So I’m actually feeling pretty good about online business and my businesses. After the last post wondering whether to go deep or go broad, I’m happy I decided to follow Pat Flynn’s advice and double down. I doubled my ad spending and lowered my prices somewhat, and…good results so far.
Let’s Get to The Earnings
First, the hilarious news.
Niche Sites – Smart Getaways for Couples – $0.34
That’s right. Adsense on Smart Getaways for Couples made me 34 cents last month. Page views are decent, but I need to go big with this site and find another way to monetize, because the Adsense…not so happening.
Now, some good stuff.
The 80/20 Drummer – $290.88
That’s $240.88 from online sales, and $50 for a private coaching session.
Gross Revenue – $291.22
Of course, I’m spending money for ads and site hosting.
Site Hosting – Bluehost – $9.99/year/12 = $0.83
Site Hosting – Squarespace – $10
Facebook Ads – $114.69
Total Expenses – $125.52
Total Profit – $165.70
Still a pretty modest number. Let’s look for a second at conversion rates though. Site hosting is fixed. For every dollar I spent on ads, I earned $2.53 back. Assuming that rate held, if I increased my ad spending fivefold ($573 give-or-take), could I expect a fivefold return on investment? ($1450, with $877 in profit.) There are, of course, limiting factors.
- The sample size is still too small to make statistically significant predictions about the conversion rate. It may still be that I “got lucky”.
- Ultimately the size of the market may also be a limiting factor. If there are 20,000 existing drummers in the universe who might have an interest in my product, and the market self-renews at 100/month, that means at the present conversion rate there’s a definite point of diminishing returns, at which everybody who would have bought under present conditions has bought, and the low replenishment rate means slower sales.
It’s almost so theoretical as to be a waste of time to think about. Luckily, I can test, by increasing my ad exposure and budget incrementally and seeing if the conversion rate holds.
The other side, of course, is increasing the conversion rate. How many people saw the ads, clicked through, and decided “meh, I’m gonna wait”? If I use myself as a case study and my propensity to see what the gist of a new product or service is, then ruminate for a while before I purchase is representative of anybody else’s tendency, there are a least a few folks like that out there.
And here’s how I’m addressing that. Social proof. I’m making a documentary series about my attempts to tackle different drumming challenges, based loosely on Survivorman, except instead of “I’m in the outback with only the clothes on my back. Can I make it?” It’s “I’ve got just three days to learn this or that demanding tune of prepare for an audition.” But pretty much the same in all other respects. (Read: Real Tigers.) For now, I’m doing the Gary Veynerchuk model somewhat backwards – build the product first, then the audience second.
Anyway, I put mailing list opt-ins all over the site, and the good news is I’ve been getting a lot of sign-ups. I know I’ll soon have 1000 facebook “likes”, and my goal is to get my mailing list to 200. These are the folks who will get the “reality show” in their inbox every week. Not for nothing, a funny psychological thing happened – I’m almost as happy to see a mailing list signup as a sale.
The ancillary effect will be lots of videos on Youtube, which to-date has been my highest converter. (People who found my videos while browsing on youtube were most likely to buy my products.)
It’s all a grand experiment. Maybe the videos won’t work, or won’t work well. As long as I’m able to shift and adapt my strategy while maintaining focus on the larger goal, I’ll be okay. As someone once said, “you only loose when you quit,” and as I like to add, “as long as you’re receptive to what works and what doesn’t.”
So let me set a somewhat quixotic goal. I want to do $1000 in sales in the month of March. No idea if I’ll reach that or not, or how, but I’m putting it out there. Better ads, better on-site conversion architecture, more free videos, more mailing list subscribers. Let’s see if we can get there.