Jan
31
When the Money Isn’t in the List: The Case Against Freebies
This is a guest post written by Susan Daffron. Susan owns a book publishing and consulting company called Logical Expressions, Inc. and spends most of her time writing, laying out books in InDesign, or taking her five dogs out for romps in the forest. Susan also teaches people how to write and publish profitable, client-attracting books at SelfPubU and puts on the Self-Publishers Online conference every May.
The other day, I did something that almost everyone in the online marketing/solopreneur realm says you shouldn’t do: I killed the email lists that I have spent the last three or four years building.
For years, I have given away free content to entice Web site visitors to join an autoresponder or email newsletter list.
Almost everything you read about marketing online says you should give away a freebie in exchange for someone’s email address. The idea is that you build up a list and then you can market your products and services to the list.
It sounds like a great idea. Except for me, it didn’t work.
I gave away white papers, free reports, ecourses, FAQs, newsletters, and case studies on my sites. I had autoresponder sequences and PDFs jam-packed with unique well-written content.
Even though readers said that they loved my writing, loved me, and “told other people” about me, I have no evidence that any actual money or clients resulted from sending out autoresponders or regular weekly newsletters.
Somehow I managed to create a list of thousands of people who only want free stuff. In this case, the money was definitely NOT in the list.
It’s not like I didn’t try to increase the response rate of my emails either. Over time, I surveyed, revamped, personalized, engaged, changed the format of the emails multiple times and still nothing. It wasn’t just a small response to my offers; it was virtually NO response.
Basically, I have lived everyone’s worst business nightmare. You do a ton of work for a long time and absolutely nothing happens.
The free email content also didn’t affect my online “influence” in any way I can tell. It didn’t result in making key contacts, media attention, speaking engagements, thousands of followers/fans, or had any other real impact as far as I can tell.
The fact that emails to my list resulted in zero sales also mystified more than one business coach/consultant.
Of course, I didn’t just opt to kill years of painstaking work without thinking about it for a long, long time.
Is This Online Marketing Suicide?
After a lot of angst, I realized that it’s a waste of time for me to continue keep trying to make something work that won’t. Einstein is credited with saying that the definition of insanity is doing the same thing over and over again and expecting different results.
Doing a lot of work and not making money is pointless. I finally realized that I’d rather have a small list of interested people who actually buy stuff, than a large list that does nothing.
A few people called me silly or nuts for killing my email lists, but my readers didn’t. When I sent out the email that explained why I was killing off my newsletter, I got a lot of really sympathetic, kind responses from my readers.
Every single one of them said thank you, but interestingly the responses with the most thoughtful and insightful comments came from people who have either purchased something from me, met me in person, or participated in some type of group or event with me. They found me some other way, bought something, and then joined my newsletter.
In other words, the newsletter did not get me clients, but quite a few clients read my newsletter.
As it turns out, when I looked more closely at where my clients really come from, it’s mostly from personal referrals and search. Online marketing comes into play, but it’s the content on my Web sites (not in my emails) that brings in the leads that result in real live paying work and product sales.
The Value of “Free”
We sell our own books and offer conferences and training for people who want to write and publish their own books as well. It seems that at least in this market, people don’t value free.
Although almost everyone says they want to write a book, the reality is that almost no one actually does. Gazillions of wanna-be authors will never, ever do anything. They are not my customers. Thinking that they could become my customers was my mistake.
Realistically, idle dreamers can consume free stuff forever, without actually ever doing anything with the information. In contrast, those people who are motivated do spend money to solve a problem and move forward. Asking for money acts as a filter.
Another online marketing truism is the concept of “know, like, and trust.” The theory is that if you give away free stuff, people will be more inclined to buy from you. I got countless “love notes” from my readers, but when they were asked to buy something, they said they “couldn’t afford it” no matter how inexpensive. These people are clearly not my customers.
I’m starting to think that “know, like, and trust” is basically a bunch of hogwash. Realistically, it’s easy to do a search online and buy from companies I’ve never heard of, didn’t know, don’t like, and don’t really trust. But if they have something I really want that solves a problem, I’ll buy anyway.
What’s Next?
