In this post I’ll be breaking down how we segmented our email list at Examine.com to 6500 emails and used it to generate over $100,000 for a sale. At the bottom I’ll give you a little checklist you can use for your own sale.
There’s a follow up for the second year anniversary – Segmenting and strategizing to a $114,504 sale
Our Examine.com Research Digest (ERD) turned one year old last month. A high-quality subscription product at $29.99/mo, the team analyzes 8 recent nutrition studies in-depth and gives them clarity and context. My go-to phrase for it when describing it to people in health and fitness: “it’s like nothing you’ve seen before.”
Heading into the one year anniversary date, we had over 2000 customers. At the same time, we also knew we had potential customers that were ready to buy, but just hadn’t pulled the trigger. Based on a multitude of surveys (more on that for another day), we identified three primary reasons holding them back:
- Price conscious. The reality is that most registered dietitians (RDs) and trainers actually do not make much (in fact, the average trainer is just above the poverty line).
- Unrealized potential. Sure the sales page may breakdown why ERD would help them professionally, but getting them to that stage is not easy. We needed to bridge the gap between their every day problems and how ERD solves those problems.
- Lazy. Let’s not underestimate how lazy humans are – why buy right now when you can just buy later?
The sale, timely as it coincided with ERD turning one, would be positioned to solve all of those issues.
I should note that in general I’m not a fan of sales, but I do think that they can serve as opening up a gasket to release some pressure. You build up the pressure before the sale, and the sale pushes people over the edge to purchase.
PREPARING FOR THE SALE
Now – I’m not a fan of hammering our primary email list (roughly 125,000 people) with sales emails. Part of the Examine.com brand is that we’re high-brow – we rarely email (1-2x a month), and it’s usually information based. It’s why our open rates and click rates are well above industry average.
Thus, our approach is to segment our audience softly, and then pitch to that audience.
So we sent out two emails to our email list.
First, we sent an email directly stating that ERD was turning one next week, and we would be releasing an anniversary issue. This issue would contain 12 articles (ERD normally contains 8) so it would be supersized. We also mentioned that the op-ed was from Dr. David Katz, a well-known figure in health and fitness. We never mentioned a sale – just to click here to be notified of our special anniversary issue.
This first email was targeted at issue #2 (showing the value of ERD).
A few days later, we sent out a second email – a guide on “How to read scientific research.” It was awesome – well put together and very informative.
This second email was mostly targeted at #2 – it helped bridge not only how much other people did not know, but also why ERD was the price it was (we have over 20+ people contribute to each issue!)
It should be noted – we did not email the people who had already opted in from that first email.
We did simultaneously run both through our Facebook and twitter page, but those required more explicit optins.
Overall, we were able to collect ~6500 emails. Roughly ~6200 were from our original 125,000 people – which showed that ~5% were interested in the ERD at this moment. The rest came through social media (our “how to read scientific research” guide garnered quite a few shares).
The actual sale process was pretty simple. Once it was noon, we sent out an email to the 6348 who opted in. We explained why ERD was so useful to them, that it was a 24 hour sale price (we positioned it as our original launch price – which we had not used since we had launched), and that at worst case, there was an unconditional money back guarantee (this is where the strength of the brand helped – they could trust us that there was “nothing to lose”).
The open rate was a fantastic 46.4%.
Once the email was out, we made sure to put up notices on our own site. It boggles my mind when people do sales and totally fail to note the sale on their very own site! All of our pages had “24 hour Examine.com Research Digest Anniversary sale!” large buttons so that our day-to-day users would notice the sale.
With 12 hours left in the email, we emailed once more. We said hey – just a reminder, the sale ends very soon. We did make sure not to email the people who had bought already.
I would be uncomfortable emailing the full list so many times, but by segmenting, it allows you to email much more to people who have let you know they are interested in what you have to offer.
There was a final email – to everyone who visited the checkout page (but did not buy). Except this time we changed it up. Instead of our regular email (HTML and from “Kamal at Examine.com”), it was a text-only email from Kamal Patel (he runs Examine.com). It had no sales link; the email was simply and boiled down to “hey – I saw you were thinking about ERD, but I noticed you did not buy. Any reason?”
