Zero Sum List Building Experiment

I’m sure a lot of you are aware of my  background and how this has lead me to adopt a more strategic and analytical view to IM than most marketers. I guess it’s just the way I am – I have to look at the numbers, examine the results to see if any improvements can be made, and then re-test over and over until I hit the Sweet Spot.

Well, I think I’ve just about done it…with regard to hitting my List Building Sweet Spot.

You see over the course of the past month or so I have been working away, trying to devise the ultimate List Building Strategy. Since I first came online I’ve been really focused on building a list, and must have tried every approach known to man.

I have more magic button list building WSOs on my hard drive than I’d like to admit. Whilst many of them do work there is always a trade-off which the seller usually forgets to mention in their epic sales thread….it Costs to build a list – a lot!

You can either invest your Time in building a list (which can be slow and take forever to see real results) or you can invest your Money (which will see you reach your goals a lot faster but of course will you cost you Big!)… I have neither the Time nor the Money needed to build a substantial list so I began exploring other methods.

There is a term in economics called a “Zero Sum Game” whereby the total gains made by a participant are equal to the total losses made. I was interested in exploring this concept in regards to my list building endeavors and I’m glad to announce I seem to have found a method which works.

List Building Sweet Spot

Basically what I have been doing is investing in a form of paid advertising which drives leads to my squeeze page. A percentage of these sign-up to my mailing list and receive the free gift which was on offer.

Now in order for this to be a Zero Cost Investment I needed to be able to immediately monetize enough of these subscribers after sign-up to offset the cost of the advertising. I’m not talking about mailing these subs offer-after-offer in the hope of making enough affiliate commissions to cover the cost, I’m talking about constructing a well converting sales funnel that would instantly return my investment.

The first time I tried this I made back most of my money, the second time I got a little closer…but the third time my funnel was converting nicely at it’s Sweet Spot and I covered 100% the cost of the traffic.

“Awesome!….” I thought to myself, now all I have to do is Rinse & Repeat and I will be able to build as big a mailing list as I want for FREE!

You see after sign-up my subs were directed to the download page for their Free Gift. I took this opportunity to present them with a fantastic OTO. This is the point where I began to regain my investment as a percentage of my subs took me up on the great offer and purchased the OTO.

In doing so I was able separate my list in two – automatically transferring anyone who purchased the OTO onto a different list. This gave me the added bonus of building a buyers list. This was super easy to do as I was able to integrate my auto-responder code into the payment processor and then set up an automation rule in Get Response.

 

So what kind of results have I been seeing with this?
On average I have been adding 40-50 double opt-ins to my list each day I used this method, with 5-10 residual sign-ups in the days after I purchased the advertising.

To some 50 opt-ins per day may not be too exciting but remember this… They cost me nothing! I’m able to add 50 subscribers to my list each and ever day for a Zero Net Cost.

Now remember when building an email list their are 2 Metrics which you must keep an eye on:

CPS : this is the Cost per Subscriber, how much is it costing you to add each new subscriber to your list?
LTV : this is the Long Term Value of each subscriber and is usually denoted by a monthly revenue amount ($ per month).

To operate profitably you must keep your CPS as low and your LTV as high as possible. Perhaps your CPS was $1 per sub and your LTV was $2 per sub per month – you can now say that after one month your profit per subscriber would be $1 (LTV – CPS) and $2 for every subsequent month they stay on your list.

Think about how much more profitable your business would be if you could completely eradicate the CPS i.e. have a CPS = zero. That’s what my goal was when I started experimenting with this method.

I was reading a thread over a the Warrior Forum a few days ago where one of the members was real excited because he added 82 subscribers to his list in a couple of days. I thought this was really great for him but when I looked more closely at his post the numbers weren’t so good…

This was because he spent $130 on traffic which gave him these 82 subscribers. Therefore :

CPS = 130/82 = $1.59 Cost per Subscriber

Hmmm…. on second glance his haul of 82 subscribers doesn’t look that attractive does it? You see for most of us this sort of model isn’t viable in the medium term let alone as a long term strategy for building your business.

You must look at the numbers, they simply don’t lie and will very quickly give you an honest appraisal of how you are doing.

Now I didn’t write this post to relay how great I am or anything…I just wanted to highlight how with a little lateral thinking, looking at the numbers, and a bit of tweaking how anyone can build a mailing list quite fast…for basically no cost to you! The Zero Sum Game at play here allows the cost of the traffic to be immediately offset by the revenue generated by the OTO in your sales funnel.