Now that I’m no longer fretting about my non-responsive list or creating a newsletter every week, I’ve thought about how I can use email more effectively in my business. We already have a lot of products, but we have done almost no follow-up with any of our customers.
Instead of focusing on existing customers, I was focusing my time on trying to get new customers. This classic business mistake has probably cost us a lot of money.
Our new plan for email is to focus on follow-up and cross-selling. We have decided to switch our email autoresponder service from AWeber to MailChimp. What we’re planning to do isn’t actually possible with AWeber, so after many years, it’s time to bid them farewell.
Instead of one large list of prospects, we are setting up a much more detailed plan. With one big list, you run the risk of people becoming burned out on your offers. I don’t want to go down that road.
Instead, by segmenting your lists by what people buy, you can send a friendly post-purchase email that is relevant, says thank you, offers some additional helpful free resources, and then says, “you might be interested in this too.” You won’t be branded a spammer or a sleezy marketer.
Getting all of this set up is going to be a lot of work, but I’m hoping that it will result in more income over time.
The more I’ve thought about it, the more I’ve come to realize the difference between buyers and prospects. Buyers have made a commitment by opening their wallet. Prospects haven’t.
So from now on I’m focusing my attention on buyers. Wish me luck!
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Comments
Susan, good for you for taking this big step. We’ve communicated about similar matters before, and I know you are a very knowledgeable, hard-working person who really is an expert in book publishing.
We all need to evaluate our business models periodically, and it sounds like you are doing what you truly feel you need to do.
Susan, thank you for this timely and thought-provoking post! I love posts that share personl experience. My email marketing has been anything but a bust also. If email marketing is dead for your business, are you getting in front of new clients in a different way? I didn’t see any mention of SM platforms (nor did I see them on your website) and am curious to know if you will be utilizing them in the future. Also, I’m curius why you’re switching from Aweber to Mailchimp…are the functionalities different?
Thanks again for the candor!
When I saw you mention killing your lists on Twitter, I wondered what was up! Now it makes perfect sense.
How & when free/cheap works, and when it doesn’t, is something I’ve been thinking on a lot, lately. I suspect it’s influenced by a lot of things, including the target market – aspiring writers seem exceptionally cheap. I don’t know why, but it happens to me when I put on the writer hat, too.
My own puzzling cheapness aside, you’ve provided lots of new thoughts to follow here – thank you for openly sharing your error and correction.
@John – Thank you! And yes, I completely agree that you have to look at what’s working AND what’s not. As I recall, you wrote a great post recently about looking at how you are spending your time. I did
@Rob – Actually, I am on social media and I didn’t mention here that when I sent the email to my lists, I pointed out all the ways they can still connect to me on social media and via our Web sites for free. (Please feel free to friend/follow me on FB, LinkedIn and Twitter by the way!) I’m also upping my article writing again for my own sites and seeking out guest posts like this one. (Thanks Larry!)
The reasons we’re moving to MailChimp are a bit nerdy, but basically, it has an API (application programming interface) that we can tie into which makes post purchase follow-up possible. It’s impossible to do that type of thing seamlessly with AWeber, partly because of the double opt-in rules and partly because they are “developer unfriendly.”
@Tori – I completely agree that it depends on the market. I’m not suggesting that everyone bail on email marketing. The concepts are sound and it works as advertised for a LOT of people in a big way. Unfortunately, it didn’t work for me in my market and I’m guilty of sort of blindly doing something for too long because “it’s supposed to work.” When something doesn’t work, it’s really easy to assume the problem is YOU. And that might not really be the case. You can do everything “right” and get a whole lotta nuthin’
Consider your audience… Authors who are looking to self-publish? Of course they’re not going to buy; they’re broke and they’re trying to get a book published as cheaply as possible.
A business has two things. Something to sell, and people who will buy.
Rather than marketing harder, do you believe that you can increase your results by attracting a market who is willing and able to pay for what you have to offer?
Personally, in January, I closed $2200 from email marketing–and that’s JUST from my list of TWENTY FIVE blog subscribers.
The magic is in building a list of people who will pay for what you have to offer. That’s not a web marketing tactic. That’s business common sense.
This makes a lot of sense. I’m seeing a lot more “sign up for the advance discount list” or similar. I see this as “raise your hand if you’d consider actually *buying* something from me” – and I’d rather have a small list of those people than a large list of “here’s the email address I never use in exchange for your free report” people.
