July 25, 2019
An update on Club Finch
My goal with Club Finch is to break even within 90 days and generate $100/month in recurring revenue within 180 days. If I can't get to these milestones, I'll evaluate things again and make a decision to keep trying or shut it down.
We're just past the 90-day mark from that post, so it's time to share an update.
As of now, Club Finch has 18 subscribers. Truthfully, this is a really low number. This is roughly one signup every 5 days, which isn't great. Additionally, Club Finch has 41 likes on Facebook.
Unfortunately, none of these free trial subscribers or page likes have converted to paying members. Thus, my revenue is still at $0. In the announcement post, I mentioned $40 in revenue. That turns out to be wrong for two reasons. First, my data was bad as it included my own test subscription for $20. Second, the other subscriber requested a refund because they didn't want to pay for the service and I granted it a couple weeks after writing the initial post.
When it comes to costs, I've accumulated the following:
- Domain name: $12
- ConvertKit: $29/month, 4 months = $116
- Carrd: $19
- Facebook ads: $83.65
Total costs: $230.65
On the bright side, my email content has resonated with the audience. People are attracted to the flight deals I'm sending, and they often click on the link to check out the deal for themselves. My metrics for deal alert emails are as follows:
- 52% open rate
- 24% click rate
Given these engagement numbers, I know my content is engaging to the audience. And really, it makes sense to me – who doesn't want to learn how to fly to Barcelona for $329 nonstop on a full service airline? That was just one of the amazing deals I sent in the trial period.
What's not working
First up, my conversion automation funnel is not working. When I launched, I created a 14-day automation sequence aimed at converting free trial members to paid members. I've had 23 people sign up, and zero of them have converted to paid users. In fact, 5 people unsubscribed to the entire service because of the email reminders to subscribe to premium. Given my cost model, if I could have converted 10% (2-3 people) to paid members, I would have broken even. However, that simply did not happen.
Additionally, the costs to get users to sign up using Facebook Ads are too high. I spent $83.65 on Facebook Ads to generate engagement and signups, resulting in a really poor result. I probably should have spent more to get more data on these numbers, but after the initial results I lost hope.
A new direction
In summary, the experiment has been a failure. Arguably, I haven't spent enough on acquisition and I haven't spent enough time trying to optimize the funnel. However, the "quick win" goal from the initial idea can be considered a fail at this point.
Failure aside, I still like the idea of this service. Additionally, I have many friends and acquaintences who would love to use this service (although none of them want to pay). After some thought, I've decided to reposition Club Finch as a free service. Going forward, membership will be completely free for everyone.
You may be thinking: "How can that work? How will you make money? Won't you just continue losing money?" and you're absolutely right. I have a few ideas and solutions to this problem.
My costs are largely due to paid acquisition and the email marketing system itself. To reduce costs, I'll give up on paid acquisition for now. I'm going to be updating the email copy and landing page to be a bit more social-sharing friendly and I'll incorporate a few tactics to improve virality.
Additionally, I've found a solution to the email marketing cost problem. The solution is a new email marketing provider called SendFox. SendFox is brought to you by the team at Sumo, makers of AppSumo and KingSumo. Sumo's bread and butter is freemium products for internet entrepreneurs. The newest member of their product portfolio, SendFox, is an extremely barebones but low-cost email marketing provider. When I signed up, they were offering lifetime membership for $49. This gets me a list of up to 5,000 subscribers.
Going forward, my costs to continue operations are simply $12/year for the domain name and $19/year for Carrd's premium plan, for a grand total of $31/year.
Possible revenue streams with a free product
I strongly dislike selling user data, invading privacy, and injecting ads into products. This makes it challenging to monetize a free product, as these are the most common go-to solutions. I'm not entirely opposed to advertising, but given my current subscriber size it's pretty much useless to attempt at this time. I definitely will never sell user data or violate a user's privacy, so I can easily kill all those options. I don't have the answer for how Club Finch will make money long term right now, but for now I am going to focus simply on growing the email list. Given the new cost model, I don't need to recoup any recurring revenue for quite some time.
As I mentioned, my focus now is simply growing the list of subscribers for Club Finch. The landing page and all materials have been updated to clarify that the product is now completely free to use. If you're interested in joining Club Finch now that it's free, you can sign up here. If you have feedback or suggestions, please send it my way on email at email@example.com or tweet me @nicroth on Twitter.