This last email is killer. First off, we know these are the most interested potential customers (they were ready to buy!) Furthermore, this email they get is straight and simple from the guy who runs the site.
We sent out roughly 40 emails. Three people responded and apologized for not buying it yet, and that they would buy asap (they did). Nine said it was not a good fit for them. Seven of them had questions (easily resolved – five ended up buying). Four said they had already bought (using another email)
40 emails, 23 responded (>50% response rate!), and 8 sales. At ~$400 LTV per customer, that’s an additional $3200 from the last email.
Mind you – too many people also forget about existing customers. As there was a sale going on, we emailed our existing customers and let them know they could upgrade to lifetime customers (and if yearly customers, just pay the difference). Nine people took us up on that offer.
From the ~6500 emails, we ended with ~225 sales.
And because we were only emailing 6500 interested people, we had 46 people unsubscribe from the first email, and then 31 from the second. Just 2 unsubscribes from that last email from Kamal. Small numbers.
If you’ve ever seen me speak at a conference about marketing or anything business (or had the pleasure of working with me), you will hear me constantly harp on “buy in”. Buy in is akin to Robert Cialdini’s “getting a yes” – over time, you build trust with a potential customer in an authentic manner. You get them to “buy in” to what you offer. Once you have that trust, you can then sell them something of value.
So I analyzed the ~225 customers who bought ERD. A quick breakdown:
- The average customer had given us their email 12.25 months ago.
- 74 had previously bought the Supplement-Goals Reference, and 56 and previously bought our Stack Guides. Combined, 30 people had previously bought both products.
- If we remove customers who were “new” in our system (most of the time it is because their payment email is different), the average customer was subscribed to us for 16.5 months!
NOTE: The median and average numbers were near-identical.
I should note that every month, we send out a “sneak peek” of one of the reviews in an issue of ERD to our entire email list (free valuable content). Thus ERD was nothing novel to our subscribers – they were well aware of its existence. Our customers obviously already knew what ERD was. We just solved their three pain points that I had outlined earlier.
ERD is normally $29.99/mo or $299/year. Our sale price was $19.99/mo or $199/year. On top of that, we had a “lifetime” option which was $599 (yearly price * 3).
With a year of data, we can look back and see expected lifetime value of a customer. Our first cohort of $19.99/mo customers have resulted in a churn rate of 4.4% over the past 12 months. Our yearly customers come in at a churn rate of 52% (admittedly with just two data points, this # is not the most reliable).
Based on the formula that average customer life span = 1/churn, we get that the average monthly customer is with us for 22.7 months, and that the average yearly customer is with us for 1.92 years.
Based on the formula that Customer Life Time Value (LTV) = Monthly Recurring Revenue (MRR) * Customer Life Span, we get that each monthly customer is worth ($19.99/mo * 22.7mo) $453, and that each yearly customer is worth $382.
It should be noted that a lifetime customer (at $599) beats out both the monthly and yearly customer (and results in cash-in-hand immediately).
By the end of the sale, we had generated 93 monthly, 128 yearly, and 19 lifetime sales. 95% of them were generated from the email list. So while the contribution to cash flow ($19.99/mo*93 customers + 128 customers * ($199/year)/12) was ~$4000/mo, we can say that this sale will generate (93*$453 + 128*$382) $91,000 in revenue. Add in the additional $9855 that the lifetime customers generated, and we end up with over $100,000 generated from this sale.
Not bad for a sale that was dominated by people who had been with us (via our email list) for a while!
Looking back in hindsight, we made some mistakes too. We totally dropped the ball on retargeting. Both the ~6500 emails in our list, and also to others who had visited the sales page/checkout page but had not opted in (we could have used our two optins to get them in). We also failed in getting people excited to share – we could have easily done a giveaway that would have gotten more people sharing it (we have done this before and it worked). Our lack of live chat was also an oversight (and I’m sure there are more things we could have done better).
We’ve now acquired a customer, but now it’s our job to make them happy. 100 days. It’s now on us to convince them that the value they get out of ERD cannot be found anywhere else (which is true).
If you’re interested, pop in your email address below, and I’ll send you a quick checklist on how to ensure your own sale goes really well.
There’s a follow up for the second year anniversary – Segmenting and strategizing to a $114,504 sale