View Single Post
Old 12-31-2004, 09:23 AM  
Marc De
Confirmed User
 
Join Date: Jun 2001
Posts: 632
Quote:
Originally Posted by Far-L
Let's go back to the numbers...

Using my same example from before... Take into account that xsells are down, mailings are down, consoles are down, type ins/bookmarks/one clicks are going to be good only if the site is exclusive, well branded, and worth the price, and whatever else is left over like VOD or Live Show upsells from the member's area to make income with:

These numbers are ambitious imo...

Add xsells @ 12% which only count on joins, not trials... so 12% of 35 joins = approx. 4 joins

Add mailings... if out of those 100 trials say 10% (ambitious) join the mailing list, then that means 10 names and if you got 10% return on those names that would equal one join.

Say on every 100 trials you get 1 console sign up on between 1 and 4 exit consoles presented (ambitious) and add another join...

Then for every 100 trials there are 15 type in or direct non-affiliate joins...

Now you have an additional 21 joins which equal about $47 bucks per based on 4 month aging and 30% retention which comes to an additional $987. Add that to your original earning of about $1650 for a total of $2637 over four months. That would barely cover paying out $25 per join for those first 100 paid trials.

Here is where I tend to hear all the things like "you need to know how to monetize the traffic", and "we make it up on volume". How does volume change anything except the bleedrate? Where else can you monetize or improve percentages?

This is not counting VOD or Live Chat upsells but those numbers are going to have to be amazing. To balance that omission I also didn't count all the other overhead costs associated with running a biz. Some may say they can do these or better percentages to make it worthwhile but I think am presenting a fairly "savvy" level of sales conversion as a measure of core competency.
Far-L - you can't get an average surfer value in 4 months - even if you only keep 6% of the original trials (so in your scenario 6) for 8 more months you're talking another 48 rebills. You should be breaking even in about month 4 and then you starting turning up the profitability from there.

Don't get me wrong, don't operate properly and you can VERY easily go from black to red - just miss a couple of your variables and you could be in trouble. However, that is usually the same in any business, whether it be service, manufacturing, food, etc...
Marc De is offline   Share thread on Digg Share thread on Twitter Share thread on Reddit Share thread on Facebook Reply With Quote