This Email Strategy Made Over $2,400,000 [STEAL IT] | Spotify Video Exclusive
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How did one email campaign generate $2.4 million in profit?
$2.4 million in additional profit in five days. That's what one email campaign that we did in one of our portfolio companies generated. And if you don't know who I am, my name's Alex Ramosi, OwnEquisition.com. It's a portfolio of companies that deserve over $250 million a year. And I make these videos so that hopefully you can grow your business and make lots of money, and then maybe someday I can invest in your business and help it grow too. I want to walk you through step-by-step exactly what we did in this email campaign so that you can use the same thing in your business to get, ideally, even better results. So let me walk through the context of this business. Number one is it's a business that relies predominantly on paid ads.
It's a consumer-based business, so lots of media to generate lots of volume of transactions and leads. So we had a very large email list. And for the most part, we weren't doing much with that email list besides following up for the initial transaction. And then after that, they were dead to us, which I definitely don't recommend doing. But at the time, going into this, it wasn't a constraint of the business. And then it became one. because all of a sudden some of our ads weren't performing as well, and all of a sudden we thought, oh my gosh, we might not hit our quarterly revenue goals. What else can we figure out? Enter the email campaign. Cool, so let's walk through the numbers. So the email list size was 3.3 million emails.
Now this was over a few years that we collected these emails, and it was a traditional, think about it like an e-commerce setup.
What context is important for understanding the email campaign?
So it was an opt-in, and then a sale, and then upsells. So the next major number that we need to know is that this was a $2,000 price point, And we had an upsell on the back end for about $8,000 that a certain percentage of customers would take. Now, the next piece that's important for this is that we had buyers and non-buyers that were on the list. So this was just a total list of everyone that we had ever had. Now, in this business, traditionally, to sell just this $2,000 item, our cost to acquire a customer was $1,200. So not a lot of margin there left over. Now, you can do this because it's an automated selling machine, so you can just crank on ad spend, which this particular business does. It's a nine-figure company in terms of annual revenue.
But we're like, hey, one of the other stats about email that's important is that the cost to acquire a customer on email, once you've already acquired the lead, is $0, which if I can have free customers, that means whatever my gross profit is of selling my main thing drops straight to my bottom line. And so as a mental construct for this, I like to think about email kind of like a long-term investment account. And so it's like you run ads every single day or you do outbound or whatever it is to build your list up. And that's kind of like your paycheck, right? Like you put work in and you get paid back, right? And it's just like a direct relationship. Whereas the email is kind of like your 401k. It's kind of like your investment account that you put money into, and then over time, it starts to compound and compound and compound.
And if you have an email strategy, and I'm going to give you kind of an overarching email strategy that we like to employ in businesses. This business just is crushed doing what we've been doing, so it hasn't been the main focus. But if you have a business, it is one of the easiest ways to just immediately plug in and print money. And the nice thing is that even if it's late to the game, I mean, this business does... a lot of money, you can still employ it and then immediately see the results. There's two things about email and having follow-up beyond initial follow-up that makes a business more valuable. Number one is that all sales that will come from email are gonna drop straight to the bottom line in terms of profit.
And so most businesses, 95% of businesses are traded on a multiple of bottom line. And so since these sales drop straight to the bottom line, it will be a big enhancer on the enterprise value.
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Chapters
7 chapters
1
How did one email campaign generate $2.4 million in profit?
0:00–1:17
2
What context is important for understanding the email campaign?
1:17–4:21
3
What metrics were used to evaluate the email campaign's success?
4:21–8:02
4
How did the challenge concept contribute to the email campaign?
8:02–11:41
5
What is the significance of having a strong lead magnet?
11:41–15:12
6
How does the email strategy impact customer acquisition costs?
15:12–19:22
7
What are the four key takeaways from this email marketing strategy?
19:22–22:29