I really appreciate you sharing your experience. Thanks so much. I hope your new approach works well for you (and I suspect it will pay off in spades.)
@Rob, those are amazing numbers, congrats. What are you selling and who’s buying?
I love this!
A case like this is exactly why I’m such a big fan of testing and experimentation and not such a big fan of “best practices”. There is almost never a one-size-fits-all solution.
That’s why it’s so so important to try things and if they aren’t working, do something else. Find another audience. Try another route to connect with people, etc. I like the suggestion that Rob Laughter makes above about attracting the right market.
Just because someone says you have to do this or that doesn’t mean it’s the right thing for you, your business, and your potential customers.
Thanks for being so brave and for sharing your story with us!
@Rob – What Larry said. I’m curious too. As for saying there is no money in self-publishing, you couldn’t be more wrong. Dan Poynter and countless others have been earning a living from marketing to self-publishers for many, many years. Companies like iUniverse EXIST because countless numbers of people want to publish a book. Look at the cost for PPC terms related to self-publishing, if you need more proof. Just because email marketing didn’t work for me doesn’t mean there’s no market. The whole point of the article was to say that just because all the “gurus” say a marketing tactic HAS to work doesn’t mean it will for you.
@Patty – Good point on the advance buyers list. I’m seeing a lot of that too. It is definitely more interesting to me to have a list of people who have given you some inclination they might buy.
@Naomi – as noted, I did testing on the various elements of the newsletter, but didn’t look at the big picture (should I even do this at all) until recently. I totally agree that trying out new things is vital. It’s human nature to want to stay with the safe and familiar, but the same ole, same old probably isn’t as safe as might seem.
My approach:
Offered up some half-hour free coaching gigs to help them solve business problems that they were struggling with.
This is a freebie that WORKS. It takes a lot of investment on THEIR part to 1.) accept the offer, 2.) get on a phone call with you, and 3.) make a commitment to solving the problem. On top of that, I don’t offer any freebies to get on my list, so the folks who DO subscribe are all there specifically because they know me, like me, and trust me.
Digital downloads cheapen the experience, IMO. They join the list just to get the freebie. Sure, it can speed up your list building process, but you’re likely to run into the same problem as Susan. On top of that, you’re training YOURSELF to believe that the way that you get subscribers is to bribe them, rather than creating excellent content that people actually WANT to subscribe to.
Anyhow, with a firsthand taste of what I had to offer, 4 out of the 5 people hired me for business. 3 of them were for coaching, one was for a quick web design project.
I spent 2.5 hours of my time to generate $2200 in new business. Most bloggers spend 10 or 20 hours creating a free download that generates NO business.
My point: think differently. Don’t assume that the tactics that other marketers are using actually work, and if YOU don’t get results, try something else.
@Susan It’s your niche, so I’ll yield to you. I was just taking a stab in the dark
There are different calibers of self publishers, I’m sure. How can you identify and market to those who are willing and able to pay?
What do they need? What are they looking for? Get inside their heads.
@Rob – thanks so much for sharing what you’re doing! I (now) agree re: digital downloads and LOVE your approach. Almost everyone I get on the phone with hires me too, so that makes a ton of sense. Do people find out about the free consultations via your Web site?
And yes, I’m working on figuring out who the self-publishers are that are willing to pay. Most of my (paying) clients are entrepreneurs who have an existing business and want to use a high-quality book to attract more clients. So that idea is a more prominent part of our marketing message now. The good thing about marketing to business owners is that presumably they have money from the biz to pay for producing a decent book (as opposed to iUniverse drek). The bad news is that “business owners” is a big group and can be somewhat hard to isolate.
Susan,
First, it takes a lot of guts to realize when something is not working and to actually do something about it. You took a bold step and that’s really commendable. It also takes guts to share what you’ve done — I’m learning a lot from your example and I thank you for that.
I think it’s easy for a lot of people to say that cutting a list is a dumb thing to do because it defies conventional wisdom, but most of us set out to be solopreneurs because that which is conventional isn’t working for us.
Kudos to you and many thanks for sharing.
