After writing 100 issues of The Sizzle, I think it’s time for me to reflect on what I’ve done, assess how it’s going and plan for the future.
I love writing The Sizzle every weekday. Since wrapping up One More Thing back in 2013, The Sizzle is the first thing I’ve gotten stuck into that I really enjoy. I get paid, to read and write about a topic I’m deeply interested in and fascinated by – how can I not love it?
Best of all, other people really like The Sizzle too. Just check out the awesome feedback I’ve received. Totally unsolicited comments. People enjoy it that much that they went out of their way to let their friends know about The Sizzle. Most of them are practically strangers and the vast majority, I’ve never even met.
From a personal fulfilment point of view, The Sizzle is a winner – but enjoying the smell of one’s owns farts doesn’t pay the bills. I’m not that independently wealthy that I can sustain sinking hours a day (currently takes me around 3-4 hours of reading and writing to compose an issue of The Sizzle) into it for what is currently working out to approx $8.50/hr. I need to grow The Sizzle’s audience to make what would be considered minimum wage here in Australia: $657/week.
The good news is, I think that’s totally possible. It’s possible for me to make minimum wage, doing what I love, sitting at home in my underwear. The purpose of this post is to explore how to grow The Sizzle to reach an income of $2850/month after expenses and before tax – the minimum wage in Australia and enough for me to say to people “yes, I make a living doing this”.
Let’s look at The Sizzle’s (very simple) finances, starting with expenses:
Mailchimp (for sending the newsletter out) – $14/m
Moonclerk (for handing the recurring subscriptions) – US$9/month (AU$13)
Vultur (hosting for The Sizzle forum & website) – US$20/m (AU$27)
Domain name (thesizzle.com.au) – $1/m ($24 for 2 years)
If I grow the list to the rate I need to make the minimum wage, Mailchimp costs $21/m and Moonclerk will be US$30 ($41). Even then, my monthly expenses won’t exceed $100.
Now, my income:
157 subscibers @ $4.61/month (after credit card fees with Stripe)
Total profit is $668/month. $2,182 away from the target. As you can see, income is $4.61 per subscriber, per month and the target is $2950/month ($2850 minimum wage + $100 expenses). This means I need at least 640 subscribers. I already have 156 people paying me, so that works out to 484 new subscribers in order to meet the minimum wage target.
Now this is the hard bit – how do I get 484 new, paying subscribers? That’s what I need to work on – strategies to get 484 people give me money for The Sizzle, every month.
The Sizzle’s customer acquisition strategy (aka how to reel in the punters) is simple:
– Get people to visit The Sizzle website
– Once at the website, sign up for a free trial
– When the trial is over, get them to pay
The challenge in getting more paid subscribers is converting them from interested people at a website, to signing up for the free trial, then converting them to paid users when their free trial is over. Here’s some stats on current conversions:
1704 unique users visited The Sizzle website in 2016 so far. In 2016, 59 people signed up for the free trial. So going by this, I can roughly estimate my website to free trial conversion rate is 3.46%. No idea if that’s good or bad.
The next conversion is getting those people on the free trial, to pay me for a subscription. This conversion rate is much healthier. Again, since the start of 2016 to now, of the 59 people that signed up for a free trial, 23 of them are now paid subscribers. That’s a 39% conversion rate.
This shows me that once people know what The Sizzle is after having experienced it for a week, they’re pretty likely to give me money. My marketing should focus on explaining what The Sizzle is and showing it to people so they can get into the trial and let the product (the newsletter) speak for itself.
I could focus on improving the free trial to paid conversion rate (particularly with following up with those who don’t subscribe), but I feel that if they’ve seen the Sizzle for a week and don’t decide to pay, they’re relatively a lost cause. I don’t wanna be that guy that harasses you after you say no in the off chance you simply forgot or ran out of time to subscribe, when really the most likely reason you didn’t subscribe is ya just don’t want it. I hate those follow up calls from banks and insurance companies, I don’t want to do it to others.
So – how to get those sweet sweet leads? What the fuck is a lead? A lead is someone who signs up to the free trial. I pay money/buy something, then you/someone/something directs users to my website and a user signs up for free trial. That, is a lead. All my market efforts should focus on how much a lead costs.
Before I even look in to what marketing and advertising options are available to me, I should work out what a lead is worth to me. Is it smart to spend say, $100 for a lead when they might not even convert into a paid subscriber? I can work this out using the conversion stats from earlier and what my revenue is.
If I assume that my current 39% of leads turn into paid customers stays true, that means that for 2.564 leads, I’ll get one paid customer. If a lead is $1, I’ll need to spend $2.564 to get a paying customer. If a lead is $5, I’ll need to spend $13.20 to get a paid customer.
To put it another way, how many months do I need the paid subscriber to stick around in order to get a return on that investment? If I’m happy to wait say, 3 months until I get my money back for what I spent to get that customer, a lead is worth $5.39 to me. But if I decide that 6 months is a worthwhile time to wait, that same lead is worth $10.79. General theory is that the more you spend on getting leads, the more likely you are to get them.
This is key to any money I spend on promoting the Sizzle. If I’m spending more than what a lead is worth to me on a campaign, then I am wasting money and will have to wait too long for the cost of that campaign to be recouped. Making the best use of the limited money I have is smart.
Of course, this assumes the conversion rate from trial to paid stays the same. The current 39% could be a fluke – it could be because the people finding out about The Sizzle tend to already know me and kinda know what they’re in for. If I had 1000 total strangers with just a passing interest in technology on my free trial list, I don’t know if 39% of them would start paying. If my conversion rate halved to 20%, I suddenly need 5 leads to generate 1 paid subscriber. Instead of a lead having a worth of $5.39, it’s $2.77.
With those lead valuations in mind, I’ll write up another post with some actual things I might spend money and time on as to get more subscribers to The Sizzle. By the way, if you want to subscribe to The Sizzle, do it! Visit https://thesizzle.com.au and sign up for a free trial.