615: Local Newsletters: $200k from 18k subscribers

23:49The content has to be excellent to get people to continue to open it and continue to stay subscribed and be able to view the ads So we'll eventually get into ad sales. But if I'm starting out and I want to do this for Sammamish, which is population 65 ,000, like similar size town, a little bit bigger, like, okay, I don't know if anybody else is attempting to do it here. Maybe it's like ripe to come in and see that market opportunity. The challenge is doing it daily. And I guess you mentioned, well, when I was starting out, I did it once a week and then I moved to three days a week. I guess you could scale it up, but like consistently coming up with great content.

24:24That's all local focused. I'm curious, one, how you source all that stuff, and then how you put it together and do it every day of the week. It's easier than people think. At least it is now after three and a half years of doing it, coming up on four. It's become a habit, yeah. But even in the beginning, it was easier than I thought. Because after a certain amount of time, you become the source, or at least a source, that people can go to to get their press for whatever they're doing or yeah, just that. So you have to just establish yourself as a source and then people will start coming to you.

24:59And then the hard thing actually becomes, and I've always said this and I say this to my head of content all the time that I just hired, it's more important what you don't include than what you do. It's more important what you say no to. Because like you said, you have to keep the content excellent every day. So people keep coming back. So we get sent a lot of things and I'm not going to say anything specific because I don't want to, on the off chance anybody from annapolis is listening to this i don't want to get anybody upset because of saying their event's not cool but we get sent a lot of stuff where i'm just like that isn't gonna go in that's not cool enough it doesn't have broad enough appeal maybe it's just a very specific group of people that want to know this and we're sending out to every single person in annapolis or whatever half of it but we don't do any kind of segment thing like that so we're giving people specific things they're interested in it's just like sometimes you got a side that's not going in.

25:50That's not cool enough. That is not broad enough appeal. But how do we get content? We just look at a bunch of places. There's probably like 50 websites that we check every day. Some combination of the press release sites from the city and county and fire department and organizations like that to the local newspaper. We still have one of those. A couple blogs that post stuff. A couple individual people that are posting stuff regularly. Good content. Yeah, so it's a lot of work to kind of scour through this and compile, I guess, curate what is the most important or most interesting. Yeah, that's why the newsletter has value.

26:26Because if you're going to comb through all these things, understand, or well, even before that step, pick which of them actually matter, understand all of them individually, and then summarize them, that's a lot of work. and the average person, especially the average person who reads our newsletter, like mom with kids or working professional, they don't have three to four hours a day to read all these stories, decide which ones are important, and then actually read through them and understand them enough to tell their friends about them. This is effectively what we do. And so that's why it is valuable.

27:06It's just, it's a time saver. All the information, in the beginning, all the information we got was 100 % public and anybody could have gotten it. Now we are, like I said, the source or a source where people are sending us stuff. And sometimes we have to sit on stories before we can put them out because the business isn't ready to announce that they're opening yet, but we know about it and no one else does or very few other people do. So not everything we're doing now is publicly available. Some people are giving us inside scoops, if you will, pun intended, or press releases that are not getting sent to everybody else.

27:41I don't know. But you really just have to get the ball rolling. You'll find good content in the beginning. And as long as you can do that for a couple months and stay consistent and be a great source, then you'll start getting more content than you care to handle. And that won't be a concern anymore. Or you'll go back to something that you did a while ago. At any point in time, I could throw in a link to our stories of the best coffee shops in town or the best pizza in town. And even better, I can ask you if you agree with my assessment or my writer's assessment of what is the best in town. So you start to build up your own content that if you are light on a day, then you can hand that off or include that.

28:22But also at the end of the day, if you're doing an email newsletter, no one's ever going to complain about getting a shorter email, right? When was the last time you complained? Oh, this email wasn't long enough. No, they just want to get on with their day or they're just reading it. They're reading on the toilet or the reading in the bathroom, waiting in line for coffee or something like that. As long as there's like, I try to make sure there's just like one super, super valuable thing every day, like something that everyone wants to know. And as long as you keep pretty consistently every day, something in there, then you'll become sticky.

28:53And you're organizing these in notion kind of as you're scouring through these 50 different sources, like, okay, that's interesting. Drag it over here. Okay. That's interesting. Drag it over there. Yeah, that's how I did it when it was just me. Now I have an assistant that goes through all the sources and she just does anything that's related to Annapolis. She puts it into Notion. And then I look at that basically as soon as she's done that, like I'm on do not disturb. So I didn't get the notification, but we started recording here at two and it's 256. Now she probably sent a message around two 30 that she had done that for the afternoon.

