Why You Must Track By Subscriber Source and Revenue
Let us assume that you have a campaign that nets you 1000 subscribers, costs you $100 dollars, and one of those subscribers buys something from you for $20.
Now assume that another campaign nets you 100 subscribers, at the same cost of $100, but 10 of those new subscribers buys something from you for $20 – for a total revenue of $200.
Which of these campaigns was more effective?
The answer is easy – the one that netted you $200, not the one that netted you $20.
But if you did not know which campaign each of the buyers came from, you might only assume that you made a net profit of $20 on both campaigns combined – and possibly assume that both campaigns were equally unprofitable. You might even make the far worse mistake of assuming that since the first campaign brought you 1000 subscribers, that the bulk of the revenue was from that campaign.
So you can see that it is not important how many subscribers, the conversion rate of the subscribers, or any other number of things that are un-related to revenue.
The only thing that really matters is the net revenue.
So you need to know only two things – where each buyer comes from, and how much they spend. That is all you really need to know, in the long run. Sure, conversion rates are cool – squeeze page conversions are nice to study, seeing 100’s of new subscribers come into my campaigns daily is cool – but none of that really matters.
To give you another example of this, my benchmark at one time with my list was that every email I sent out would net me $100.
Some days I would run these stupid campaigns where I would offer some crazy product for $5. I might get 200 hits to the sales page, and sell 20 of these $5 items – for a 10% conversion rate. That conversion rate was pretty cool.
But I remember the day when I introduced a $47 product that got about the same number of hits – let us say, 200. And I sold 4 of the $47 product, for a total of $188. Now, my conversion rate dropped to 2% from 10% - but my income almost doubled.
So it is important to look at the bottom line when making decisions – the percentages and tracking statistics are cool – but they don’t make you money on their own.
