your audience based on demographic, purchase history, engagement rate etc.

For example, an email with an announcement for a sale in the women's section should be sent to women only. Most men would not find it relevant (some who might want to shop for a woman might, but those are exceptional cases). So if it's sent to men also, they will unsubscribe thinking it's not a relevant brand for them.

Ways to Reduce Unsubscribe Rate

Segment your email list

Segmenting your audience from time to time can help you send content that is relevant to them, bringing the number of your unsubscribers down. Follow the best practices mentioned here if you have an email list of 100k or more. If you have a comparatively smaller list, do check out our ultimate small business marketing guide.

For example, if you have an eCommerce store you can segment your audience based on location, gender, average order value ranges, purchase frequency, holiday-buyers, high-return rate customers, audience coming from particular sources etc.

Then, if you are launching a new collection in let's say the city of Paris, you can create a segment that satisfies two conditions: 1) location of the contact is Paris 2) they are among your top spenders on your website.

Then you can invite them for an exclusive sneak-peak or send special coupons to generate a buzz.

Understand the goals of your email marketing

Users stick around only if you provide valuable and relevant information. Determine the goals of your campaign, build engaging content that interests your reader. Check out our 5 Email Copywriting tips for creating engaging content.

Follow the art of personalization

Too many emails from the same brand can be annoying at times. Understand what your subscriber needs and send them only that. Check this guide to bulk email blasts

Personalisation means more than just using the first name of the subscriber. It means sending the right emails to the right audience at the right time. So for example, if someone signed for your webinar on 'how to read faster', you send them 2-3 emails related to that. You also send reminder emails to attend the webinar. This will not only make them feel special but also engaged. Hence, building trust in your brand leading to lower unsubscription rate.

Remember, unsubscribe is part of the game and you can’t completely avoid it. However, you can track it to analyse the success of your campaigns and make modifications accordingly.