Is List Building Very Profitable?

15 replies
I just did some hypothetical number crunching and I'm having trouble seeing how list building will be very profitable (especially relying on paid traffic to build list).

Say I'm using Bing Ads PPC and my avg CPC is 0.50. I spend $200 and get 400 clicks to my landing (squeeze page). Let's say 45% of those clicks subscribe to my list which would give a total of 180 list subscribers for $200.

Let's say I'm promoting a Clickbank product that pays $29/per sale and I get 1 sale upfront for every 100 clicks. So after 400 clicks, I make $116 total from sales made right away.

So far without list email marketing (just immediate sales):
$200 spent on PPC
$116 in affiliate sales


Now let's say only 1 in 30 list subscribers ever makes me a $29/sale purchase. Out of 180 list subscribers, that would only make me $174.

So now after immediate sale + list driven sales:
Spent in PPC: $200
Affiliate $ earned: $290

That doesn't seem too profitable to me. I mean I guess I could spend $2,000 and make $2,900. & then $50,000 to make $72,500. But my list would need to be astronomically huge to make that kind of money.

Not to mention, a good portion of this list will opt-out or whatever.

Can someone explain to me how list building can be as profitable as everyone claims?
#building #list #profitable
  • Profile picture of the author Michael Meaney
    This is why you focus on the EPC.
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  • Profile picture of the author ZanyZebra
    Originally Posted by mjoet3324 View Post

    I just did some hypothetical number crunching and I'm having trouble seeing how list building will be very profitable (especially relying on paid traffic to build list).

    Say I'm using Bing Ads PPC and my avg CPC is 0.50. I spend $200 and get 400 clicks to my landing (squeeze page). Let's say 45% of those clicks subscribe to my list which would give a total of 180 list subscribers for $200.

    Let's say I'm promoting a Clickbank product that pays $29/per sale and I get 1 sale upfront for every 100 clicks. So after 400 clicks, I make $116 total from sales made right away.

    So far without list email marketing (just immediate sales):
    $200 spent on PPC
    $116 in affiliate sales


    Now let's say only 1 in 30 list subscribers ever makes me a $29/sale purchase. Out of 180 list subscribers, that would only make me $174.

    So now after immediate sale + list driven sales:
    Spent in PPC: $200
    Affiliate $ earned: $290

    That doesn't seem too profitable to me. I mean I guess I could spend $2,000 and make $2,900. & then $50,000 to make $72,500. But my list would need to be astronomically huge to make that kind of money.

    Not to mention, a good portion of this list will opt-out or whatever.

    Can someone explain to me how list building can be as profitable as everyone claims?


    You're making a couple of mistakes.

    First, you're selling a low cost product. Second you are only selling once.

    The value from a list, providing you are doing it properly (most people don't) is in the lifetime value of a customer. Don't sell them once. Sell them twice, three times, etc. This requires, often, a portfolio of products.

    If you are only selling once then, obviously, your product needs to have both a higher price and decent margins.

    Hope this helps.

    Good luck with your venture.
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  • Profile picture of the author Tom Addams
    List building isn't so much about the immediate sales; it's about the ongoing relationship you build with your subscribers, where the relationship of is of the win-win variety (or it should be): you help them (often with education) and they help you (taking forms of action that earn you money).

    Two popular phrases spring to mind: the money is in the list, the fortune is in the follow-up.

    Michael brings up EPC, and I agree, good point. It sounds like you're no newbie, OP, so I won't state the obvious. What I'll say: look beyond paid channels and optimize your sales conversions. I really have nothing against paid routes; personally speaking, I just find I can do better without them; same thing may work for you, too.

    What I'd suggest, look into - viral marketing.

    VM really is just one option, but it's a nice one to consider. The trick is to engineer pretty much every aspect of your list business with VM in mind: the opt-in incentive(s), on-site materials, off-site materials.

    Consider something.

    You pay 200 bucks and get 400 unique visitors to your squeeze. Or, you generate a viral response to your off-site media.

    It only takes 1 person, for instance, to share that media in a group of 100,000 sets of eyeballs, or even just with his friends (many of whom may reshare your media), and you're on your way to generating healthy traffic.

    And without having to buy each click.

    - Tom
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    • Profile picture of the author ryanbiddulph
      Excellent add Tom.

      Many folks get tripped up on the outcomes of anything online - list building, blogging - without noting the actual purpose of the channels....which is helping people and building bonds with the folks you help.

      No strategy works for the person who sees list building as an impersonal way to get money out of numbers on a screen. Every strategy works - seriously - for folks who give their time, energy and love to help humans one to one through the medium of listing building.

      If you fear you are wasting your time, energy or money on list building or any venture, you will talk yourself out of it. Self-sabotage. But if you let go the fear and build a list for the right reasons - helping humans - then even if your list is in the freaking hundreds, 50, 100 and 500 folks will open your emails and buy your products and promote you, and money will flow in steadily.

      Thanks for sharing.

      Ryan
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    • Profile picture of the author anayb
      Originally Posted by Tom Addams View Post

      List building isn't so much about the immediate sales; it's about the ongoing relationship you build with your subscribers, ...

      Tom's post may help you think about your overall list building strategy to a whole new different perspective. In fact, its the essence/motto of list building. You build and nurture your list to attract/reach more audience ORGANICALLY. Your list like, share the content you email them on a daily basis, thus reaching to a greater audience pool. You need a blog/website to effectively manage your list.