I was elated to read this post because it corroborates my thoughts on list building and the over-abundance, often misconception of “freebie selling”. Consequently, I’ve gone through a purging of sorts as well, and it’s been extremely useful. Following traditional strategies was counter-productive for me, and just didn’t result in many benefits, if any at all. To me, depending on the manner in which freebies are used, they can actually de-value or diminish one’s offerings and influence.
After changing my mindset about email marketing and how it relates specifically to my community, I could better focus on the connection with those willing to engage; and those who found value in the information provided.
I should point out that I’m not anti-freebie at all; in fact, I continue to offer freebies through my site. However, they’re not used as a lure to sell; as a result I have fewer unsubscribes and consistent open rates.
Thanks for pointing out this issue and sharing your experience – glad I’m not the only one!!
@Beth – HA, good point! Being a solopreneur pretty much means you’re at least a little bit unconventional
@StilletoCEO – No, it’s definitely not just you and I’m not anti-freebie either. I think the key is how the freebie is used like you said.
Ooh, Excellent discussion and post!
So my first thought: “Oh how cool. That must feel extremely liberating!”
A few months ago I thought I needed to create something free to get more people to sign up because that’s what all the smart internet marketers are doing and telling solopreneurs to do! (I was having a major case of the sign up for every internet marketing workshop-itis) But I really struggled with exactly what to give away for free so I haven’t done it.
I totally agree with @Rob Laughter about the free consult.
A couple of months ago, I started offering 1/2-hour free consultations with anyone with a burning question; even if they didn’t meet my “ideal client description”. Why? Because you just never know and I find that the experience is much more real. Email, SM et al is great but a voice on the other end is gravy. At the end of the conversation, I ask if I can put them on my list and I’ve had some ask if I had a list!
Timebridge helps a lot with this!
@Rob Place, @Susan Daffron ~ What I love about MailChimp is the nifty RSS to Email function which makes things more seamless for a time-starved person. I’m working on moving from Campaign Monitor. And yea, agreed Susan on the MailChimp API. They’ve been very developer-friendly since they launched!
(btw — I hear infusionsoft is better than aweber and I think its pretty spendy?)
@Deb – Liberating? You betcha!
Thanks for sharing your experiences. More personal connection is in the cards for us too. We do an online conference every year and have received a huge amount of feedback from people about how much they loved having a voice to go with all the articles they’d read. If I can muster up the guts, I’m also going to try doing some video. (I want to shoot them outside, but it’s been too dang cold…watching my teeth chatter isn’t anyone’s idea of fun!)
InfusionSoft is $300/month the last time I looked. I checked out out and it can do amazing things, but it’s complex to learn as I understand it. I plan to take advantage of the MailChimp RSS to Email feature on a few sites too. We just have SO much to do to get everything set up. It’s a bit daunting.
Hey, @Susan. One more thing to think about is what you can do to nurture your existing subscribers to paying subscribers. Ramit Sethi from I Will Teach You To Be Rich is the MASTER of this. He’ll give his readers so much value that they can’t help but buy his stuff (and he’s very open about what he sells).
Check out this post: http://www.iwillteachyoutoberich.com/blog/how-to-stand-out/
Hey Susan!
I think you hit the nail on the head when you explain that the people on your list just weren’t your customers. No matter how big the number, you obviously know in your hear that they can’t be trained to be your customers either. Now I get the sense you have more clarity and focus about who you want to target and I think that will be fantastic for you. Good luck!
Hi Susan,
I have a similar problem, so I understand where you are coming from. I find it hard to differentiate between “audience” and “market.” I am writing toward higher ed professionals and college students, and they are used to a lot of free resources and advice. But I want to sell them on the value of working with me as a coach, and there is a substantial amount of “sticker shock” people get when moving from free information (which they hope to somehow put into action by themselves) and valuable, personalized information, along with the accountability (and cost) associated with coaching. (i.e., the price of getting real.)
And I also know that I am one of those people you’ve interacted with who is straddling the fence between “dreaming” and doing, and have been reluctant to pull the trigger on some things I know I need to get where I want to go…like book coaching.
