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What Online Entrepreneurs Need to Know about Affiliate Marketing

Voiceover: Rainmaker FM.

You’re listening to The Digital Entrepreneur, the show for folks who want to discover smarter ways to create and sell profitable digital goods and services. This podcast is a production of Digital Commerce Institute, the place to be for digital entrepreneurs. For more information go to Rainmaker.FM/DigitalCommerce, that’s Rainmaker.FM/DigitalCommerce.

Sean Jackson: Welcome to The Digital Entrepreneur, everyone. My name is Sean Jackson. I’m joined, as always, by the intelligent Jessica Frick. Jessica, how the frick are you?

Jessica Frick: I am great. How the jackson are you?

Sean Jackson: As always, I am well. And what was our question for the week that we left everyone hanging with from the last episode?

Jessica Frick: Last episode, we asked whether you think affiliate marketing is worth it for digital entrepreneurs. And you said it’s too hard for too little return. And I’ve been thinking all week about how wrong you are. But, before I detail all the reasons why it’s totally worth it, I really want to hear you expand on this.

The Common Complaints about Affiliate Marketing

Sean Jackson: You know, I’m becoming a curmudgeon on the show. I’ve realized that now ’cause I’m always in the negative. I’m gonna have a positive affirmation at some point. Let me be the negative guy for a second, okay?

So, here is the dilemma, all right? I think there are three things that make affiliate marketing just hard as hell. Okay, number one: You’re going to get a lot of affiliates that don’t do anything. I think if there’s an absolute example of The Pareto Principle in practice, it is the fact that a tiny minority of affiliates will generate the majority of sales, and the rest won’t do anything. And yet, you’re going to spend all your time with this universe of people that aren’t doing anything. And so if you’ve got limited time, why futz with it?

That’s number one. Number two: Too expensive, okay? Let’s face it. To get on people’s radar, you’re going to have to give a pretty generous commission on top of any fees you’re paying to an affiliate network on top of that. That’s a lot of money going out the door. So why should I be spending all this much money if it’s just going to be less profitable than if I do something, let’s say, like a Facebook ad or Google ad?

And then the third reason: Scammers, right? You know, there’s so many people out there, living on the fringes of trying to get a piece here, trying to get a piece there. They sign up for every affiliate network. And so instead of trying to focus my time and attention on people that are performing, I’m going to have to spend all my time trying to get rid of the scammers out of my network, those discount coupon-esque things that, you know, just don’t really do anything.

Jessica Frick: Oh yeah.

Sean Jackson: So those are my top three reasons why it’s just not worth the effort. You’re better off doing something else than affiliate network. Tell me why I’m right.

Why the Costs of Affiliate Marketing May be Worth it

Jessica Frick: Okay. Well now I hear why you’re so misguided.

Sean Jackson: Oh, okay.

Jessica Frick: First, let’s go with the cost, okay? We’ll go for number two, and then we’ll go one, and then three. So for number two, you’re saying it’s too expensive, but it’s called performance marketing for a reason. You pay when they do something. So, when you’re paying out a commission, it’s because they made a sale. And, quite frankly, it’s probably worthwhile to give them money to market your product than to pay for it what other way you would be marketing your product. You can’t just throw a sign up on your window and have customers run through the door. You gotta do something to work for that business.

Basically, with an affiliate marketer, you are giving them the money to earn that business for you. But that would also bring you to the time thing. You’re saying that you’d spend all this time on people who don’t do anything, but my personal experience has been that people who don’t do anything don’t do anything. They don’t take up your time. And the people who do take up your time are probably trying. Very few people are gonna ask you a million questions if they don’t plan to do anything.

But, you know, you also have to make sure it’s a good fit. The way that we handle our affiliate programs here at Rainmaker Digital is we always offer the benefit of the doubt. Sometimes people will ask you questions, and you’re like, “Are they just wasting my time here?” That’s never how we think about it. We always think about it as an opportunity to educate somebody who just doesn’t know. And whether they use that for us, or whether they use that somewhere else, we know that we’ve established that relationship, and they now trust us. And, perhaps, even if they don’t promote our products, they’ll buy them and use them in the future because they like us.

Sean Jackson: Yeah, but hold on. Let’s go through that one for a second because we’ve seen this before, right? That a lot of people sign up for an affiliate program just so they can get the discount, right, because they buy your product, and-

Jessica Frick: Okay, that’s the scammer part.

Sean Jackson: Yeah. So why, again, open yourself to having to go dig through that and go back and cancel those sales or any of that stuff?

Jessica Frick: Well we have some programs that are big where we will welcome anybody who’s legit and has a legit above board way to promote us that they plan to use. But we also have some programs that are very small, they’re invitation only. You wouldn’t even know about them unless we invited you. The bigger programs, it’s because we have processes in place to watch for that. And, quite frankly, if somebody’s gonna jump through all the hoops to get a discount and pay you for your product, personally, for the most part, I say you let ’em.

Sean Jackson: Mmm. Wow.

Jessica Frick: They’re still givin’ ya money.

Sean Jackson: Wow. I guess I’m just cheap.

Jessica Frick: Well, you know what though? For the most part, people don’t do that. I think that people genuinely are good. And if you have it in your rules that you’re not allowed to do that, most people don’t do that. Some people might do it by accident. I can’t tell you how many people have written us and said, “Oh my gosh. I just noticed I got a commission on my own sale. It must have clicked my link and bought something. I’m sorry. Can you reverse it?”

Sean Jackson: Yeah.

Jessica Frick: Well, we probably saw it anyway, but you saying that kinda makes me wanna let you keep it. But, you know.

Sean Jackson: Well, folks, what do you think? Have you experimented with an affiliate program before? Have you tried it out for your products? Make sure you visit the comments section of the episode, and let us know what you’re doing with affiliate programs. What do you think? Are they worth the time and effort, like Jessica thinks they are? Or are they just too much for too little return? Let us know. And we’ll be right back after this short break.

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Sean Jackson: Welcome back from the break, everyone. And Jessica, let’s get into affiliate marketing with our very special guest.

Jessica Frick: Today we have Brian Littleton, who is president and CEO of ShareASale. Brian founded ShareASale in 2000, and since then his leadership and vision have helped shape the industry into what it is today. We are very excited to have Brian today, and not just because of his affiliate marketing skills and knowledge, but also because he is one of the best piano players I have ever heard after a show. So, Brian, we are super happy to have you.

Brian Littleton: Thank you very much. I’m happy to be here as well.

Sean Jackson: So, Brian, I would like you to kind of inform our audience a little about ShareASale. And, full disclaimer by the way, folks; at our company, we have used ShareASale since the founding of the company. So we’ve been obviously affiliate marketers, and we’ve used ShareASale, so wanted to fully disclose that. So, Brian, what is ShareASale for our audience so they know what you’re about?

Brian Littleton: So, ShareASale is an affiliate network, which means it’s a platform for both a online retailer and an online publisher, such as the blogger, to meet and interact and basically have publishers earning commissions from various retailers for referring traffic. So, we’re one of the largest here in the United States, and we were recently acquired by Affiliate Window out of the U.K. to become really what is the largest global affiliate network that there is.

Sean Jackson: Gotcha. And you have about how many active publishers and advertisers?

