Running the Numbers – Email Marketing
Almost everything we do in internet marketing can be broke down in average numbers which gives us the ability to see if an offer is worth the time or money it takes to use the offer. This also helps us to determine the quality of the advertising source we are using.
In today’s technique lesson we are going to look at email marketing and how understanding the numbers can help you be successful.
First you need to understand that there are many many factors involved in any type of marketing. For instance if you are brand new to internet marketing and no one has ever heard of you, you will get a lower response rate than someone who has been around for years and is well known in the industry.
The individual program you are promoting can have a lot to do with your success. If you are marketing a program ran by someone who has been known to scam in the past, there is a good chance they will do it again and those who have been in the industry for a longer period of time will ignore your marketing efforts because of the program you are sending.
Of course the quality of your advertisement will also make a difference in the results you are getting. If you are sending prospective clients to a website that appears to have been designed by a 10 year old, you will not get as good of results as a site professionally prepared will get.
There are of course many other things that can and will affect your results, which makes it impossible to choose any one “magic number” as the goal you are reaching for. Yet there is a sort of “unwritten” average within the email marketing industry that gives you a good starting point for determining the success or lack thereof of any individual mailing.
In general for every 1000 email you have sent out to a completely cold list, (people who do not know you) you can on average expect about 30 of those 1000 people to actually open the email.
So if purchase a solo email to 5000 people and only get 10 clicks on your link, there is a good chance the site you are working with has padded their numbers in so fashion because you should expect approximately 150 clicks out of a mailing to 5000 members.
Of course the opposite is true also, if you send a solo email to 5000 and receive 500 clicks, there is a possibility it is a very good list. At the same time however, there is also a possibility the site is forging the numbers to make them look better, so do not allow this one test to be your entire reason for choosing a site, you always need to look a little deeper.
Converting to Sales/Joining
The next step to gauge is the number of actual sales you get from the advertising. Again the numbers can vary greatly depending on many different factors, but on average you can expect 1 person out of every 100 who actually look at your site to purchase something or join the program you are promoting. When we convert those numbers out, it means that on average you can expect approximately 1 sale/signup our of every solo 3333 emails sent.
Were most people make a mistake in their numbers is when they mail a set number of emails and don’t immediately get the set number of sales to correspond they move on to the next site. A single mailing however, will never be a good test of the effectiveness of the site. It is entire possible to mail to 10000 members and not get a single sale, yet mail to only 1000 in the next mailing and get 5 from that single mailing. You can not average numbers over a single set of trials, it is only by repeated trials that you can determine the effectiveness of an advertising source.
Cost & Time Effectiveness
To make this section a little easy to understand I am going to use a real life program I am a member of.
ListQuik is one of the larger mailing lists and currently has about 11500 members. As a free member, you can mail to 200 members every 3 days or you can upgrade at a cost of just $8.91 a month and mail to 1000 members every 3 days. Lets use our averages shown above and apply them to these numbers and see what happens.
Mail to 200 every 3 days.
Since the average is 30 people physically looking at your site for every 1000 emails sent, if you can only mail to 200 at a time, you would have to make 5 mailings to get a full 1000 piece mailing or about 30 views.
Since it takes about 3333 emails to convert to 1 sale, you would have to mail 5 x 3.3 times or approximately 17 times to get 1 sale. You can only mail once every 3 days so to mail 17 times would take 51 days for a single sale.
To put it plainly, that just is not worth my time to make it happen. I would rather pay for a solo that wait 2 months between sales for this one site.
It all changes at the $8.97 a month level.
At that level you can mail to 1000 members every 3 days x 3.3 equals approximately 1 sale every 10 days. So over the course of a month, if you mail every 3 days like you are allowed you could expect to make approximately 3 sales during that time at a cost of only $8.97, making your cost per sale only $2.99.
That is less than the price many places charge for a single solo and well worth it in my book. List Quik at the $8.97 a month level offers a good value for your money.
Can we compare the actual costs of the two options? Of course we can. Lets assume it take approximately 10 minutes to place a single solo ad. In order to make 3 sales as a free member, you will need to place 17 x 3 = 51 ads, versus 10 ads placed as a paid member.
That means 51 x 10 = 510 / 60 = 8.5 hours of your time placing ads as a free member.
10 x 10 = 100 / 60 = 1.6 hours of your time placing ads as a paid member to get the same number of sales.
Figuring your time is worth a lousy little $10 an hour, your total cost to produce 3 sales as a free member would be $85.00 (8.5 hours x $10).
As a paid member is would cost 1.6 hours x $10 = $16.00 + $8.97 = $24.97 to produce the same 3 sales.
So not spending money could be costing you more than actually spending a few bucks. You simply have to run the numbers to find out where the true costs are at.
This entry was posted on Saturday, January 7th, 2012 at 12:00 pm and is filed under Training Articles. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