I hope my little success that I have outlined above will help spur you all on and underline the importance of taking a step back and review your results as you progress. While sometimes things look great at first glance it’s worthwhile to analyze what the numbers are saying because they may put a different slant on the story.

Thanks for reading and I hope you enjoyed the post! I was thinking of putting down my Zero Cost List Building methods in a Report for you guys – do you think that this would be a good idea?

Leave a comment below and let me know what you think. If there is enough interest I’ll get to work and explain to you how you can replicate and even exceed my results :)

Cheers,

Noel.

 

27 Comments

  • Muhsin

    Reply Reply May 28, 2012

    It definitely would be a great idea to do a report on that Noel!
    There are a lot of people with list building problems.
    I have been wanting to write my list building report but have
    been taking too long due to work.
    Awesome post on list building.
    My favourite topic too. :))))

    • Noel

      Reply Reply May 28, 2012

      Thanks Muhsin,
      I’ll put that down as 1 Vote for the Report! :)
      Ya, it is tough to fit in the time to do these extra reports but hopefully you’ll be able to get to it soon..
      Cheers for all your feedback!
      – Noel.

  • Hey Noel, a report will be awesome. Thanks for sharing such a great strategy. I don’t know how to calculate customer value, so perhaps you can also include that in the report? Thanks again for this info, I will implement this!

    • Noel

      Reply Reply May 28, 2012

      Hi Rocky,
      Sure, I’ll do my best;) Customer value varies from niche to niche – say in the IM game you may average $1 per month but in Womens Healthcare it could be $5 or more…It really depends on the needs of your target audience and how desperate they are for solutions to whatever problems they might be having..
      Thanks,
      Noel “must get started on this report” Cunningham

  • Hi Noel,

    I think the information you’ve presented here is fantastic.
    I’ve heard the term “Zero Sum” before but never quite understood it. Your explanation makes it very clear.

    I too would love to see a report of your methods for this. You explain things so well!

    I was just starting to leave comments on forums w/a link back to my blog in order to drive traffic. Seems like doing this would take forever. I like your method much better!

    -Karl

    • Noel

      Reply Reply May 28, 2012

      Hey Karl,
      Thanks for the kind words, in another life I may have been a teacher so maybe that’s where my skills are coming from :)
      I’d say keep working away with the blog commenting because it has it’s place too, by getting involved in discussions in forums you introduce yourself to your audience and little by little they begin to see you as an authority etc. etc. Plus you can learn loads from the other members so it’s a win-win!
      All the Best,
      Noel.

  • sylvia

    Reply Reply May 28, 2012

    Morning Noel,
    Great post. That is some powerful information you are sharing. A report on how you set this up would be very interesting!
    I look forward to more posts.
    :)Sylvia

    • Noel

      Reply Reply May 28, 2012

      Hey Sylvia,
      How are you doing? Great to hear form you!
      Thanks, I’m glad you like it – and I’m working away on the Report as I type this so watch this space!
      Hope all is well with you!
      – Noel.

  • Paul Conway

    Reply Reply May 29, 2012

    Hey Noel

    Its great to see someone like yourself who is interested in the metrics :) I sometimes cannot get my head around figures, so miss exactly what is going on with my conversions in relation to how much it actually cost me per subscriber.

    A report would be really kewl to help me understand it more fully. Thanks for sharing the above excellent information.

    Cheers
    Paul

    • Noel

      Reply Reply May 29, 2012

      Hi Paul,
      No problem at all – I’m big on Numbers, like to keep my eye on the bottom line so to speak;)
      Glad to be of service – hope all is well with you?
      Cheers,
      Noel.

      • Paul Conway

        Reply Reply May 30, 2012

        Hey Noel

        Going along nicely thanks. Been looking at maybe testing banner advertising on big G. Just need to do some more research :)

        Cheers
        Paul

  • Brooklyn

    Reply Reply May 29, 2012

    Noel,

    I love the “sweet spot” idea. This information is very valuable. There are so many different angles that one could take when building a list. The way you laid this out is very helpful. I would love it if you did create your “Zero Cost List Building” report. I am always looking for high value, usable information.

    THank you for sharing!

    Brooklyn

    • Noel

      Reply Reply May 30, 2012

      Hey Brooklyn,
      Good to hear from you! That all sounds good and I’m glad to say the report is “under construction” at the moment;)
      Hope all is well with you..
      Cheers,
      Noel.