Brian Littleton: Active publishers, a little over 100,000. Advertisers is somewhere around 4,500 or so, depending on some of the decisions, whether you’re counting private programs or not, but it’s a very large network having been built over the last 17 years.

Sean Jackson: And basically if I have a product that I’m selling … it could be a digital good, right? I could sell a t-shirt or I could be selling an ebook, right? I would go to someone like ShareASale and say, “Here is my product. I’d like to pay a commission for people who refer traffic to me. And that could be for clicks, sales, et cetera.” Fairly flexible, right? But it’s essentially a transaction between someone who has something to sell and someone who’s referring traffic to you. Is that essentially correct?

Brian Littleton: Yes, I would say the important distinction there is that it’s based off performance. We very rarely get into a per-click model. I would call that more of a pure advertising model, but it’s really based on performance. So it’s the sale of products, whether that’s digital goods or retail goods like fashion or what not. It’s all about the performance, which makes it a kind of a win-win arrangement for the publisher and the retailer.

Sean Jackson: Got it.

Why Performance Marketing and Affiliate Marketing in Particular is a Growing Trend

Jessica Frick: Now, Brian, you are also heavily involved in The Performance Marketing Association. For those who are listening, that’s thepma.org. Brian, can you tell us a little bit about why you believe it’s important not only to run your business, but to be so heavily involved with this association in particular?

Brian Littleton: Sure. Yeah, the performance marketing industry in general is just so unique; we’re different than other advertising models, we have different concerns, and it really wasn’t being represented by some of the larger groups that were in existence, such as maybe even the IAB or what not. But, that’s not a critique on them. It just wasn’t represented to the way that we felt it needed to be. So, it’s the only way that we’re really represented.

So we formed it. As one of the founding members, this was several years ago, I’m not even sure how many years at this point, but I became more heavily involved several years after I became the president of that organization, on the board of directors, and really tried to drive that forward. I’m still a member. I’m not the president any longer, as Rachel Honoway, the CEO of FMTC, has taken over that role. But it’s a very important thing for the industry to have.

Sean Jackson: And let me go through that, because performance marketing, for clarification sake, is very different than traditional online advertising, which tends to be display networks, right? Would you consider the barometer of performance marketing is the fact that, if you’re doing this type of marketing, you should be seeing a revenue gain? Is that essentially … that there should be something that you can track back to that says, This is revenue that we’re generating, versus more of your traditional display or even content marketing for that matter?

Brian Littleton: Well, it’s in it s most simple form, one of the ways I describe it is … so a traditional advertising campaign would have a budget. You’d say, “Okay. I want to spend $10,000 here. That’s my budget on display advertising. That’s it.” And then the publisher would kind of decide what the rates are, and you’d figure out how many impressions or clicks or whatever that added up to, and as soon as you got to 10,000, then it would end.

In a performance marketing relationship, you really don’t have a budget. The idea is that every time you are paying out a commission, you’re also receiving revenue from the sale of a product. So, if you’re selling a digital good and it costs $100 and your commission is $10 out to a publisher, you don’t really have a budget to spend because every time this happens, you’re actually winning. So it becomes a very different relationship for both of those parties and, quite frankly, can be much more lucrative in the right situation when the publisher matches the retailer.

Jessica Frick: And I think that that’s a really awesome point to bring us to the next question that I have for you, Brian. We are seeing performance marketing grow in a lot of areas that it previously didn’t apply to. I think people previously considered affiliate marketing kind of a dirty word, but now more merchants and digital entrepreneurs are using performance marketing to help grow their business. Who would you say would be ideal for an affiliate program, and who would not be ideal?

Brian Littleton: Well I’ve definitely been surprised over the years that the number of people who have come in and made this work when I would have said, “Ooh, I don’t know if that’s going to work here.” But, quite honestly, it’s anybody that’s selling a product, from a retailer perspective, anybody that’s selling a product or really even has any kind of measurable action, such as a lead generation or a form fill out, or whatever.

Anything can work with affiliate marketing. We’re talking about kind of the oldest tactic in the book, from a sales perspective, is to pay someone else a commission to refer business to you. Now that’s been going on since the Stone Age, so it’s just automated with the Internet and computers nowadays, but it’s a very old method. So anybody selling a product definitely can get involved.

From a publisher perspective, anyone with an audience of any kind. And that can be a small audience or a large audience. With both, you can be successful. One of the benefits of the performance model is an advertiser retailer can still work with very small publishers because everything is on that win-win basis that I was talking about earlier. So, even if a publisher is only sending five customers per month, that’s still another five that they get to add to their bucket for the affiliate channel, and it adds up in that manner.

It takes them no more resources to manage that group of people because they have platforms to work on, such as ShareASale, that allows them to manage 100 or 1,000 publishers all referring these five customers, and that adds up to a pretty good result at the end of the day. So we have seen a lot of media companies getting into that that have an audience, whether it’s a social media, Instagrammer, whether it’s an old-media publication, anybody that has that kind of audience can really get involved.

How to Structure an Affiliate Program Correctly

Sean Jackson: All right. So, Brian, I’m going to play the devil’s advocate, which is what I always do on the show. All right. So, I have a product. Let’s say it is again a real product that people are buying, and I decide to run an affiliate program with ShareASale, okay? And, I go out there … well, first off, I want to be very cautious about this. So the first thing I want to do is try to set a really low commission.

And, afterwards, I’m probably going to be really, really frustrated with the lack of results that I’m getting, and so I’m just going to abandon the damn thing. So, help me, the idiot guy who’s doing that, figure out a better way to do it. Talk to me as someone who owns a product. What are some of the best tactics that I can be using with something like ShareASale to really start driving that performance mark.

Brian Littleton: Well, you really have to consider the commission, quite frankly, and where you started. You were cautious in your approach, and you decided you wanted to set a low commission. And your cautious approach there probably cost you the ability to even get the thing started and going in that hypothetical example.

If you look at it from your own perspective, you are a publisher of media, and if someone approached you with your own offer, is that something where you could see an income stream that would make it worthwhile of your time spent? And, when you don’t, it’s obviously going to be very difficult to grow that program.

I always argue that a retailer or anybody selling a product is much better off to offer a very, very high commission. Don’t think of this as a cost-control/budget-control channel. It’s more of a new customer growth and acquisition channel, which typically gets a little more funding or interest. When you think of it that way, when you offer someone a very high commission, but do so for a very short period of time, say if I were to tell you, “Okay, I’ll give you a very high commission for the first 30 days of this program being launched,” there’s only a couple things that can happen.

One: I could blow it completely out of the water, and you’d end up spending a little bit more money than you wanted to. Or, the other option is I would not do that. I would not generate the results. It wouldn’t make any difference. It would be a zero. In both cases, you’ve actually earned way more than you thought you did because you now have the information you need to set the appropriate commission going forward. You know that this person either can send you a whole bunch of traffic and a whole bunch of sales, or they can’t. And that information is far more valuable than the difference in commission that you would have paid during that time period. So, in your example, you’ve basically shorted yourself and not allowed yourself to figure out even whether or not the channel was going to work for you, because you were too cautious at the start.

Sean Jackson: All right. So I want to go on this one more time because I know Jessica has a ton of questions, but I have the next part. Okay, so I follow your advice. I get crazy with my commission structure. I’m starting to see some results from it, but I’m also starting to see everybody and their brother-in-law signing up for my affiliate program. And I know some of these are doing it just so they can get a discount, if you will, off the purchase for my product.

