The money is in the list. That’s a common phrase that anyone in the online marketing community has heard before. But is it true? While creating a high-quality news letter and building a huge subscriber base can be an incredible source of income and allow you to create cash on demand like a personal ATM machine, there are a few things to consider. The money IS in the list, BUT to really make the most of the newsletter business model you need to have a high converting sales funnel that focuses on several key factors. Whether you’re a hot-shot online entrepreneur or a big-time fishing enthusiast, having a newsletter can be a fun and profitable business model for practically any niche if you do things the right way.
Quality vs. Quantity
What’s better, having a list of 1,000 subscribers or a list of 10,000 subscribers? While most would say that the bigger list is better, what’s more important is how well the list converts. A list of 1,000 subscribers that converts at 10% is essentially the same as a list of 10,000 that converts at 1% from a monetary stand point. However, there are a few advantages to having a larger list.
With a larger list an increase in your conversion percentage will make you more money than with a smaller list. This essentially means that your efforts to improve conversions will be more greatly rewarded with a larger list, making things easier on you in the long run.
Another thing that makes it better having a larger list is that you can get more free buyers on your list by doing adswaps with other list owners. And, other company offers may do better to your list than your own offers, so JV opportunities with other list owners may produce large payouts you didn’t even expect (most JV’s pay 50% of the net profit to affiliates)
Building a List of Buyers
As previously mentioned, the size of your newsletter subscriber base is secondary to how much money it earns overall. Even if you’re offering a newsletter that people must pay to receive that income will often be over shadowed by the money you make through up-sells and product offers. This is why having a good conversion rate for these offers is always going to be important. The best way to ensure that you get decent conversions right off the bat is to build a list of buyers.
Unlike freebie seekers, buyers are a proven source of revenue. Once someone buys from you they are statistically more likely to buy from you again and again. These are the people you want on your list and there are several ways to go about building a list of buyers.
The first, and probably most common, method is to actually build two lists. The first newsletter entices people to sign up by offering them a freebie. As you build your subscriber base you then offer other products and up-sells. When someone makes a purchase you then move them onto your second newsletter, the list of buyers. This list will be the one you market to more aggressively since you know that the subscribers are more likely to buy.
Also, make sure you call your second newsletter something exciting like an “elite” newsletter, or “exclusive” newsletter. Make your subscribers feel special to be moved to the new newsletter.
Newsletters that your subscribers must pay to receive automatically attracts buyers since they’re paying a subscription fee. This tends to make for a smaller, yet higher converting list. You can potentially make more money with this method but only if you know what you’re doing.
When offering a paid newsletter you have to remember that you must provide value at all times. People aren’t going to pay you so that you can just spam them with product offers and up-sells. To make money using up-sells you’re going to have to be a bit more subtle and mix in your offers with quality, useful information. Remember, your subscribers are already buyers, you don’t need to go overboard with the salesmanship.
Getting People to Opt-in
Getting people to subscribe to a free newsletter is much easier than a paid newsletter. The downside to this is that many people who opt-into a free newsletter do so just so they can get a freebie. A lot of times, they immediately unsubscribe or simply stop opening your emails. In some cases they’ll just opt-in using an email account they use for spam.
On the other hand people who subscribe to a paid newsletter are genuinely interested in what you have to share with them. While you may get fewer subscribers each one is much more valuable than a subscriber of a free newsletter. This is true regardless of your niche and applies to newsletters about golfing, cooking, fishing, and other activities in addition to the more common marketing newsletters.
In any case, you have to give people a compelling reason to opt-in. Your newsletter should be all about providing value to the subscriber. This is a classic example of “give to get.” In other words, you take care of your subscribers and you’ll find yourself rewarded with a high conversion rate. One method of doing this is by using freebies.
How to Use Freebies
Freebies can work wonders for getting people to opt-in to your list as well as to keep your list happy. However, freebies can work against you if you don’t use them properly. Remember, you want a list of buyers, not a list of spoiled freebie seekers.
Offering a freebie to get people to opt-in can work well for both free lists and paid lists. If you’re doing it for a paid list make sure you emphasize the fact that the freebie is worth more than the cost of the first month’s fee, or something of that nature. Alternately, you can simply offer the first month free or for a super low price such as $1. This gives you a chance to get people hooked on your content and also allows you to take advantage of the fact that many people will forget to unsubscribe, sometimes for months at a time.
Another clever way to make your list virtually pay for itself in the eyes of your subscribers is to make sure you give them a freebie each month that outweighs their subscription fee. This can be a mini- report or product you create or have created. You can also go the rout of making deals with businesses related to your niche and get some hot coupons and discounts for your subscribers.
For even more marketing power, why not offer special discounts on your own products and services exclusively through your newsletter? This is a very subtle, yet powerful way to do up-sells.
One word of caution about freebies though. If you over-do it, your subscribers may become spoiled and stop buying up-sells from you. Why pay for something when there is a freebie right around the corner? In most cases you should limit the amount of freebies you give away. Try to ensure that they cover the cost of the subscription but beyond that be careful and don’t go overboard with this tactic. Just like spamming your subscribers with constant offers can work against you, so can giving away too much.
Provide Value, Get Money
Making a living with a newsletter isn’t just doable, it’s also an incredibly practical business model that works great on it’s own or as a way to support another business model. Whether you run an offline business or are an up-and-coming net entrepreneur having a newsletter is a great way to connect with your customers, build up your reputation, and position yourself as an authority in your niche.
Just remember that a list doesn’t build itself overnight and your initial goal should be to provide true value to your subscribers, not to make money. Make your subscribers feel special and privileged without spoiling them and you’ll build a sense of reciprocity. Then when you pitch offers at them your conversions will be much higher. If done right, you’ll eventually find yourself being able to “print money” on demand with your up-sells and offers, making your newsletter an invaluable source of income.