Within the Internet marketing industry, there's a popular saying:
“The money’s in the list.”
This means the people who are making “the big bucks” are making it from their email list, not from their product launches.
Is it true?
If we only look at the math, it would seem to indicate it might be true.
In the marketing circles where I hang out, a marketer can typically make between $2 and $3 a month for every person on their email list.
As an example, let's say they sell a product for $27 and give a 75% commission to the affiliates. They are making, on sales from affiliates, a gross profit of $6.75 per sale. Of course, they have payment processor fees, etc. to also take from that, but we’ll use the $6.75 figure for our purposes here.
The buyer gets put on an email list, if the launch is set up properly. The product creator earned $6.75 for the initial purchase. If the marketer is of average ability, the marketer will make between $2 and $3 a month from that customer from that point on, as long as they stay on the marketer's email list.
It will only take 3 - 4 months before the profit from the email list surpasses the profit from the initial sale.
Even if a customer stays on their list for only 12 months, the total earnings for the marketer will be $6.75 from the initial sale, and an additional $24 to $36 from email marketing.
So, it would seem the math supports the statement, “The money’s in the list.”
Is it really true?
I was taught the "money's in the list" mantra many years ago, and had no reason to doubt it. As we’ve seen, the math works, so it must be true, right?
No, it’s not true. Not entirely.
At the very least, it’s an incomplete truth.
A question was asked recently in a Facebook Group I belong to. The members are all product creators.
One member asked, “What’s the number one reason we collect leads and build a mailing list?”
The most complete and accurate answer came from Gordon Russell, who runs the JVFocus forum with William Murray.
Gordon answered, “I would say to develop a relationship with a group of people interested in the value you have to offer them and I don't mean the products you have to pimp. Despite what many people say, the real money is not in the list, but the relationship you have with your list, which can multiply the value of money made many fold.”
Let’s highlight part of that:
“Despite what many people say, the real money is not in the list, but the relationship you have with your list, which can multiply the value of money made many fold”
This is the key.
The money is not in the list itself, but rather in the relationship you develop with the people on that list.
Even though we are marketing online, our business is people relating with other people.
If we keep that in mind, we’ll not only have a more successful marketing business, but we’ll have more fun doing it.
A closer look
When I started creating my own products online and developing an email list, I was taught to sell, sell, sell. The focus was on getting as many sales from your list before they unsubscribed.
Did it work?
Sure, for a while.
There’s a better way, though, and that’s to develop a relationship with them.
I am still guilty of occasionally pitching a bit too much to my list, however, even when I do, my list knows some things about me.
They know I don’t pitch any products that I haven’t personally looked at.
The only thing many marketers have ever seen of the products they pitch is the sales letter, which they then cut and paste and email to their list. They've never actually seen the product itself.
From my perspective, that’s bad marketing. It’s also unethical.
My list also knows I never pitch a product that I don’t or wouldn’t use.
After I have looked through the product, if it's not something I would feel comfortable using in my business, or if it teaches a strategy I don’t believe in or wouldn’t use, I don’t mention it to my list.
If it’s really bad, I have been known to put out a bad review on it, warning my list to stay away from it.
It’s okay to market to your list. We’re marketers after all, and that’s how we make our living.
However, if we focus first on the relationship with the people on our list, then the marketing will happen on it’s own. When it does, it will be a natural part of the relationship.
Your customers will have greater trust in what you offer, and they’ll stay on your list longer.
The math for this is interesting, too.
The $2 to $3 a month figure I used earlier works even with different marketing styles.
If you pitch something to your list every day, those figures hold true.
If instead you send your list tips, techniques, and helpful info most of the time, and only pitch a product once or twice a week, or even less, the numbers still hold up.
Because more people will buy from you.
Not only that, but your list will grow larger because people will stay on it longer.
One of the true masters of email marketing is Paul Myers. Paul runs an email newsletter called TalkBiz News.
He has been sending TalkBiz News out for 17 years. He has subscribers that are still with him from the beginning. 17 years! In this modern online marketing world, that is unheard of.
How does Paul do it?
He provides value. He has built a relationship with the people on his list, and they trust him to provide solid, usable information.
Sure, he pitches products from time to time, but the people stay on his list for the value he provides and the relationship he has built with them. When he occasionally recommends a product, they know he actually likes it.
I highly recommend getting on Paul’s list for TalkBiz News. In exchange for signing up, you will get a free copy of his 112 page book Need To Know, which reveals what you need to know to succeed online. How’s that for providing value?!
The bottom line
Is the money in the list?
The definitive answer is, “not entirely”.
It is in the relationship you have with the people on your list.
Take Gordon’s advice and use Paul’s example, and develop a relationship with your list.
They’ll love you for it, and in the end, you’ll also make more money from it.
It’s a true win/win scenario.
Leave any comments or questions below. Let us know what you do to build value with your email list and what questions you have about how to do it.
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