Talk to me about the fact that there are so many people that may sign up for a program, but yet so few are actually performing. How does a product guy like me manage that, because that’s going to drive me crazy; I’ve got a thousand affiliates but only 10 are doing anything? Talk to me about that.

Brian Littleton: Yeah, it’s fairly common. I think that even in your own situation, if you think about the affiliate programs that you’ve joined over the years, you’ve probably joined a whole bunch of them that you’ve never actually done anything with. So, that’s not necessarily a bad thing. Sometimes it just takes us time to get around to things we all wish we could do everyday.

But, from a management perspective, it’s not near as difficult as I think as what you’ve laid out there. The platforms that are out there, such as mine in terms of ShareASale, allow you to manage large groups of people with small amounts of time. You can sort them, you can tag them, organize them, communicate with them differently depending on whether or not they’re sending traffic to you or not sending traffic to you. It becomes … that’s what companies like I do. So it’s not as big of a problem as maybe has been laid out.

Activating those people is the same type of strategy that I’d just laid out with your earlier question, which is to say, Hey, if it’s not working with this 10% commission or this 20% commission, and I find somebody in my program that I really, really want to activate, then you have to make them an offer. You have to get them moving in some way, shape, or form. And it might not be an offer that lasts forever, but it is something that you can try to get them off of the mat with, so to speak. And once you do that, it becomes … again, the information you learn from that becomes the most important piece.

Sean Jackson: Yeah. And I’m going to close this particular section because I will tell you from our own experience, not only working with your team but just in general, there is, I think, a fallacy that when you think of an affiliate program, you’re thinking that all of your sales are going to be coming from that. And the reality … it doesn’t.

And, even in our own business, I see the mix, right? And there are cases where we will spend a lot for certain affiliates, but the overall mix of revenue that comes both from performance marketing as well as organic marketing as well as display marketing, it’s the mix that you look at. And so I think, when you are thinking about those commission rates, realize that not every sale is going to have that extremely high commission rate tied to it. So, it’s something to consider that when you say yes or no to an affiliate program as a product producer, realize that it is just one facet of the revenue stream, but not 100% of it. Jess, what do you have?

Do You Really Need an Affiliate Manager?

Jessica Frick: One of my big questions for you, Brian, and you know that I already know the answer, but this is more to hear you tell the answer to everybody else, do you really need an affiliate manager or can you do it yourself?

Brian Littleton: Well, that really depends on the company and the situation. I think that for most entrepreneurs, and especially those in small companies, you can do it yourself. You can use the tools that are available to your on the platforms. There’s so much information out there to read about, blogs, and conferences to attend to get the information that you need to do it yourself.

Once it gets to a certain point, you gotta think it’s probably a better case that you have someone who has experience in those areas to grow it to the next level, whether that’s an internal resource, such as an affiliate manager or an external resource such as an agency, those are things that are definitely possibilities down the road. But, it’s not a super scary place to be. Like I was saying earlier, it’s the oldest trick in the book. You’re paying someone commission to send you traffic and send you sales. So as long as you just keep thinking about it that way, it’s not too terribly complicated.

The other really important tool to have, and I guess this makes the decision for you, if you have this or don’t have it, but you need a lot of common sense in the affiliate channel. You need to be able to look at an affiliate and say, “All right. The things that they’re doing, the traffic that they’re sending to me, I’m looking at their site, I’m looking at who they are, and this doesn’t make any sense to me.” If it doesn’t make any sense to you, it’s probably a case where you need to look at it a little bit deeper. So if you have that, I think you can definitely manage that on your own.

Sean Jackson: When you say an affiliate network, though, manage an affiliate network, it’s really like managing an independent sales force, right? I mean, I’m old, Brian, so I remember independent sales reps, and oftentimes there would be specific promotions for them, there would be people that you’d kick off for lack of performance or other reasons. But you are managing an independent sales group that really didn’t get a paycheck from you, but they did get a financial benefit from you. So would you say that mentality helps us think of them as, what would you need to inspire an outside sales force, knowing they’re not employed by the company? Is that the right mentality to have in looking at affiliate management overall?

Brian Littleton: Yes, and I think that you need to add in the fact that they’re also not only involved in this relationship with you, but that they have another 10 or 20 or 50 companies that they’re working with on this arrangement. So you need to be able to get their attention in that way as well. They’re very independent, they don’t work for you, they’re not just going to just do what you tell them to do. But you need to make your product and your offer look attractive.

The Future of Affiliate Marketing

Jessica Frick: Now, for the last question, because I know that we’re nearing the end of our time with you, where do you see the industry going? I know that there was a lot of concern about Nexus laws and Internet sale tax reform. What do you see the next five years looking like for those who employee affiliate marketing to grow their business?

Brian Littleton: It’s a very bright future, I can tell you that. It’s so exciting everyday, to be honest. To be in this space is to take advantage of every single innovation in terms of publishing, in terms of apps, retailer innovations, all those kinds of things. You get to take advantage of it because of where you sit in the affiliate marketing industry.

There’s never going to be a time when telling somebody that you’ll pay them a commission to refer you a customer is not going to be a popular option in the retailer world, right? It’s always going to be a very popular option. And so, in that case you’re sitting in the best possible seat you can when you’re in the middle of this channel. So, the exciting times for me are to watch publishers, both new and old, realize that they can make quite a significant sum of money in this industry, and for retailers to realize that, Hey, all this money that I’m spending on display ads …” or “All this money I’m spending on all this stuff … I could probably focus on my partners in the affiliate channel and get a much better return for that.” As we continue to see that grow every single year, it’s really exciting, and a great place to be.

I think the future there is extremely bright. The issues that revolve around Nexus and some of the tax issues that you touched on are things that are definitely going to happen and things that we have to work through as an industry, which is why we have things like The PMA. But they’re nowhere near things that are going to be causing a really big problem for us.

Sean Jackson: And I think there’s a trend, to kind of finalize on your point. One of the trends that I’m seeing is how more mainstream publishers, Business Insider, which is owned the parent company that acquired your company, Business Insider is doing a lot more with affiliate marketing on their site, specifically around digital goods. I mean, I’ve seen you-to-me affiliate programs that they’re pushing to their audience, et cetera. So wouldn’t you say, to kinda conclude on this idea of trends, that it’s not just the independent bloggers that are part of affiliates, you’re starting to see that mainstream media traffic moving there. What do you think?

Brian Littleton: Absolutely. Mainstream media is starting to figure out this channel a little bit. I mean, you’ve seen them experiment with all kinds of different things over the years to try to monetize large volumes of traffic, and they’re looking at this as well. New media is looking at this. There’s a trend in media in general, where you no longer have to be a mass-media producer to have a large audience. That’s kind of the social media phenomenon or whatnot.

All kinds of media companies are looking at this, and it’s because of all the benefits that we’ve laid out over the last 20 minutes or so: the entry to a single program, the barrier is very, very low. You no longer have to call up a PR department and say, “Hey, I’m interested in doing this. Can you provide the rate sheet?” All that kind of stuff is irrelevant. A publisher simply goes to the affiliate program and says, “Okay, great. They’re paying a 20% commission. I can work with that. I want to see if I can send some traffic over here and how much money I can make from it.” The low barrier to entry is what’s made this really popular for all kinds of media companies.

