I have a healthy scepticism of most things I read and watch on the internet. I’m not some kind of loon that believes that the moon landings were faked and that we’re ruled by lizard people who control the major world governments. I’ve just been around long enough to know that much of what you read where people make claims is usually predicated on some pretty loose foundations.
Slight tangent, I’ve always got my brain working passively to think about new ideas or topics for these daily emails. Sometimes it’s not one thing that triggers an idea, but a couple things in concert.
Today was one of those days.
I got an email at work that a package had arrived for me in our mail room. I knew what it was and I was very excited. It was the physical proof copy of my new book, “No Hyperbole: The New Rules Of Online Business”. I was out at lunch so I finished up and rushed back to the office to go get it.
Unfortunately, when I got back the mail staff had all disappeared for lunch. I figured I’d just wait for five minutes for them to come back, so I sat down and read Facebook. There I saw an infographic from a company that runs a marketplace for people who provide services to authors.
The infographic was very pretty and talked about how much it costs on average for you to self-publish your book. The infographic looked at the average prices in their marketplace and all up for editing, proofreading, layout and cover art, they said it would cost about US$3500.
So like I said, sometimes a confluence of events generates these ideas – I was sitting there waiting to pick up my self-published physical book that cost me all up less than US$80 to produce, have printed AND delivered express but they said it costs on average $3500 without even getting a single physical copy.
Which leads me to this email. You need to seriously consider the source of any and all claims and data that people produce.
Take the example above, I’m not for a second suggesting that this marketplace provider diddled the numbers, but you would be wise to read it with a very heavy dose of healthy scepticism. Maybe I’m a touch cynical, but when you run a market for people to offer their services (of which you get a cut) to authors, it kind of makes you think, “Ummm… maybe these numbers are a bit high.”
That’s not even my favourite one though. My personal favourite is always “internet marketer math.” If you’ve been online for any length of time, you’ll have run across this in some form. It misuses the compounding of numbers to “demonstrate” how easy it is to make “huge bank” on the interwebz.
“If you get just a single subscriber per day at this price with a churn rate of this impossibly low number, you’ll achieve an annual run rate of this outrageously high number.”
Let me break that crazy down for you so you understand it.
First of all, getting one new subscriber to a recurring program per day is not impossible. It largely depends on your audience, your marketing and your price point. I openly admit I’m not doing those kinds of numbers with Casual Marketer.
You need to think that over the course of a month that’s 30 new subscribers on average and let’s say that you convert 5% of your leads into buyers. That’s about 1 in 20 people who optin to your list and go through an engagement campaign end up buying. To get 30 new subscribers at that rate you’d need 600 new leads to your list per month.
Suddenly that seems a bit harder. Ok, 10% would be 300 leads and even 20% would be 150 new optins per month. Get it out of your head that you’re going to convert 20% of your leads to a paying subscriber – that’s just never going to happen over the long term.
Again, plenty of people can generate those lead number and get reasonable conversions, so it’s not impossible, but it isn’t simple either.
And that’s just one part of the equation.
Then we look at price points and churn rates. For the most part, these are almost always made up, fictitious numbers that support the desired result in this kind of math. The price point is entirely dependent on the market and churn is a function of stickiness and market maturity. Trying to generalise these things is just stupid.
The last part is my favourite part of the internet marketer math, “annual run rate.”
There just isn’t a bigger load of bullshit floating around the internet than this one. Basically, this one says, “If I take my current monthly revenue, toss some make believe fairy dust on it, I can pretty much tell you I’m a millionaire.”
I’m being flippant, but let’s be honest, we’re talking about a complete load of nonsense so me being whimsical about it is neither here nor there.
I’ve seen people take their current month’s revenue, their month-on-month growth rate and then straight line that out over a twelve month period and say that they’ve built a seven-figure business. There’s always a little asterisk next to it denoting ARR. Other people just multiple the last month’s or last quarter’s revenue by twelve or four and call that their run rate.
I have seen people announce publicly that they are running a seven-figure business having earned less than a hundred grand in total lifetime revenue and then never achieve that annual revenue of seven figures – they remain humble, one comma people instead of their desperately desired two comma people.
With respect to this kind of marketer math, there’s always a tell like a bad poker player – they position achieving the result they want you to believe is “easy”. They say things like, “If you could get just one subscriber per day.” This is the same sales psychology charities use on you, “For less than the price of a cup of coffee per day, you can save 97 red freckled starlings from the scourge of deforestation in Lower Slobabovia”. It’s sleight of hand – take a big number, make it smaller by breaking it down into
Whenever someone drops marketer math on me my healthy scepticism reflex kicks in, I instinctively clench my butt cheeks and turn my back to the wall because I know what’s coming next.
And on that happy note, I’ll leave you to ponder what’s coming next…