      You can make immediate sales out of your list as well, but it does involve more complex marketing techniques. You need to test them out which ones work best for you. You can find them out by paying close attention to monetization strategies used by some big-shot companies by subscribing to their newsletters. You have to reverse engineer yourself how they make money out of their subscribers, no one can fully help you on that.
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  • Profile picture of the author ryanbiddulph
    Hi MJ....." hypothetical".....

    Ryan
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  • Profile picture of the author DeadRooster
    Originally Posted by mjoet3324 View Post

    Can someone explain to me how list building can be as profitable as everyone claims?
    You're looking at list building in isolation when it's only one part of your online business.

    If you were building a fancy hotel and ran the numbers the way you did, you wouldn't want to build hallways because they don't make any money.

    The first goal of list building is to break even on your ad spend.

    In other words, when someone opts in you immediately show them an offer.

    Let's say I run an ad to get a free report on how to potty train your kitten.

    Once they opt-in, instead of a standard "thank you" page, you show them a page like this:

    You're in! You should receive the download link for your free report shortly

    While you're waiting, check out this awesome video on how to communicate with your cat


    Underneath that headline you show them an image that looks like a video. When they click it, they're transported to a video sales letter for an affiliate product.

    Now, I'm not saying the exact idea above would work for you to break even on your ad spend... I'm just using it as an example. But, you get the idea.

    Once you tweak things to break even, you've got a list in which you can sell things to over and over again every month. THAT'S where the profit comes in... and, it's monthly income.

    You now "own" that traffic.

    Yes, you will lose some subscribers over time, but if you're continuously building your list - and, why wouldn't you as long as it's a break-even situation - your list will continue to grow and you'll make more and more money each month.

    Also, keep in mind that scenario is for an affiliate marketer who wants to build a sustainable business. It works even better if you're promoting your own products.
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  • Profile picture of the author DIABL0
    I've been monetizing data (email) for over 16 years.

    Also, I for the most part promote PPL(pay per lead...lead generation) offers. This is because there is no credit card / purchase required. All a user has to do is fill out a form. So conversion rates are typically much higher compared to offers that require a sale to be made.

    For me, it's all about how quickly can I break-even on my data acquisition costs.

    Then it's just a matter of collecting the openers/clickers, segmenting and removing the unresponsive users. As you test different offers on the front and back-end and find the winners and your list continues to grow, conversion momentum will start to kick in.

    Where by you are basically building a back-end follow-up process. As your list gets bigger and bigger there are more users to put through the process. Which your conversions will start to become fairly consistent and ROI grows.

    Which for me I just loop the process. In which after a user goes through the process, they go through it again and again and again. They get looped till they either unsubscribe or they become unresponsive for X amount of time and get removed.

    If they do get removed, I will typically let the data rest and retest it later and see if any become responsive again. Or if I get a new offer that I put into the mix, I may test it, since it has never been seen before.

    The reason that the above works is because I'm just generating leads and everyone's situation changes over time. So while a user may not be interested in offer A today, next week, next month, 3 months, 6 months, etc... their situation may change and they become interested.

    Additionally, I favor lead gen offers that have a make, get or save money benefit to them. This is what has overall worked the best for me and tends to have the greatest amount of mass appeal (will be of interest to a large general audience). So the potential exists to produce high volume and they are fairly easy to cross promote on the back-end. Which helps make the conversion momentum possible.

    Anyway, that's my 2 cents.
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    • Profile picture of the author mjoet3324
      you say you use PPL instead of affiliate products as your immediate income option. if people input their email for your list, are they then likely to immediately input their email for a PPL offer?
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  • The most important thing about building a list is that until you do you don't have a business, all you have is a job where you are required to sit behind your computer everyday all day and constantly promote, promote, promote.

    You have obviously been around for long enough to learn some of the terminology associated with internet marketing. Now, if you have been paying attention and have purchased internet marketing products you should have noticed that virtually every internet marketer concentrates on building their list first and foremost using lead magnets. Then they either present them with their own offer or an affiliate offer to monetize them.

    The goal being to build their list and create their own push button economy if you will. As long as you treat your subscribers with respect and always provide exceptional value the bigger your list gets the easier it will become for you to generate income by simply sending an email.

    Sure you'll have some people unsubscribe, you can't worry about that and sure some people will sit on your list and never take any action they'll just absorb your free information, training and products and that's okay to.

    It's the buyers, the action takers that are the lifeblood of your business, but in order to harvest those buyers you must sort through the entire crop of subscribers and since you don't know who the buyers are initially, you must treat them all accordingly.

    You also need to realize that while a subscriber may not be a buyer now, as long as you continue to provide exceptional value they potentially can turn into a buyer at any time. There are many factors that can impact why a subscriber is not an action taker: haven't yet become serious enough about their business to decide on a course of action and see it through, lack of available funds, their focus is on a different aspect of the internet marketing process at this time. Just to name a few.

    I hope this helps.
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  • Profile picture of the author Tenzho
    Keeping a list is good as you can have unlimited source of traffic. But don't bombard them with affiliate offer, provide them with value first. Engage them with high quality content and build trust and rapport between your reader and you. After that you can recommend them a good product with your affiliate link.

    I believe a newsletter series written by exceptional copywriter is vital in converting your list into buyers. So you need a good headline and a reason for them to click your links.
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  • Profile picture of the author fratt55
    Heythere

    its very profitable..
    its like money in the bank
    when you have a good list
    just mail your content to that list
    then
    sit back and reap the rewards

    talk soon

    sam f
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  • Profile picture of the author jords16
    But remmember you can promote other products to your list.
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  • Profile picture of the author fratt55
    hey there
    yes ..its profitable providing you have some good content to sell and that you are willing
    to be persistant

    sam f
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