Sean Jackson: Brian Littleton, founder and CEO of ShareASale. Thank you so much for being on the show, and sharing the insight with our audience. Truly appreciate it.

Brian Littleton: Thanks for having me. I really loved it.

Sean Jackson: And we’ll be right back after this short break.

Hey, everyone. This is Sean Jackson, the host of The Digital Entrepreneur, and I want to ask you a simple question. What is your business framework for selling digital goods online? Now, if the question perplexes you, don t worry you re not alone. Most people don t realize that the most successful digital entrepreneurs have a framework or general process for creating and selling their digital goods in the online space. One of the best free resources is Digital Commerce Academy. Digital Commerce Academy combines online learning with case studies and webinars created by people who make a living selling digital goods online. The best part is that this material is free when you register.

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Some Helpful Resources for the Audience

Sean Jackson: Welcome back from the break, everyone. And, Jessica, it’s now that time of the show where we throw out some resources that our audience may find helpful. Do you have any?

Jessica Frick: Well, can I just say real quick to the audience who doesn’t know you on a personal level, one of the things that I love about being friends with you and not just working with you is that you always find the coolest stuff. You do! And you love to talk about it, which makes me super happy. So, you know what, Sean, normally you’ll do one and I’ll do one, but I know that you’ve got a huge pile, so let’s hear two of yours this week.

Sean Jackson: Oh, okay.

Jessica Frick: Can we do that?

Sean Jackson: Yes, yes. We’ll make it easy. All right, so my first site to recommend, and this one is a fee-based site. It’s a membership site, but I will tell you, I have been with them since 2007/2006. It’s called SearchEngineNews.com. Now, let me tell you, as an SEO type, it was the primary resource that I went to to understand what’s happening in the search and social marketing world, primarily search. Over the years it has morphed; they’ve gotten more features, more tools, et cetera.

But, as someone who also has a life and is very busy running a business, I don’t always have time to kind of peruse through the numerous free sources. I sometimes need a digestible content of what’s happening in search marketing. And as our interview with Eric Inge showed, there’s a lot going on. I go to Search Engine News. Yes, it’s expensive, but it gives me a quick digest, and if I need to get something quick, I can go into their archives and find in-depth analysis. So, if you’re wanting to stay on search-engine information, absolutely recommend Search Engine News.

The second tool, though, that I want to recommend is a tool we actually use on the show, Jess. It’s EZTexting.com. So, I gave a presentation recently about the importance of mobile, how mobile is really defining the landscape and how we need to have a mobile-first approach. And to that, I have been a huge advocate for text messaging, because I know people will read it, I know that it works, I know it has it’s own rules, but the best way to start out is just putting it on your site. And EZTexting.com is something that, again, we use, we don’t get paid for this. I use it, one, because it’s free.

So I started using it for my cub scout troop that I happen to lead. And then I expanded to use it on the show, primarily because it’s free, allows me to move up in the pricing structure based on my needs, and is very simple to use. So, if you want to try text messaging as a functional part of your site or your online marketing, go ahead and take a look at EZTexting.com, that’s my first recommendation. And, of course, if you want to stay with search engine information and really want a quality digest of what’s happening, check out Search Engine News. Those are my two recommendations for the week, Jess.

Jessica Frick: Quick question for you, Sean: Are both of those appropriate for beginners?

Sean Jackson: Oh, good question. I think EZTexting, if you want to play around with text messaging, absolutely. EZTexting is very simple, very good, and it can allow you to grow and start free. Search Engine News, though, it really is … that’s for people that are serious about search engine optimization, hence you’re going to pay for it. If you just want the free stuff out there, you’ll see it. But, the reason I like Search Engine News is because it’s a lot of curated content, a lot of writers out there that are known for their expertise and have been vetted by the staff over there. So, one, Search Engine News, not necessarily for beginners but certainly for people who care about it. And EZTexting, absolutely for beginners.

Jessica Frick: Very cool. Thanks, Sean!

Sean Jackson: Of course, of course. So, Jess, we’re at the end of the show. What is the question for the week we want to leave our audience hanging with?

Jessica Frick: Oh this one’s gonna get controversial, Sean.

Sean Jackson: Mmmm. Yum yum.

Jessica Frick: Which I know you like! Amazon: Digital business best friend or worst enemy?

Sean Jackson: Best friend!

Jessica Frick: Really? You’re going pro on this one?

Sean Jackson: I know. And you will not say it is their best friend?

Jessica Frick: No, Amazon is not a digital business’ best friend.

Sean Jackson: Well, we’ll explore this topic in more depth in the next episode of The Digital Entrepreneur. Have a great week everyone!

Jessica Frick: Thanks for listening.

The Transcript

Does Email Marketing Still Work?

Voiceover: Rainmaker FM.

You’re listening to The Digital Entrepreneur, the show for folks who want to discover smarter ways to create and sell profitable digital goods and services. This podcast is a production of Digital Commerce Institute, the place to be for digital entrepreneurs. For more information, go to Rainmaker.FM/DigitalCommerce.

Sean Jackson: Welcome, everyone, to The Digital Entrepreneur. I’m Sean Jackson. I’m joined, as always, by the lovely Jessica Frick. Jessica, how the Frick are you?

Jessica Frick: I’m great. How the Jackson are you?

Sean Jackson: Always well, always well. Jessica, where did we leave off from our last episode? What was the question of the week that we were wanting everyone to ponder?

Is Email Marketing Still Relevant in a Mobile-First World?

Jessica Frick: We were wondering why you were so snarky when it comes to email, Sean. Maybe that was just my question. Okay, the official question is whether email is still relevant.

Sean Jackson: Email marketing, you mean?

Jessica Frick: Yeah, email marketing.

Sean Jackson: Of course not, but I want to hear why you think you’re right. What say you?

Jessica Frick: It’s not what I think I’m right, Sean. It’s why I am right. Email marketing is still very relevant because by definition, marketing not only helps you increase your sales but enhance your relationships with prospects and existing customers, and email can accomplish that.

Sean Jackson: But don’t you think that with every martech product out there centered on email, that with so many people finally cluing in after decades that email marketing is the number one most effective tool online for marketing, that with so many people doing it, don’t you think it’s going to lose its pizzazz, just because there’s so much more going to be flooding in?

It used to be bad with spam, right? We used to have to worry about spam. Now, we don’t worry about spam. We just worry about every single thing that asks for our email address that sends us a weekly or daily email of something. Don’t you think it’s going to lose its relevance just because of the volume?

Jessica Frick: Oh yeah, I think that there are some tricks that are played out. You can’t turn around without trying to access something someone online promised you with a post without having to put your email in. Then you know you’re going to get like 25 emails after this. You just unsubscribe with the first one. There’s so much static right now in the marketplace, which is why I think it’s important that email marketing be done correctly.

I think that you need to be invited. I think that spam obviously is still done even with people who know better. We see it all the time in the space, especially with digital entrepreneurs. That doesn’t mean that it’s okay. When done correctly, I think that it has a tremendous amount of value for a digital business.

Sean Jackson: Yeah, I think it obviously has value. This is something that we’ve grown a whole business from, the strength of our email list. The way that we had people wanting to give us that information. The way that we interact. The way that we put it together. But certainly, everyone else is clued-in on it. Every martech solution out there now has some form of intelligent-based email sending.

