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The Second Key to a Profitable Email Campaign

Remember, to make a campaign work we need to do a couple of things – the first is to build relationship.  The second is:

B. Generate Volume

One more piece is that you need volume.  If you have 10 subscribers on your campaign and 2 of them buy from you, that doesn’t mean you have a good email campaign.  That means that 2 people bought from you.  If you have 100 people go through your email campaign and 2 people bought from you, that doesn’t necessarily mean that you have a profitable campaign, it means that 2 people bought from you.  If you have 10,000 go through your campaign and 200 people buy from you, that probably means that you have a 2% conversion.  If you have 100,000 go through your campaign and 2,000 people buy from you, what does that mean?  That means that you have a 2% conversion rate on your campaign.

If you have big numbers, you can make a lot of inferences.  If you only have 100 subscribers go through your campaign and you get 15 sales, that doesn’t mean anything.  It means that 15 people bought from you.  For that time and number, 15 people is a variation.  The long term actual rate could be 3 to 30 (I always go on the low side).  Maybe with that you could possibly say that you have 3% in the long run.
Realistically, if you just have a few sales, it really doesn’t tell you anything other than the fact that you have a few sales.  The whole idea of mathematical formulas… wait, first let me give you an example:

We might say if we have 10 people go through your campaign and 2 of them bought something from you, that doesn’t necessarily give us confidence that that will occur in the future.  We may be at a 10% confidence level that this will again occur in the future.  On the other hand, if we had a 1,000 people go through our campaign and 30 of them bought, we’d probably be at a 90% confidence level that we could duplicate that in the future.

In another example, if we were to have 10,000 people go through our campaign and 200 to 300 people bought from us, that would bring us to a confidence level to about 95%-98% confidence level that this would occur again.

One of the biggest things that I hear from people is they’re starting something new or have a big list and they aren’t having great results yet.

They might say that they have had 100 people go through their campaign.  That’s not really enough to really be able to gauge that good or bad.

Another common mistake that I see is that people would put 100 or 1,000 people through a campaign with 2 to 3 sales.  They have a nice ROI, they’re making money, and they have a nice conversion rate.  They might say, “Ok, I have 100 people through this campaign so I’m going to spend $200,000 on a PPC campaign.”  Then they end up only making 1 sale and they end up losing their tail.  It’s hard to scale traffic to 100 to 10,000 without changing your source.  If you started out with PPC, then you keep going with PPC, even then, you probably started out with about 2 keywords, and you have 100 subscribers.  In order to get that to scale to about 10,000, what do you have to do?  You would probably have to add some keywords.  So, you add some keywords, if you haven’t tested these additional keywords, you have no idea if these new keywords are going to convert as well as the old ones.  You have to scale slowly.

We often find that people will say, “Well, I’m going to start out really slow, with just U.S. Traffic and three long tale keywords.”  They’ll probably have 100 subscribers, 3 of them buy.  You get really excited and decide to invest $20,000 in traffic.  You would include the entire world in your PPC and you go with 1,000 keywords.  They say it’s okay because they think, “I’ll just run analytics and find out which keywords are converting.”

This scenario is a disaster waiting to happen.  Why does this happen?  Why do people do this?  Well, people want the instant gratification, they want things to happen NOW.  What would be better?  Here would be the more effective scenario:

Same situation, you start off slow with U.S. Traffic, you have 100 subscribers and 3 of them buy.  At this point, you’re still very excited, however, instead of investing in traffic, you add Canada, the U.K. And Australia, and also 10 more keywords.  We’ll quadruple the amount of money you’re spending.  So, if you were spending $200 per month, now spend about $800 per month.  There’’s no need to throw out $20,000 all at once, that’s one of the biggest mistakes I see people making.

Scaling Your Email Campaign Scientifically
Two Factors that Make Your Campaign Really Work
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