It’s a stark reminder that you need to follow the money when you want to follow your passion. You’ve gone to your audience with a remarkable amount of authenticity and said “I have to make this work for me, or I can’t afford to do it.” And then you’ve followed up by letting them know that you have to make a living and that they are always welcome to come to you when ready to commit.
It’s a brave move, but I think you’ve taken it smartly, by explaining to your “audience” that you need a “market” to stay in business. Every person on your outgoing list has a choice to make…between being a dreamer or a doer, a window-shopper/tire-kicker or a buyer.
The only question I have for you at this point is whether you gave your list members any easy points of entry to stay with you. For example, do you have a couple of offers at different price points that would get people to come off the fence and buy something (anything?) to get on your new list as a “buyer?” (Because people who have bought anything from you and been happy with it are more likely to buy again.) If not, maybe it’d be a good time to put a couple of things out there, or to announce an upcoming product or service. Just a thought.
Best of luck with all of this.
Sean
@Rob – Excellent point. Thank you for the link. That’s part of what we’re switching around. Although I didn’t explain it in detail, I have many (many!) things I’ve written as freebies. The long range plan is to take that content and make it low-cost entry points. As for free, I’m making a renewed commitment to posting more on our sites. I think probably every writer has realized at one point or another, being depressed about something isn’t good for productivity. I feel much better now and have been writing a lot more again
@Amy – yes, you’re right. And from the responses I got to my “goodbye” email, my intuition was correct…they really were NOT my customers. A few people even said, “oh I’m not writing a book.” (Making me wonder…”then why the heck did you subscribe?!”)
@Sean – I don’t think I mentioned this in the article, but yes, in the final email, I gave people one last opportunity to engage. I created a $27/month Book Authors Circle, which is a mastermind/Q&A type group with me that starts in February. As an aside, let me know if you want more info about that
In the email, I said, “if we don’t get 10 people, it doesn’t go, so there’s no risk.” However, enough people have signed up, so I’m going to run it. These are people who are actually a) working on either writing or marketing a book b) ready to make a commitment to the process. Even more interesting, most of them are either existing customers or have had one or more personal conversations with me, so I know them pretty well. As I mentioned to Rob, I’m also developing some even smaller targeted “solve a problem” type products. Then the follow-up emails will introduce people to some of our other offerings.
You’re welcome! Thanks for commenting
Hi Susan:
Good luck!
Best regards,
Well, I’m a doer rather than a dreamer — but I certainly appreciate Susan’s points because, ugh, I enjoyed her newsletter, received practical, implementable advice, but when it came time paying for some real coaching services, I used someone else!
My book has certainly been successful — validating all those “why you should publish a book” arguments. It has led to speaking engagements, increased sales for our overall business and (a cool side effect), meaningful direct revenue for actual book orders, which continue month after month. Susan’s resources led me to smashwords to solve the problem of the diversity of electronic publishing distributors — and I received my first Paypal payment from Smashwords a few days ago for orders from around the world.
The “free vs fee” issue about marketing, credibility and reputation-building is a challenge for anyone in business. It is clearly wise to stop doing stuff that takes energy and effort and doesn’t bring in any money. As for my own e-letter, I’ll continue it for now, but with a more thoughtful perspective its value in the scheme of things.
Mark, you aren’t the only person who has taken my free information and run with it. I know of at least 3 other people who have read articles or had a free consultation with me and then taken a DIY approach. (As an aside, I don’t do free consultations anymore either.)
In one case, a person attended our publishing conference for free, finished her book, then marketed a product positioning herself as a self-publishing expert afterward. Other people have actually taken almost verbatim, concepts in my newsletter articles. One person used one for the intro for her book, which was really annoying. (I ran across it when I did a Search Inside on Amazon…ugh.)
With all that said, I don’t have a problem providing free information to help people publish. Anyone can freely read my many articles and guest posts. I have believed in the concept of “content marketing” for years because that’s the way the Internet works.
However, now people are going to have to find the information via search. I’m not emailing it to them. And I’m not going to entice them to sign up to a newsletter to receive a freebie.
People search to solve a problem. That’s exactly what you did when it was time to hire a consultant. You didn’t think about the person that you supposedly had learned to “know like and trust” from two years of newsletters. Instead you found someone via Google. Proving my point that trying to market to freebie seekers and establish “trust” can be big waste of time.