I think as more and more people adopt it, then the inbox is going to be cluttered up with a lot of things that are going to pull your attention away to such an extent that you’ll be like, “Crap, whatever you’re sending me, I don’t want to read it because I’m just getting overloaded.” But we’ve always had that.

The Trends in Email Marketing You Need to Consider

Sean Jackson: Let me tell you why I push back on the relevancy. I will say this, I think you used to be able to send an email to an opt-in list — someone who opts-in — and in doing so, because there wasn’t a deluge of quality emails, then it was easier to stand out. I think now for your emails to be relevant, you really have to put a lot more time into them.

It used to be very easy, I think, but now to maintain the relevancy, you’re going to have to spend time. I think it’s going to also have to be a function not only of design because of how many people read email on their mobile device, but I also think you’re going to have to be looking to the future, specifically HTML5 video. Now iOS 10 supports HTML5 video in the email program. Now, maybe your email is a video embedded in the email that you send to somebody. Think about that for a second.

Jessica Frick: That’s definitely an interesting thought, Sean.

Sean Jackson: Yeah, because then they’re talking about carousel design, when you can swipe back and forth. I think with so many people reading email now in a mobile device that you’re going to start to see people trying to stand out. That means that you’re going to have to be even more on the forefront. Or you’re going to have to have a very deep personal relationship with the person that you are giving your email address to.

I’ll give a case in point. A lot of people know we are big fans of Dave Pell and his NextDraft daily email letter that comes out. If you don’t go to NextDraft and sign up right now, you’re missing out. He recaps the day stories. I always learn something new, interesting, thought-provoking — whether you agree with his politics or not. It’s not a political thing, but he is going to cause you to think.

Jessica Frick: And if you think Sean is snarky

Sean Jackson: Yeah, Dave is snarky. But at the end of the day, he has a very intimate personal connection with people because he is writing a curated email newsletter with a personal tone of things that really stand out.

Now, I will say this. There’s days I don’t read him, but I will never unsubscribe. I will always peruse it, whether I go in depth or not. I think it’s going to end up, to be relevant, you’re going to have to be a lot more clever, or you’re going to have to be a lot deeper in meaning. What say you?

Jessica Frick: I completely agree. I love theSkimm, which is daily news roundup, but the way that they market via email is also different. That actually makes me want to ask you a question, which kind of sidesteps our question, but it’s still relevant. You mentioned having video or a carousel design. Do you think that it would make email more irrelevant if your email was more interactive, or is the point still to send them back to your web property?

Sean Jackson: I think if your audience is mobile first — which almost all audiences are not every one of them, but a majority of them are — then I think the more interactive the email, the better. We’re coming to expect that in our mobile experience. I certainly think video, which is still the predominant media content outside of text, that on a mobile device the people consume, I would say that you’re going to have to really figure out a way to stay above and beyond and do it in a meaningful way.

But if your audience is still very old-fashioned, text-based, then I think a more rich email, something much more meaningful, not so long actually. That’s another big trend that’s come around because so much people, at least interacting with email on a mobile device, then they’re going to have to be a lot shorter.

I really think you have to look to your audience, realizing that they, in my opinion, are now not going to have to worry about traditional spam, Viagra and credit scores aside, but really thinking about, “Wow, I’m competing for attention, so maybe I have to really stand out to get their initial attention.” And video, in my opinion, would be one way to really stand out in someone’s inbox on their phone.

If you don’t think I’m right, that’s okay, but I will say this. All the trends that I’ve looked at are pointing to the fact that email is still and is predominantly used in online marketing. With everyone cluing in on it, your messaging is going to have to be strong, which means you’re going to have to work harder at it to stay relevant. How’s that?

Jessica Frick: I think you make some very strong points, and I disagree with you less this week than I have in previous weeks.

Sean Jackson: Ooh, well, then we’re going to have to work on a new topic where we could really battle it out. Because we start agreeing on things? Oh my word, that’s going to be a problem.

Jessica Frick: Yeah, I think that it’s important that the message be heard. So long as it’s done right, email marketing is still relevant, but that ability to do it right, that’s where the secret sauce comes in.

Sean Jackson: I think you’re right, and I think it’s just going to get a little harder to stay that relevant. It’s nice that we’re talking about this because, this week, we actually have Darrell Vesterfelt from ConvertKit as our special guest. They’ve really built their whole company on creating a product that helps with email marketing for bloggers. We’re going to talk a little bit about how they grew their company and the tactics and techniques they did as being an email marketing provider. We’ll have Darrell back after this short break.

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How ConvertKit Grew Its Recurring Revenue to More Than $6 Million in Just Two Years

Sean Jackson: Welcome back from the break, everyone. Jessica, please introduce our special guest for today’s show.

Jessica Frick: Today’s guest is someone I’m very excited to introduce and to hear more from. We have Darrell Vesterfelt, who’s head of sales, growth, and business development for ConvertKit. Darrell has worked to help bloggers and authors establish and grow their platforms for more than 10 years. He lives in Nashville with his golden doodle Cooper.

Darrell Vesterfelt: The important stuff.

Jessica Frick: Exactly. Well, I skipped over a whole bunch of other stuff because, if there’s a golden doodle involved, I feel like that’s important.

Darrell Vesterfelt: Very important. Very, very important.

Sean Jackson: Hey, Darrell, welcome to the show. I want to start off with you explaining what the heck ConvertKit is because you guys really came out of nowhere. In 2015, you got started. Then you got some little success, and then all of a sudden, you guys are everywhere. Give our audience a quick high-level view of what the hell ConvertKit is.

Darrell Vesterfelt: Yeah, ConvertKit is an email marketing software built specifically for professional bloggers. What we mean when we say ‘professional bloggers’ is anybody who’s trying to earn money from creating content online. This tool is built from the brain of our CEO, Nathan Barry, who was using other tools like MailChimp and AWeber to sell his ebooks, courses, and all he digital products online.

He wanted a tool that would just take his business to the next level, so he created ConvertKit for himself and then started inviting his friends to use it. It had a slow growth over the first couple of years, and then just in the last few years, we’ve just really exploded. We’re an email marketing tool specifically for content creators — so bloggers, authors, speakers, content creators, freelancers, coaches, consultants, shop owners. Anybody who’s creating online content trying to earn money, we’ve created the email marketing tool for those kind of folks.

Jessica Frick: Now, I’ve seen you guys grow exponentially over the last couple of years. Specifically, you went from a $100,000 to $500,000 paying users in a year. How did you do it?

Darrell Vesterfelt: Yeah, when I joined up in January of 2016, we are at a $100,000 a month in revenue, which was awesome. Just a really great time to come in to the company. I think I was the eighth employee to join. The biggest change that happened when I’ve joined is that we just put a focus on growth.

When there’s a small company — I think you guys know this because you’ve been there before — everybody focuses on everything. Everybody’s doing customer support. Everybody’s focusing on growth and partnerships, and I was one of the first hires that had a single focus when I joined the company. My focus was, “Hey, let’s increase the number of customers we have. Let’s increase the revenue number.” Like you said, we went from $100,000 to $500,000 a month in revenue in just 12 months. I think it was because we took a very specific focus, so that was the first thing.

