List Building | What Does ROI Mean to You?

If you’re in business, you undoubtedly know what the term ROI means, right?

Return on Investment

That means how much money did you make in comparison with how much you spent?

What does that have to do with List Building? A lot, actually. List building, just as any other facet of good marketing includes an ROI component.

For instance, what are your expenditures for list building?

• How much do you spend for your autoresponder service?
• How much do you spend for co-registration?
• How much do you spend for advertising?

All of these expenses have to be added together so that you can actually see what your monthly list building expenses are.

So, let’s say you spend $19.95 a month for your autoresponder. Some are less, but we’ll just use this number for an example.

And let’s say that co-registration costs you $97 a month, right?

Plus, there’s advertising your squeeze page, aside from the co-reg service, which may include pay-per-click, ezine advertising, and any other method that you pay to use. Each of these is a monthly expense. Let’s just say that you have a $100 a month budget for advertising. OK.

That’s $216.95.

Now, let’s talk about the products you’re selling. How much is your income from each sale? It can be your own product or someone else’s. How much will you earn every time there’s a sale?

Let’s say you’re selling a $97 product ad making a $47 commission each time. How many units would you have to sell to get your money back? It comes down to 4.61, so let’s say 5. You’d have to make 5 sales just to break even. Can you do that? Will that product make 5 sales for you each and every month?

But you still haven’t made any money, right? You’re just paying the bills.

To make any money, you have to sell 6 units. If you can do that, your ROI has just become 21%. Not bad. The bank won’t pay you that much if you sock it away and don’t look at it. So, if you have a product that works, you’ll probably do OK.

This won’t be true in the beginning because it takes a little time for your list to grow and for people to get to know you. If they trust you and like you, they’ll buy from you, and you’ll only sell them valuable stuff, so that’s a good exchange. But think of them as “future” investments.

The people on your list may not buy immediately. In fact, some will never buy at all. But those few that do buy may buy more in the future, and new people keep coming in and some of them buy. Eventually your income is rolling. That’s probably when you should sit down and evaluate your ROI.

If you’re not happy with the outcome, something needs changing. Find cheaper services or a product that’s easier to sell or that make more money per sale. Just make changes one thing at a time. Otherwise, you won’t know which one made the difference.

Start List Building—Your Present and Future Income

Tagged as: advertising, autoresponders, co-registration, marketing, pay-per-click