“Oh, my goodness. I’m so excited. I got invited to participate in this promotion. It’s gonna cost me $200, but they’re going to send out my promotion to 10,000 people on their email list. I’m so excited that’s, like, 10,000 leads for just $200.”
Whoa, hold on. Not so fast!
Have you ever felt like that person at the start of the show—excited about the opportunity to get your name in front of 10,000, 20,000, or 10,0000 people on someone else’s list? Then you began to wonder, “Is this a good investment?” This is one of the most common questions I receive from clients who are considering making additional marketing investments. It can be a great idea, but you must take a step back to properly evaluate the opportunity.
Before you say yes and hand over your money, you should probably ask a few more questions. One of the questions I’d like an answer to is what other participants have seen in terms of results in the past.
In other words, this is someone else’s list, and you’ll be able to send your information to that list. They’ve been nurturing that list. No matter how high they place you on a pedestal, no matter how much they edify you, these people still don’t know who you are. Because it isn’t your carefully nurtured list.
Realistically, how many of those 10,000 people could you add to your own list? Or if you’re making an offer to a list, how many of those 10,000, 20,000, or 100,000 people can you reasonably expect to buy your product from someone else’s list? That’s an important question to ask to measure your return on investment.
They distribute your information to 10,000 people, giving the impression that you’ll receive 10,000 leads. Those, however, aren’t your leads until they’ve entered your world, until they’re part of your marketing efforts and on your list. If they’re on your list, you can look at your conversions.Let’s use the following example to further examine this prospect:
Say you paid $200 for the opportunity to be in front of those 10,000 people. And let’s say that out
of those 10,000 people, your typical conversion rate was somewhere between 2% and 3% from
your own list.
It’s reasonable to assume that if you’re placed on someone else’s list, no more than
1% of those 10,000 people will be added to your own list.
If you offered a free product, and the idea or goal was to get people on your list, first and
foremost, you should ensure that you have a solid nurture sequence in place to nurture the new
leads into your own products and services—in other words, have your ducks in a row before
Let’s estimate the conversion rate of their 10,000 people at 1%—although using this figure may
or may not be completely accurate, it’s the most probable scenario. Next, you must communicate
with the person who is making this offer to you, as well as examine some data.
A 1% conversion rate adds 100 people to your list out of the total 10,000 people to
whom they sent your information.
You now understand that once you’ve nurtured your list into your products and
services, it will convert at a rate of 2% to 3%.
Your 2% to 3% conversion rate will result in approximately three sales from the
newly added 100 people to your list.
What products or services do you offer? And, if you have a conversion rate of 2 to 3 people, will
your $200 investment return a profit? If you converted two people and your product cost $50,
you didn’t make a profit. You’ve only made $100 up to this point. However, if you have a conversion rate of two to three people out of that 100, and you sell a $500 product, you’ve made $1,000, resulting in a profit
of $800. Of course, you must also consider your business’s other expenses.
You must consider your total ROI, as well as the total expenses that will be incurred to make all
this happen. However, you can reasonably argue that it will generate a profit and will be well
worth your investment.
Before you jump into any of these opportunities, you should ask yourself, “What kind of list is this? Where did you get the list? Who are the individuals on the list? How active are they? Have you done this type of promotion before, and what kind of return can be reasonably expected from previous participants?”
Look at your own numbers and data to see what kind of return you might get.
Some opportunities are excellent and offer a fantastic opportunity for return, while others you may want to avoid.
I believe you’ll have a good idea whether this is a good investment or not. Let’s continue this discussion inside the engaged as a human community. Let me know what kinds of investments you’ve been offered in the past and whether they worked out. Lastly, let’s discuss whether you will consider applying the key points you learned so that we can come up with unique ideas when evaluating marketing investments.