But I walked into a very lucky situation for a lot of reasons. The biggest one is that ConvertKit had a very, very specific niche focus. That was huge. I don’t even think that we realized how big of a deal that was at the beginning, but I would attribute all of our success and growth in marketing to that very, very specific niche. If you go to all of our competitors, they’re going to say, “We’re an email marketing tool for small businesses,” or, “We’re a tool for any kind of business,” or whatever it might be.

We’ve always had the phrase, “We are email marketing for professional bloggers.” We’ve gotten pushback after pushback after pushback on that because people will say, “Well, I’m not a professional blogger, so it’s not for me.” We’ve stood our ground in that a little bit because we know that the reason that we’re winning is because we’re creating a tool for very specific person. Because we’re creating a tool and a product for a very specific person, we might not have all the features that a competitor has — but we still win.

Jessica Frick: You’re not trying to be all things to all people.

Darrell Vesterfelt: We’re trying to be one thing for one person, and so we win. That, to me, was the thing that I walked into, that I had no part of creating whatsoever, that made my job really easy when I did join the first part. I would attribute that single thing as the bedrock, the foundation of all other growth activities that have happened, have happened from that place of being so focused on creating a tool for a person rather than a tool for all people — and that makes it.

Sean Jackson: I do want to go through the specific tactics and some of the things that you introduced in there. But I want to play devil’s advocate, which is pretty much my role on the show.

Darrell Vesterfelt: Love it.

Sean Jackson: I’m going to be Mr. Investor guy. You come to me with this pitch on December 31st. I’m going to be like, “Look, dude, first off, you got Drip out there, which is backed by Leadpages. You’ve got all these email marketing programs, from the SurveyMonkey over to AWeber to Constant Contact, you name it. Really, given how much competition is out there, is there really any hope for you whatsoever? Sure, you’re going to find this little niche as you call it, but how big could that really be?”

That would be my pushback to you on December 31st. What would you say?

Darrell Vesterfelt: You know what, Sean? On December 31st, I might have agreed with you — if I’m being completely honest. I was like, “Yeah, this seems like we’re really limited here. This seems like a really small niche,” and I think this is why people resist this approach. Because it’s like, “Oh my gosh, it’s so small.” The market for email marketing tools is billions of dollars a year. It is a massive industry.

For us to pick a very small sliver of that seemed crazy, and people thought we are crazy. Our customers even sometimes thought we were crazy. We thought we were crazy, but I think the reason that it won is because email marketing is a red ocean. It’s not a blue ocean anymore. There are more competitors out there than ever. How do we stand apart from a competitor?

Well, one of the ways that we can stand apart is playing this feature war battle where we’re always releasing the next new thing, the next cool feature, the next thing that will set us apart, as a feature, from our competitors. Well, the problem is, that’s really, really expensive to do. I’m going to have to pay all these developer hours to release these new features. Then what happens is you have a tool like Infusionsoft that has just added feature after feature after feature after feature, and it’s confusing. Like, “We have affiliate marketing, email marketing. We have e-commerce. We have check out pages.” It’s confusing.

Jessica Frick: I feel like there’s a nickname in there.

Darrell Vesterfelt: Confusionsoft, I think. Yeah. You just bloat the product, so we came into the market, Sean, saying, “What do people who are like us need?” Well, they need a powerful tool that’s easy to understand. We’re not going to release a ton of features for everybody. If we release features for everybody, then we run into the ONTRAPORT and the Infusionsoft problem where, sure, very, very powerful tool, but it’s confusing as hell for our users.

Because we knew our users and because we were our users I was using ConvertKit before I ever started working at ConvertKit. Nathan built ConvertKit for his own info-product business. We knew exactly what we needed. We knew exactly what our friends needed, so we decided, instead of playing the feature war, we’re going to play the niche war. We’re going to put this stake in the ground, and we’re going to say, “We are for bloggers, period.”

Now people who aren’t bloggers use that. So now we’re creating the tool specific to a person, and we’re winning. We’re winning not because we have the most features, but we have the right features. We’re winning because we’re creating the tool for this person specifically rather than creating a tool that hopefully ‘everybody can use.’

The One ‘Secret’ Tactic That Darrell Uses to Exponentially Grow Their Customer Base

Sean Jackson: Let me jump in. I want to go through some actual tactics here because literally in front of me is a screen from Baremetrics that shows your actual growth rate. I’m comparing between 2015 and 2016, and the lines are so drastically different. 2015 looked flat with a little curving up in October, and then all of 2016 looks like a straight line going to the moon.

Talk to our audience about the tactics you did. You started January 1st. You guys had your niche identified. Everyone thought you were crazy, which is great. You get in there. Let’s talk about those months and what you started to do by focusing solely on growth because you’re the only guy there focusing on growth. What did you start to do? What were some of the challenges, and what were some of the things that worked for you?

Darrell Vesterfelt: Yeah, the biggest focus that I had right out the gate was doing partner webinars. The reason I did that is because, in the niche that we had picked, the blogging niche, webinars were a language that people could understand.

We came in, we honestly started trying doing webinars with a pitch for an annual plan, which I think was $300, so for $300, you get a year of ConvertKit. You get all these bonuses, which is kind of the general plan for webinars that people have had. “We’re going to come. We’ll teach you for 30 or 45 minutes. Then we’re going to pitch you a couple hundred dollar product, and then you buy.” We would convert, on those webinars, maybe five or 10 people into customers.

When I came in, I said, “Let’s rethink the game a little bit,” because yes, webinars are the language that people speak in this industry, but also, people kind of hate webinars. Why do people hate webinars? People hate webinars because they feel this pressure to buy. Or the thing that they are asked to spend money on isn’t relevant to them. Or the teaching is self-serving to the person presenting, and it’s not serving to the audience.

The first thing I did is said, “We’re going to do partner webinars because it’s a proven method. It works, but we’re going to change it up a little bit. We’re going to do it different than anybody else in our space whatsoever.” So we did what I call the ‘no-pitch webinar.’

We would get on, and I would teach the highest value content I could that was relevant to our product, which in this case was how to grow your email list. I spent a lot of time — I think there’s a 115 slides in my presentation — helping people with a proven method to grow their email list. Then, at the end of the webinar, instead of saying, “Hey, thank you so much for learning, spend $300,” I actually just gave away everything for free. I gave away the software for free. I gave away ebooks, courses, all these bonuses. I think it was $300 in value worth of stuff. We gave it away absolutely free.

Sean Jackson: So then you’re looking for a job on January 2nd with that approach?

Darrell Vesterfelt: Yeah.

Sean Jackson: Did you face any resistance to that? Did you face any resistance internally to giving away the product and all this information for free?

Darrell Vesterfelt: I did at first, but we have a culture at ConvertKit that I really love — that is always be testing. We tested this out with a few webinars, and what we found, Sean, is that people were so much more apt to try out our software when there was no money exchange at all.

So, “Hey, we’re going to give you 30 days of this product for free. We’re going to give you this $200 course for free. We’re going to give you this $50 ebook for free. We’re going to give all this stuff away, absolutely free. All you have to do is try it out.” Because we had built this goodwill with people, it was very easy for people to say, “Oh, I’ll try it out. I’m using MailChimp, AWeber, Mad Mimi, FeedBlitz, or anything else. I’ll just try it out. There’s no risk whatsoever for me, so I’m going to try it out.”

