I had a great product. An immediate financial winner. But you know that gut feeling? Here’s what I found out. (Trust me, it was painful.)
4 min read
This story appears in the
Entrepreneur. Subscribe »
Sleepless, worry-filled nights are normal for any founder. But they shouldn’t continue for weeks. My subconscious mind was telling me something. But what?
I run a company called Personal Trainer Development Center, which, like the name suggests, produces resources to help personal trainers grow their businesses. We do this in many ways — articles, books, an online certification program, and more. And around the time the insomnia hit, we had just created a new resource: It was a print newsletter called Fitness Marketing Monthly. But that can’t be the problem, I thought. The newsletter was a hit!
Consider our numbers. We launched in July 2018 with 1,615 subscribers, who paid a special introductory rate of $39.97 a month. By September, we had subscribers in 62 countries paying as much as $59.97 per issue. This was without much marketing. All told, the newsletter generated $89,685 a month in revenue, with profits of $32,025.
But something was gnawing at me. Despite the profit, something just wasn’t right. So I dove into the details, and by our tenth issue, I decided to kill the newsletter … even though by that point it had added more than $300,000 to my bottom line. Why? Here’s what I learned.
Related: 7 Ways to Make Extra Income Even With a Full-Time Job
Lesson #1: Listen to what customers aren’t saying.
After I launched our certification program in 2016, it earned more than 1,000 unsolicited testimonials. That’s what happens when you change your customers’ lives: They let you know!
The newsletter, on the other hand, generated fewer than a dozen raves. People kept signing up, but they didn’t seem enthusiastic — and six percent of users dropped it each month. At first, I thought that was just the normal churn for a product like this. The strong revenue blinded me to the larger problem.
Lesson #2: Figure out how valuable (or not) you are.
After puzzling over this product for months, I finally brought in a consulting firm to help. They gathered data points and interviewed former and current subscribers. They asked my customers, “What would you do if you didn’t have this newsletter?” Many answered with some version of “I’d just go to the free content on the site, or ask questions in the Facebook group. Most of this stuff is already out there.”
And it got worse. When the consultants asked our customers how they hoped the newsletter would change their business, many of them said they didn’t really know. They just thought it would be valuable. Why? Because I’d said so…and my customers trusted me.
That hurt. Was I abusing their trust?
Related: 4 Essential Tactics for Building a Lifestyle Business
Lesson #3: Reach the right audience.
We created the newsletter for a specific customer: a fitness pro with three to five years’ experience and a full slate of clients, who’s ready to grow their business further.
But that’s not who was reading. Our consultants discovered that 94 percent of subscribers were newer trainers, and their biggest concern was getting more clients. Here we’d been giving them more than 20,000 words a month about opening gyms, marketing new products, writing books, and getting their articles published — none of which was relevant to them.
Once we learned this, we wondered: Do we just refocus the newsletter? It was tempting. But it was doomed to fail. Early-stage trainers don’t tend to have $60 a month to pay for a newsletter long-term, so our churn rate would keep climbing. We had a better idea. Rather than spend a lot producing a monthly print newsletter, we could spend that same money on a bimonthly series of $10-to-$20 books to address this audience’s needs — ideally getting them to a level of success where they’d consider enrolling in our Online Trainer Academy.
Related: 5 Fundamental Tactics for Making Your First 6 Figures, No Matter What Industry You’re In
We could have kept publishing the newsletter for a long time, with a tremendous profit. But at what cost? Our customers trust us with their money and time. And a company that doesn’t respect its customers doesn’t deserve them.
For the record, I now sleep like a baby.