If you’re running an online course and you’re not using a newsletter, or you haven’t optimized your current newsletter, just how much potential revenue are you losing each month? Well that’s a question we asked ourselves with one of our client’s sites last month. The case study can be found below.
THE CASE STUDY
We recently did a test on a client’s site who was selling online courses for about $400 each. After putting the client’s metrics together for them, we found that during this month they had an average revenue per visitor metric of $1.20. That’s what the value of 1 visitor to their website was worth if you were to distribute their monthly revenue across all of their unique visitors from that month.
However, we also measured the same metric for their newsletter members and we found the average revenue per newsletter subscriber was $4.99. That is, if we spread the revenue generated from all newsletter subscribers across the entire subscriber list for that month this is the number we get.
That’s a 315% increase in visitor value! A big difference to say the least. In short, a newsletter subscriber is more valuable than your average visitor.
THEORY OF CONSTRAINTS & EVAPORATING CLOUD THINKING
Let’s now talk in a little more detail about this case study. We use a methodology known as the Theory of Constraints (ToC) to identify and remove bottlenecks in our client’s eCourse growth. We also use a thinking process from ToC called the “Evaporating Cloud”. You can see a diagram about how Evaporating Cloud thinking works here.
These concepts can get pretty complex, but we’re going to try to keep the numbers as simple as possible for this blog post. However, if you’re interested in learning more about unblocking your eCourse potential click on the links above.
BASE METRICS FOR 30 DAYS
Here are the base metrics for the 30 days were were measuring.
Unique Visitors: 28,000 unique visitors
Subscribers: 544 new newsletter subscribers
Newsletter Sign Up Conversion Rate: 1.94% CR
So out of the 28,000 unique visitors who visited our client’s site last month 1.94% of people decided to sign up for their newsletter. This led to 544 new newsletter subscribers over a 30 day period.
In previous months we worked on helping this client increase their newsletter sign up conversion rate. Before they signed up with Academy Of Mine they were getting just under a 0.50% CR rate. So a 1.94% CR was a huge jump! As you’re about to see, this increase will translate into tens of thousands of dollars in additional revenue on a year to year basis. We’re pretty proud of that.
HOW MANY OF THESE NEWSLETTER SUBSCRIBERS ACTUALLY PURCHASED THEIR COURSE?
The purpose of a newsletter for your online course is to allow you to build a relationship with potential students. A newsletter helps you build trust, tell potential students more about what you do and expose them to the quality of your educational content (by offering sample lessons, free demos and so on).
The goal is to continue to push your newsletter subscribers down the sales funnel towards actually enrolling in one of your online courses.
In our client’s case the goal wasn’t to simply add more newsletter subscribers to their list, it was to influence those subscribers to enroll in their online course. So we want to know not only how many people are subscribing, but also how those people are engaging with the newsletter and what influence it’s having on their buying decisions.
Remember, because our client has a relatively high priced course ($400) they have a slightly lower eCourse conversion rate overall. But this month they had 24 sales and made $9,600 in enrollment income.
But out of those 24 enrollments how many were newsletter subscribers? Well in this case 9 were. This means 37% of people who purchased the course were on the newsletter list first, and being sent drip emails every 48 hours before they ever considered signing up for the online course. These 9 course enrollments equaled $3600 in additional revenue for that month month.
These emails were designed to show that the course seller was intimately aware of their potential students’ needs and desires. They would send sample courses, tools and other free information to show students both their depth of knowledge on the topic and show them enthusiastically enough to let potential students know that the course vendor genuinely cared about their students’ potential in this field. And 9 out of the 24 sales from this month were motivated or aided by the newsletter. Not bad right?
FROM THE TIME OF OPTING-IN, HOW LONG DID IT TAKE THEM TO BUY?
On average it took a new subscriber 19 days to make a purchase after they opted in to the newsletter. Some people purchased after 1 day some took as long as 39 days.
