Digital Product Marketing Distribution with Email Channel Subscribers

Digital Product Marketing Distribution Channels

Overview

What I’m going to share with you today is one of the most powerful lessons I could ever pass on to you about building a successful business that makes a significant amount of money. It has almost nothing to do with affiliate marketing or selling digital products. Insights we will share here are far more valuable. a completely new way to look at your business.

Key takeaways:

• Most successful businesses focus on building a distribution channel, not just selling a product.
• An email list is a powerful distribution channel for digital products.
• By providing valuable content and building goodwill, you can turn email subscribers into paying customers.
• A single email subscriber can be worth over $100 per year in revenue.

Introduction

Contrary to popular belief, Starbucks’ primary business is not coffee. While coffee is their product, the company’s true strength lies in its extensive distribution network, encompassing both physical stores and digital platforms. These channels enable Starbucks to reach a vast global audience, transforming their coffee beans into a thriving business.

• An estimated 13% of Starbucks’ revenue comes from its digital channels, highlighting the importance of distribution channels in driving business growth.

Distribution Channels: The Lifeblood of Business

Distribution channels serve as the mediums through which marketing messages resonate and goods are sold to a receptive audience. They act as the bridges that connect businesses to their target customers, enabling them to deliver their products and services efficiently and effectively.

• A study by HubSpot found that 73% of marketers believe that a strong distribution strategy is essential for success.
• Companies with strong distribution channels are more likely to achieve their revenue goals. (Source: McKinsey & Company)
• An email list is one of the most effective distribution channels for digital products, with an average conversion rate of 2.6%. (Source: Litmus)
• A single email subscriber can be worth over $100 per year in revenue. (Source: McKinsey & Company)
• Businesses that nurture their email lists with valuable content are more likely to see higher open rates, click-through rates, and conversion rates. (Source: Salesforce)

One Key Ingredient for a Flourishing Digital Business

The miracle of building a business in the Internet age is that it allows a single person to build a massive global virtual distribution channel with nothing more than a laptop.

For example, Cristina is a full-time mom with two kids and has spent the past two years writing a few books on parenting tips for new mothers. Now that her books are done, her primary goal has been to sell those books and bring in some revenue.

Most people, especially small business owners, would agree with that logic: you create a product or service and then you focus on selling it. But, there’s a reason that the average annual revenue for a small business in the US is only forty four thousand dollars.

The Path to a Million Dollar Small Business

Cristina thinks her business is selling books. Her books are a product but a product is never a business. Here’s what I mean to demonstrate the difference between building a business where the primary focus is on selling books and building a business where the primary focus is on building a distribution channel.

Cristina could sell her book on amazon.com in the Kindle Store for nine dollars and ninety nine cents. For every sale she makes to her audience anywhere in the world, be it in usa or canada or uk, a percent profit is taken by Amazon. She gets seven dollars per book. In order to make seven thousand dollars per month, she would have to find a way to sell books per month.

In Spite of the massive commission, she doesn’t get any of her customers’ information such as their name or email address. So her only way to make money is to constantly sell books every single day to new customers.

A Business cannot grow by just acquiring new customers. It will only grow by identifying a target group or segment, retaining them, gaining referrals through them. You have to build a relationship in order to justify the cost of acquisition. Be it SaaS or any other product business the formula for a successful business remains the same.

Power of Ideal Customer Profile (ICP)

Irrespective of whether you run an Online Shopping Platform using woocommerce or Digital software solutions blogs using wordpress or Digital Development Services web application using react native or Digital Media Entrepreneurs using adobe tools or E-learning Courses and Tutoring Learning Management Website you need to understand the ideal customer profile or icp.

Primary purpose of an icp or ideal customer profile is to deliver a very specific message to the customer on the internet as we instinctively adjust our message to our audience in everyday life. An ICP helps imagine an ideal customer profile and helps us draft messages that can provoke the consumer to react.

ICP helps us better understand the exact type of customers we have and the exact types of customers we should be targeting be in SaaS or eCommerce or Media Agency.

Struggle to Define an Ideal Customer Profile

Given the paucity of resources, especially small businesses both in the product and service sector struggle to understand and define the ICP or Ideal Customer Profile. So, Cristina might be able to earn some revenue and spend some of that seven dollars in profit on advertising but never be able to build a lasting relationship.

Even the small revenue she makes will decrease her profits over time and her ability to sustain her business as advertisements eat up the revenue. Not a sound business model and yet it’s what tens of thousands of authors attempt to do each and every day now.

Let’s take another approach instead of focusing on book sales. Let’s focus on building her distribution channel which in this case is a list of moms who subscribe to her free email newsletter. By sending her readers valuable information via email on a regular basis, she can enhance her chances of gaining patronage. Goodwill is everything when it comes to the value of your distribution channel.

Goodwill and Loyalty = Recurring Revenue

Cristina can build a solid relationship with them and she can become known, liked and trusted for the value she provides. This is called goodwill.

If people know, like and trust you they will buy from you. On average an email subscriber to Christina’s list will be worth one dollar per month in revenue if she maintains a high level of goodwill. If she has a list of 5000 readers she should be able to make around five thousand dollars per month by promoting goods and services that would benefit our readers.

20 thousand readers equals twenty thousand dollars per month and so forth over the course of a year. That means each subscriber is worth dollars. This is possible because people tend to stay in your distribution channel and consume your products and services for as long as you continue to create goodwill.

So how can we use Cristina’s book to build her email list ?

Building your Email List or Community

Simple, if each free email subscriber is worth at least 12 $ per year and her book customers are only worth $ 7 in total then it makes a heck of a lot more sense to just give away the book for free in exchange for their email address.

With the addition of a second product that she can offer her new subscribers for 20 $ to 50 $, she will be able to afford to actively market her free book on Facebook’s advertising platform and rapidly increase the speed of her list’s growth to one hundred new subscribers per day.

Within the next 12 months she should have a list of around 100,000 subscribers which should produce around 100,000 $, per month in revenue. Any time she creates a new product for comes across someone else that she’d like to recommend she can do so just by sending out a single email but it gets significantly more interesting when you start to focus on turning those free email subscribers into actual customers their value goes from $ per year to well over $ to $,

Actionable steps:

Define your ideal customer profile (ICP).
Create valuable content that your ICP will appreciate.
Build an email list by offering a free product or service.
Nurture your email list by sending regular, valuable content.
Promote your products and services to your email list.