People would try it out, and they would either decide that it was a tool that was good for them or it wasn’t. So it was a lot easier for us to push. I think I taught something like 115 webinars with 60,000 registrants total in the last year. We went all in on this. The way that we did it, too, is we knew that we were brand new, so we didn’t have an audience yet. We would partner with people who had audience of our core users.

Jessica Frick: Like StudioPress?

Darrell Vesterfelt: Like StudioPress. That was a great webinar, actually.

Jessica Frick: We got a lot of really good feedback.

Darrell Vesterfelt: Yeah, what we do is we say, “Hey, we’ll compensate you.” This is the traditional partner webinar style. The thing that we would do differently, Sean — because there was no pitch and no money being gathered on that webinar — is one, partners felt a lot more confident in promoting it. So we’d get higher registration totals than I think normally would happen because they could say to their audience, “Hey, they’re not going to ask you to spend any money. They’re not going to make a pitch for you to buy a product afterwards. There’s a bunch of free bonuses.”

So we’d get registration numbers at a higher level. Then we have an affiliate program that would pay 30 percent month over month for the accounts that decided to stick with ConvertKit, for the lifetime of those accounts. That was another win because now these people could build recurring revenue instead of maybe just this one-time payout from an affiliate webinar. They would then get the opportunity to build recurring revenue that every month they would get the same revenue by building up through our affiliate program.

Sean Jackson: How did that work, by the way? We here have experimented with both measures. We’ve experimented where they give you tons of money or give you a little piece every single month. I would say that, for some people in the affiliate space, the big check is what gets their attention. Getting a $30 check or $20 check month over month, even though it could be for years, they don’t see the same value.

How did you go through that? I think affiliate programs are hugely important in our space. Not everyone does it right. So how did you keep those people interested knowing that you’re not giving them a huge amount on every single check?

Darrell Vesterfelt: That was a key. To me, it was just a numbers game. Most people there’s a very sexy flashy thing when I can send somebody a check for $5,000 right out of the gate, but the reality is, if our average customer is around for 11 months, 13 months, 18 months, then that number gets really dwarfed the longer that this happens.

I would just lay out the numbers side by side, “Hey, we’re more than happy to pay you out at a one-time fee, but I think you’d rather have this building out month over month because, six months in, you’re going to dwarf what this one-time pay out would be.”

The other thing that happened is we went after a key promoter right out of the gate named Pat Flynn. Pat from Smart Passive Income, has awesome blog and podcast, he started using ConvertKit and then became a keystone affiliate. Anything that Pat would do it made it a lot easier for everybody else to follow suit.

Pat was really pumped about this idea. He felt like it really fit his brand to do the no-pitch webinar. He was okay getting the month-to-month referral. The fact that then Pat publishes his income report really helped us out as well. But having that keystone affiliate and partner, doing it first and being very excited about it, really made it easier for all these other partners to follow a suit. If somebody at the top of the industry does it, it just opens the door for everybody else to follow suit.

Sean Jackson: I want to go through that for a second. When I was reading about your story, I was like, “How did they get to all of these people to do these no-pitch webinars?” One of the things that I read, and correct me if I’m wrong, that because you did have people who were professional bloggers, back to your niche, you could look at those existing customers and go and say, “You have a pretty big site. Can I reach out to these people who are already using the product?”

So for you, correct me if I’m wrong, but I think part of your initial work was just going to your existing customer base, who were bloggers, and say, “We’d like to do this no-pitch webinar.” Is that correct?

Darrell Vesterfelt: Yeah, that’s one of the first things I did. The first two things I did is, I tapped my existing network because I’ve been in the space for more than 10 years. So I tapped my existing network, one. Two, I just looked at our customers, and it was really awesome.

At the point I joined, I think we had 1,800 or 2,000 customers, and I just would say, “Who are our top customers, and which one of them would be a good fit for our webinar? Oh, by the way, we have the most generous affiliate program for email marketing service out there. Would you be interested in joining? Oh, by the way, we’ll also do all the work. All you have to do is send an email.”

I think we built up a reputation over time of, “Hey, they teach really high-quality content,” number one. Number two, people are getting good-size monthly payouts from it. Number three, we had the relationship, either as a customer or as a network that had been built up over about a decade.

Sean Jackson: These were your primary tactics that you used in 2016. Am I correct?

Darrell Vesterfelt: Yeah, but the webinar is definitely the biggest one.

Why Focusing On Just a Small Group of People Can Potentially Create a $100 Million Company

Sean Jackson: Let’s go through this. I was reading a great article this morning. Dennis Mortensen, who owns x.ai it’s the automated intelligence for planning, meeting with somebody via email. He made a very interesting observation. He said, “Once you get to a million in annual recurring revenue, you’ve proven that there’s a market for it. Once you get to $10 million in annual recurring revenue, you’ve proven that you can scale it.”

Right now, where you guys sit, and I think you’re at a very interesting point. Obviously, a lot of people listening to this are like, “Oh my gosh, they were at $5,000 a month, and now they are $500,000 a month or almost $600,000.” That, in and of itself, in my opinion, sounds like just blocking and tackling. Hiring somebody who’s focused on this, finding the right value proposition for the audience, and just showing up every day and focusing on growth.

But is it a challenge for you guys going forward to get to that $10 million mark? You’re at $6 million plus now. Where is the next big infliction point for you? What are some of the ideas that you guys are thinking about? Or is it just going to be blocking and tackling like you’ve been doing?

Darrell Vesterfelt: We’ll continue to do the blocking and tackling. I think where we’re at we just passed $7 million in annual revenue. What we’re doing is we’re getting smarter with the blocking and tackling. This is now we’re thinking how we can automate these processes, how we can do more with a small team.

The other thing, Sean, is now I’m not the only one focused on it, but we only have three people. We’ve gone from one to three. Most companies who have our kind of annual revenue have two or three times the amount of people focused on growth.

For us, it’s now automation. How can we continue the same baseline that we had last year, which I think on average was about $35,000 a month in net new revenue growth. How can we continue that with less time, with less energy, and then what strategies can we then layer on top of that?

Last year, we were very focused on webinars, so we’re going to have that same focus in 2017. But on top of that, we’re going to add in a new layer or promotions that we didn’t do last year. Then we’re going to do a new layer of inbound marketing that we didn’t do last year. Right now, our big focus is we’ve created two inbound lead-generating channels for direct sales of high-tier customers. That’s actually beginning to earn as much or more than our webinar channel last year.

It’s a matter of then creating this channel with webinars. I feel like we mastered it last year. So then how do we automate it, and then what’s the next layer that we stack on top of that? We’re not going to give up on this strategy. The strategy is going to continue to perform for us. What’s the next layer, what’s the layer after that, and what’s the layer after that to begin scaling it?

Sean Jackson: I think that it’s fairly true with most SaaS businesses. You kind of start out small, and then as you continue to find that growth and things that work, then you’re starting to look more up market. Because as you were saying, you’re looking at these channels, these inbound channels, for people who tend to spend more. That is now another layer you’re adding on top.