  • Kevin

    Reply Reply May 30, 2012

    Enjoyed the post. I’ve been wondering lately of the best way to build my list, and your method seems like a great way to go. I’d like to build it quick, but I’d also like it to be as cheap as possible. I’m really looking forward to the report.

    • Noel

      Reply Reply May 30, 2012

      Thanks Kevin – I think that’s the biggest question on all of our minds “How to build a list Quickly & Cheaply,” I guess a lot of it is trial and error. Luckily what I’ve been doing seems to be working (after a bit of work)..
      All the Best,
      Noel.

  • Paul

    Reply Reply May 31, 2012

    Hey Noel,

    Long time! I’ve been keeping busy with offline projects but I am finally able to get back and meet up with my IM friends. Great work on honing in on this ‘sweet spot’… I think most people realize that this is possible but aren’t willing to put in the hustle that you’ve demonstrated here – so kudos for this!

    I would personally love a report on the entire process. I think you’d probably be able to do well with it as a WSO.

    Thanks for sharing, I’m glad you’re doing well my friend.

    Talk to you soon!

    Paul

    • Noel

      Reply Reply June 1, 2012

      Hey Paul,
      Welcome back to the online world! Ya, the Sweet Spot is where it’s at…it takes a bit of trial and error but once you find it you can continually add to your funnel and be fairly confident you’ll at least break even:)
      Thanks for that feedback, I am thinking about putting it out there as a WSO, seeing as it’s a Case Study with proof it should interest a few people I think.
      All the best & talk soon,
      Noel.

  • Dee Kumar

    Reply Reply June 1, 2012

    Nice read Noel, and something that has really started to interest me lately as i’ve been building my lists.

    If you can get this to work with a good OTO then you really can cash in whilst building your lists at the same time.

    Can I ask what type of OTO you offer and the value of it?

    • Noel

      Reply Reply June 2, 2012

      Hey Dee,
      The OTO was basically the “next step up” from the freebie I was offering. Say if I was giving away a Free 10 Step Guide… then I would offer them a more complete, expanded edition as the OTO (with a few bonuses thrown in like Checklists, Quick Start Guide etc.)
      I’ve been testing this at different price points, from $4.95 – $9.95, and would you believe I’ve found the higher price converts better. I think it might have something to do with people being suspicious of buying something that proclaims to be of such high quality when the seller is only asking 5 bucks for it (like it can’t be worth much at that price)…It’s weird but that’s what I’ve been observing with it.
      The value of the OTO would be in the $17-27 range so I’m really trying to make it a “no-brainer” to purchase – I’ve not been trying to maximize revenue but rather cover the cost of the traffic ASAP.
      I’m going to try it at the magic number of $7 soon and see how it converts at that…
      Cheers,
      Noel.

  • Hey Noel,

    Yes, I think this would be a great report!

    I am all for your Zero Sum Game – you’ve shown that knowing your numbers is what makes the difference between profitability and well, not.

    This is a great concept – would love to hear more :)

    ~Christine

    • Noel

      Reply Reply June 4, 2012

      Thanks Christine, work has commenced on the report so watch this space!
      Cheers,
      Noel.

  • syafiq aswad

    Reply Reply June 9, 2012

    Hey Noel..

    Really great report. I tried using paid traffic to build my list before but no luck.
    The only way that works for me is solo ads. It would be nice if you can share the method.

    • Noel

      Reply Reply June 11, 2012

      Sure Syafiq, I’ve been working away at it – as one of the guys mentioned I’ll probably release it as a WSO when finished. You guys will hear about it first when it’s ready;)
      – Noel.

  • Guy Martin

    Reply Reply June 9, 2012

    Hey Noel,

    Nice article. I often read about someone bragging about getting all these subs and then I find out how much it cost them. Gotta look at the bottom line. People are always quick to boast while leaving out a key bit of info.

    While I was reading your article, I was also hoping to get more info about how you got so many sales from your subscribers. I understand that you have a really good funnel but is there more to it that you can share with us?

    Guy

    • Noel

      Reply Reply June 11, 2012

      Hi Guy,
      With the sales I was giving the subs something upfront free of charge and the paid offer they were seeing was directly related to the freebie. It was a super, over-the=top version being sold at a huge discount to what it would normally sell for. That’s kinda it really, by the time they had reached the OTO page I knew they were “qualified” leads so by presenting them with a great value offer some of them were bound to convert – and they did!
      – Noel.

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