When someone tells you they have a list of 25,000 are you impressed? In the world of online and email marketing, most business owners would be impressed with a list that size.
But you shouldn’t be.
I have a client who has 21,000 people on her list. She’s worked really hard at growing the list over the last 5 years and has managed to double it in the last 12 months. While this is an accomplishment in and of itself, these numbers are NOT having the impact on her business that you would expect.
This is because the vast majority of these people are prospects.
Prospects are potential customers, people who have yet to buy from you.
And since they have yet to buy, they have done nothing to contribute to your bottom line.
Your buyers — the people who have actually bought something — are the ones who are actually doing something to help grow your business.
So, what about my client with the 21,000 person list? How many of those people have actually bought something? I wondered myself. So I ran a report (with her permission). And I discovered something surprising:
Her 6-figure business is the result of purchases by less than 1,000 individuals. Or less than 5% of her total list!
She has untapped potential in this email list that she is wasting. According to Marketo, a leading marketing automation provider, “lead nurturing can improve the conversion of prospects from your existing database to sales-ready leads by 2 to 3 times.”
Lead Nurturing Turns Prospects into Buyers
Lead nurturing starts by recognizing that not every visitor to your website, or person that contacts your business, is actually ready to buy your solution, even if it is amazing.
The decision to purchase is a process. (See How Customers Make Buying Decisions for more details). It is your job to stay in front of that prospect until he or she is ready to buy.
Lead nurturing is more than:
- Sending a newsletter on a semi-regular basis
- Blasting the entire database with a new affiliate offer
- Offering content that promotes your business without taking into account the prospects needs or interests at their stage of the buying process.
Lead nurturing is about building relationships and trust with your subscribers in a way that is both consistent and relevant to them.
There are two main types of lead nurturing campaigns:
Stay in Touch Campaigns:
These campaigns drip out relevant content to prospects over time, helping to educate them about the problem you solve, while also helping build trust and credibility for your business.
Your Stay in Touch campaigns make an assumption about how long the buying process takes, but some people will be ready to buy on a shorter timeline. An accelerator campaign responds to your prospect’s behavior — visiting your website or clicking links, for example — and responds by moving that prospect to a different marketing track.
What if my client employed lead nurturing in her business? Well, if she is currently converting 0.3% of her database a month (a reasonable figure given her current sales volume), increasing that conversation 2.5x would up the percentage to 0.75%, or 157 sales per month.
Even if her main product was just $97, that would increase her revenue by $9,000 a MONTH!
Not too bad a result from a minimum of upfront investment.
Just getting someone to sign up on your list is no guarantee that they will EVER buy anything from you, so it doesn’t make any sense to work at growing your list until you first figure out how to transition those subscribers into buyers.