But I think this is the important part of what you said. “Okay, we did the webinar a bit. Okay, we’re done with that. Now let’s go over and do this thing, and let’s go do that thing.” In other words, everything, it sounds like, you guys are stacking one on top of the other as you become proficient in it to continue that systematic process of continuing the growth cycle based on expertise on these different stack layers. Would that be a good way to sum it up?

Darrell Vesterfelt: Yeah, absolutely, and the other thing I’m learning, Sean, too, is stacking is huge. The other thing I’ve learned is this niche is way bigger than we could’ve ever guessed to begin with. I just had a meeting last week with a guy who would be one of our biggest customers to date, and I realized after talking to him there are layers in our niche that we don’t even know exist yet.

Every day, the more that we explore, the deeper that we go into this niche, the more we realize that we’ve been very shallow. We’ve been very shallow in our understanding of who we can serve as a blogger because there are layers of bloggers that we didn’t even ever knew existed that doors are opening up to, and we’re like, “Oh gosh.” We thought this was like $10 million a year kind of space. We think it might be $100 million a year space now.

The more that we’re stacking, the more that we’re kind of diving into discovering the different layers. It’s like an onion — layer after layer after layer after layer of people who would consider themselves bloggers in some ways. It’s just a bigger market than we could’ve ever, ever guessed. The stacking has allowed us to dive into that.

People who are interested in doing affiliate marketing is just one layer, it’s just one layer of potential customers or potential leads that we could gather. As we start stacking these strategies up, we’re finding, “Oh my gosh, there’s 10,000 new people here that we could chase down who are doing different kinds of content creation online.”

Sean Jackson: Darrell, I can’t thank you enough for being on our show today with us and sharing this great insight. It is truly fascinating watching the growth of ConvertKit, to see the things that you guys have put together. I love the fact that you guys said, “We are going to be one thing, and we’re going to be really good at one thing for one group of people.”

As you just ended our conversation, you will be surprised that, that one of group of people is much bigger than you ever thought. Darrell Vesterfelt with ConvertKit, thank you so much for being on our show.

Darrell Vesterfelt: Thanks, guys.

Sean Jackson: Hey, everyone. This is Sean Jackson, the host of The Digital Entrepreneur, and I want to ask you a simple question. What is your business framework for selling digital goods online? Now, if the question perplexes you, don’t worry — you’re not alone. Most people don’t realize that the most successful digital entrepreneurs have a framework or general process for creating and selling their digital goods in the online space.

One of the best free resources is Digital Commerce Academy. Digital Commerce Academy combines online learning with case studies and webinars created by people who make a living selling digital goods online. The best part is that this material is free when you register. Are you interested in joining? Well, I’ll make it easy for you. If you are listening to the show on your phone and are in the continental United States, I want you to send a text message to 313131 with the keyword ‘DIGITS.’ When you send that text message, we will send you a link to the registration form right to your phone.

Are you outside the United States? Don’t worry. Just send us an email to Digits@Rainmaker.FM. Either way, we’ll send you a link to the registration form so that you can sign up for free for Digital Commerce Academy, and as a special bonus, we will also subscribe you to our newsletter when you text or email us so that you can stay informed with the latest insights from the show.

And don’t worry — we respect your privacy, and we will not share your email or phone number, and you can easily unsubscribe at any time. If you want to start building or improving your framework for selling digital goods online, then please send a text to 313131 with the keyword ‘DIGITS,’ or send us an email at Digits@Rainmaker.FM. You won’t be disappointed.

Two Sites You Should Be Looking At This Week

Sean Jackson: Welcome back from the break, everyone, and as usual, Jessica and I, we’re going to share sites and tools that we think you should be looking at. Jessica, what is a site or tool you think our audience should be taking a looking at this week?

Jessica Frick: The one that I want to recommend as a case study is theSkimm — theSkimm.com is a daily email that I mentioned earlier in the show that basically summarizes the days and news. They offer cool tips and things of that nature.

The interesting thing that I love about this is, number one, they write it like a friend. Every day I get the email — and it’s just the highlights with links to more information — and it’s written in that familiar, casual tone. But it’s about important stuff.

Number two, I love that they have experienced most of their growth through referrals. As a matter of fact, in the show notes, I’m going to be including my referral link. I don’t get paid for it, but they make it fun. They gamify it, and I totally want to get more points.

Number three, I love that they have a freemium and a premium model. I actually do pay the $3 a month to have app access, so I don’t always have to stick to just my email. And I get their cool calendar.

Sean Jackson: Really? Wait, wait, wait — they charge you extra for the app?

Jessica Frick: They do.

Sean Jackson: Wow, that’s cool.

Jessica Frick: They do. It’s just a few bucks, but what’s interesting is they don’t just make their money off of the monthly iTunes subscription. They do have advertisers, and the way that they handle the advertisers does not detract from the content, which I think a lot of people don’t do as masterfully as they do.

Sean Jackson: Very cool. That sounds something good to look at both as a case study, as well as something to entertain you for the day.

My recommendation is a site I just ran into, and I am totally blown away. If you are someone who writes online and you’re getting writer’s block or you are someone who really cares about the SEO copywriting space, there is a site called AnswerThePublic.com. It’s done by a company in the UK, I believe. It’s called AnswerThePublic.com.

What you do is, you put in your idea — let’s say you want to write about jewelry — and what it does in a very graphical and intense way is give you meaningful queries from the search engines people are using based on that term. But it’s different in so far as they upend information to it — like who, what, when, and where. What kind of questions are people asking? What type of prepositions are people using? I highly recommend it.

If you are really wanting to write SEO content or maybe a headline or a subject line for an email newsletter, then looking at how people are asking search engines questions may be something that you could use in your subject line or in the beginning of your email copy and then answer it therein. AnswerThePublic.com, we’ll definitely put a link in the show notes. Again, I don’t have a fancy referral link like Jessica does. I just like it.

Jessica Frick: I love the idea because, finally, there’s a way to do this without the spammy side of Quora.

Sean Jackson: Yeah, yeah, exactly. Now, there’s a guy on their site, he’s a scary looking guy, so don’t be freaked out by the video they have. Just put in a term, pick your country — default’s the UK, you can do US — hit “GET QUESTIONS,” and you will see a beautiful graph as well as the raw data. It’s upended by questions and prepositions so that you can really zero in on some headlines.

All right, that’s our two sites — theSkimm.com and AnswerThePublic.com. Take a look at them this week.

Question for the Week: Is Affiliate Marketing Worth Your Time?

Sean Jackson: Jessica, to end the show, what is the question of the week we’d like people to ponder until our next episode?

Jessica Frick: Well, talking about my Skimm’bassador link — again, I don’t get paid for it, I just get cool points — it made me think about affiliate marketing. Sean, you and I have talked about this, but I would like to know your current position. Do you think affiliate marketing is worth it for digital entrepreneurs?

Sean Jackson: Too hard, too hard. Forget about it. It’s too hard. Can’t do it.

Jessica Frick: You think that affiliate marketing is too hard?

Sean Jackson: Yep. Too hard, too little return. What do you say?

Jessica Frick: Oh my gosh, of course I disagree with you, big time. You wanted a controversial one. This one, I will die on this hill, Sean.

Sean Jackson: I will say this that this is a question that will take more than the few seconds we have left, and we will absolutely cover it in the next episode of The Digital Entrepreneur. Everyone, have a great week.

Jessica Frick: Thanks for listening.