So let’s go back for a moment and refine one of our key metrics. We now know that the students who enrolled this month did so with a time frame of 1-39 days after signing up for the newsletter. So let’s monitor how many subscribers we had in 39 days to refine this metric a little bit. When we went back to the data we found that our client had 722 new subscribers in 39 days. We know 9 of these converted into paying students. This equals an average eCourse conversion rate of 1.29%. This is more than double their site’s average overall conversion rate. And as we’ve already stated, this generated $3600 in enrollment sales over a one month period.
AVERAGE REVENUE PER NEWSLETTER SIGNUP METRIC
Another interesting metric to look at in this case is the revenue per newsletter signup which is $4.99 in this case. If our client stays consistent with this conversion rate, each person who signs up for their newsletter is worth roughly $4.99. Not bad, especially when you compare it this the client’s $1.20 average revenue per visitor metric for their overall site (this is traffic coming from referrals, paid ads, organic search etc). So as you can see the value for each site subscriber is much higher than the average value for each site visitor.
We often hear people say “newsletter marketing is important”. But they fail to tell you just how important it is or how it compares to other forms of traffic. They don’t give you hard data and they don’t provide case studies. They just say “it’s important”. So our goal today was to provide some hard numbers for you. In this case the difference between a “regular” visitor and a “newsletter visitor” was a difference in value of 315%.
So in short… if you’re not running a newsletter campaign on your eCourse website, or you haven’t optimized your current online course newsletter campaign… you’re missing out. Big time.
GETTING EVEN MORE SPECIFIC
This is a very general overview of what we did for this particular eLearning client. However, it should also be mentioned that there is lots of room for optimization within this particular sales funnel. For this blog post we talked about one “macro metric”. Essentially we explored newsletter signups relationships to eCourse sales. However, between those two points there are many “sub-goals” that we can further refine and optimize for.
Let’s just take the first email that goes out to a new newsletter subscriber 24 hours after they opt-in to the newsletter. A series of “drip emails” go out over a specified duration of time at this point, but let’s just look at the metrics of the first email in this drip email campaign.
SUB-METRICS (30 DAYS)
New Newsletter Subscribers: 544
Subscribers who read the email: (47%)
Subscribers who only read the email: (34%)
Subscribers who clicked a link within the email: (13%)
Total Clicks: 110
Now that we know this information, we can start by trying to optimize each of these sub-elements one at a time. For example, we might ask ourselves “what can we change to get more people to open the email? A 47% open rate is good. But can we get it to 60%? 70%?” There are a many things we can do to try to increase this metric, but one of the biggest things we can do is test different email titles (subject lines). We ask ourselves “How can we make the title more appealing?”
Then once we analyze that sub-metric and optimize that sub-goal we will move onto the next step in the process which is to get the subscriber to click on a link in the email in order to see the Call To Action (CTA) or offer our client is trying to present to them. In this case the client was getting 13% of the people who opened the email to click on a link within the email. So we’ll ask ourselves “how can we get that 20%?, 50% or 60%? Are our emails too long? Too short? Should we change the font? Should we change the position of the links within the email? Should we try text-only emails with no HTML elements? Should we add pictures? Remove pictures?” These are the types of things we’ll test within this sub-goal.
The assumption here is that the subscribers are valued based on the different actions they take:
Not reading the email: Low value
Reading the email but not clicking on a link: Moderate value
Reading the email and clicking on a link: High Value
The metric we were measuring above grouped all of our client’s newsletter subscribers together as if they were equal. But as we can see by creating sub-goals, subscribers are not created equal at all. So we strive to convert low value subscribers into higher value subscribers which will have an impact on macro goals as well. This takes time of course, but it’s well worth the investment.
DOING THIS FOR YOUR OWN E-COURSE COMPANY
We hope you’ve enjoyed this information. If you’re running an eLearning website or online course and want help optimizing it for enrollments and sales, you might want to click on our homepage to find out how we can help you sell your courses online. On that page you’ll learn more about our hybrid software approach which uses both proprietary and open source Learning Management System software. If you’re not running an online course yet, but you want to… we can help. Just click on our homepage to learn more about how we can get your online course up and running.