29:28So I'll go through as soon as she's done. For tomorrow's edition. For tomorrow's edition. And I'll assign the stories. Now that I have two writers as well, we cut off at 3 p.m. So anything that comes in after 3 p.m. will go to the next day's scoop. Today, I'll look at the afternoon assignments and see if there's anything in there that really is important that can't wait until Friday. And I'll write it if so, just because I'm on the podcast during that time when I normally would be looking at what those stories are. But I've just hired that head of content now that that'll be her job is to look through all those stories.

30:01Anything that says Annapolis, my assistant will throw it in there. And then the head of content will sift through like I do right now and decide what's actually important. What do we need to include? What could we include if when we go through the stuff that we need to include, and there's really not that many stories, what might not be totally up to standard, but can definitely, it could fit. And we just need some content because we don't want to do nothing in there. I try to have like eight stories every day, at least something like that on a good, busy, real good day. We might have 16 and they're all really, really short.

30:35Some of them are less than a hundred words. Most of them are less than a hundred words, but if I'm at like five, yeah, maybe I'll let the quality drop down a little bit just so I can get one or two more in there. Yeah. You said something earlier was it's more important what you don't include. And this is my like working theory of podcasting too. It's like, yeah, the episodes you air have to be great, but equally it's the ones that you don't air. They never see the light of day that you decide not to record. It's like, ah, that didn't quite make the cut. And it sounds like it's the same thing here.

31:02And the other parallel is after a while, you get a lot of inbound, right? You get guest pitches or you get story pitches or stuff comes to you. But, you know, people say, hey, you ought to talk to so-and-so. And it sounds like the same thing here. People start to share their events with you versus having to go out and try and source everything yourself. So lots of parallels there. And I think that's pretty interesting. But lots of work on this curation side. And that's where the value comes from. Like, look, we're sifting through these dozens of different sources to bring you the best of the best.

31:32And that's why the newsletter has value. We're about to get to the monetization part, how Naptown Scoop actually makes money every time they hit send. But first, let's take a moment to thank our own sponsors for helping make this episode free for everyone. Let's shift gears and talk about the monetization side. It sounds like it's primarily ad monetized. At what point, like how many subscribers, how many months in did you start selling your first ads on this thing? I learned from somebody, and I can't remember who, that you should be open to it immediately. And so I had a link or like an encouragement in there.

32:06If you want your business in here, let me know. And it was like within the second or third week that somebody reached out and actually ended up agreeing to something. This was a web design agency that wanted to advertise. And I said, I will give you, I think it was five or six ads. I think it was six ads, Six ads, anytime in the next six months, you can use them, but you have to pay$500 today. And for some reason, this person said yes. And so we did that. And that was how we made the first money. I don't know if I did that again, or if then I just started selling like, here's a four pack for this many dollars.

32:40But it was really quick that we started selling ads. Not a lot of ads, but enough ads where I was like, okay, I'm still comfortable spending$1 ,000 on Facebook ads this week, or a couple hundred dollars on Facebook ads this week. because I know that at least on some level, somebody is going to pay to be in here. So the magic T word is traction. I had it and I was like, all right, I have a little bit. Let's do it. I bet you that there will be a lot. And I can go all in on this and still spend a bunch of money on Facebook ads. It took a while to get meaningful dollars, like probably many months, but got some right away.

33:19And I tell people all the time, if they're going to start this thing, you should always have a link or an encouragement to advertise. No matter how many subscribers you have, just get dollars somehow. I like that. Including that in the footer of the email, like your ad here, you'll see your message. Inquire about advertising in future editions just to plant that seed. Yeah, because a lot of people won't see it and think of it. But if you say they can, they'll think, oh yeah, maybe I will reach out. Yeah, you see it. Justin Welsh is one of these examples where you see it like down at the bottom, there's a link to book your sponsorship spot for an upcoming newsletter.

33:55I don't know if he does any vetting of like, I'm not advertising that. There's like an implied endorsement here. Yeah, we definitely did not do a lot of vetting in the beginning, but maybe about a year and started actually doing that. It's like, I only want to be associated with really, really good brands. I think it's illustrative of maybe the type of client that would make sense, especially at that price point where it's like, dude, if you get one new client from this, like it erases your$500 ad expense and then some. But curious how you have it priced today. I think you mentioned we have five different ad slots per day, I guess, probably based on placement and visibility and structure of those ads.

34:32Yeah. So three different kinds. The bottom kind has three each day. So the top one has your logo at the top, a picture up to 150 words. It's the first ad, unless we have a headline story, it's the first thing in the newsletter. So probably about 60 % of the time, it's the top thing anybody sees. Then in the middle, we call it a feature ad, and that has a hundred words, a photo, and that's right in the middle. And then right near our live music section at the bottom, which is our most popular thing, we have three ads we call baseline, which are text only 70 words and a headline and a link and everybody, all these can be linked.

