Renegade Newsletters: Why The $5 Price Point?
How income compounds over time
$5 is not fixed in stone here, but I am using it as an example, and the simple, and slightly devious answer to this question is, people don't cancel when it is at this price point, and the expectations of what that are going to receive are low. The attrition rate is tiny.
When people are looking to cut back on their outgoings, do you think they will look at your $5 a month subscription first?
No, of course not.
One of my clients who is doing around $92k a year at the moment has only lost 27 customers in the last three and a half years.
Now I know $5 doesn't sound a lot, but when you have multiples of these hitting your bank account every day, it quickly adds up.
Let's look at some numbers quickly…
If you sold just two subscriptions every day, at the end of the first year, you would have brought in $22,410. It might not sound a lot…
But this is where things get interesting.
Let me show you the numbers…
Every month, your income increases until you are bringing in $3,435 a month after one year.
Now, by the end-of-year two, you are earning $6,855 a month, making it a $85k+ a year income, and at the end-of-year 3, you are running a nice, low stress $190k a year business.
This is based on 3 customers unsubscribing every month.
In addition to all of this recurring revenue, you will also make affiliate sales, and potentially additional sales from your own standalone products.
As you can see, if you stick to it, producing a weekly or monthly newsletter, the numbers compound pretty quickly.
And that is the power of the simple $5 system.
Another thing is to consider the fact that low ticket memberships are easier to predict income than higher ticket continuity. Every month you have a few leave and a few come. With the higher ticket memberships, you lose revenue in huge chunks and it's a little more unpredictable to determine revenue from them.
I’m excited about this and can easily understand the long-term view of things. Will directions on getting started come along your sequence of emails and/or can we see the series of messages in the back office and use that info to get started? I don’t mind waiting if your message sequence is pertinent to what you’re teaching in this iteration though.