35:12It's funny now at the beginning, those ads I sold that web design guy were headline ads or what a very early version of those. And it was$500 for six of them. Now an individual headline ad, if anybody wants to buy one is$812 and 50 cents. And it goes down with volume. If you're going to buy 12, then that unit cost goes down. If you're going to buy 24, that unit cost goes down. If you're going to go buy 48, be crazy and spread those over the next two years so that the unit cost will go down. Or we have two advertisers that do do that every single week. They just pay a lot of money. But the prices are very, very different from when we first started.

35:52Everything is really just pulling out of thin air. I just, how much does this cost? $500 for six cents. Everything was just thrown out. is there a rule of thumb for X price based on every thousand subscribers or something like that? I heard a rumor back in the day that Morning Brew was charging$70 per thousand. And so I kind of roughly based it on that. And it's actually still kind of around there, our top ad. It's like very loosely based on that, or I don't think it's loosely based on that anymore. Maybe it's just worked out that way that it's still on there. Once it started stabilizing, I used to change prices every week because we would be adding hundreds of subscribers every week.

36:33And I'll be like, I just sold an ad to you for 200 bucks for 800 subscribers and just had a really good run of Facebook ads. And now we have 1600 and I'm not going to charge$200 again. So I would change it every single week. Then I started changing it, I think like every month. And then it was every couple months. And now I just change it every year. And it's not on any kind of, oh, we have this many more subscribers. It should be this much more. now i just i'm basically up it on inventory if we sell out then and it's like we sell out really easily i know it's too low if it's harder but we still sell out i'm like okay we could do a little bump if we're not selling at all thankfully this hasn't happened yet then maybe we stay the same or even worse go lower now it's not really based on any kind of formula it's just based on feel of oh last year we sold all these way too easily okay we'll double the price and then we sold them all out again, but it took longer.

37:27I was like, okay, cool. That's probably a good number. Well, that was two years ago. We doubled it. Last year, we just went up by, I think it was 20%. This year, probably just go up by 10 % and maybe stabilize somewhere around there and just upgrade the prices every year by eight to 10%. Is it most common to sell like a multi-month package? Like, you're going to be featured eight times over the next three months. Is that how it's typically structured? I like to sell long packages. We have people who sign on to be on there every other week for two years. We have people who are on there every other week for one year.

38:01We have some people who are just pretty seasonal, but they're on for the same six months and they'll sign two-year deals for those six months. I just like that because it's easier and also it ups your average client value. There's a, I can't say too much about this, but there's a website that I want to buy right now because I think I can do a lot better. I think that it's a great opportunity and their average, they have way, way more visibility than I do, way more impressions, way more uniques, but their average customer value is like one fifth of mine, which is why I think I can buy it and do really well with it.

38:40But I'm just always trying to increase that. We have a dentist client right now who's on just once a month and our standard is really twice a month. So they're on once a month, but they've been killing it. They've been doing really well with it. So rather than trying to go sell a new client, it's way easier to just sell someone who's already selling with you and increase that customer value. Increase their frequency. Yeah, I went to them and said, hey, do you guys, it's been working out pretty well once a month. I'm going to juice it and you'll get a better unit rate. and you'll be in there more and you've already made your money back.

39:11And then a lot, because I know you told me how many clients you got and I'm kind of guessing what your average customer value is worth based on industry comparisons. And I think I'm probably pretty close. And so it's just way easier to make those sales than to go out and cold call a new person and get a new one. So I'm always trying to increase customer value. And one way to do that is just raise prices every year. And nobody has ever canceled because of the increase. We've had people that advertised, stopped advertising, came back for whatever reason. They came back later, maybe in this case, two years later, and asked for a new proposal.

39:48And I told them and they were like, whoa, that's too expensive for us. We can't do that anymore. But they're also a nonprofit organization. That's a little different. No business, no for-profit business has ever canceled because we raised rates. Was that, so a little bit of inbound based on the call to action at the bottom in the early days, and then a lot of cold calling, a lot of outbound sales trying to get people signed up? No, now a lot of cold calling kind of hit a number where it's, I don't want to call it critical mass because that makes it sound like can't grow anymore. But this is one of those things I just did really well, got really lucky with.

40:20I figured that if I could get a really good partner in town that would just be good. I didn't know why. I just knew it would be good. And there was this guy who was spending money everywhere. He's a realtor, spending money everywhere. I was like, I need to get some money out of this guy because he's just putting his money everywhere. And I bet you I could get a lot. And that would be really good momentum. And like I said, I just know it'll be good. I don't know why, but I know it'll be good. So long story short, we did get him. A lot of cold calling. Finally got a meeting. Finally sold him. and after that inbound leads poured in because it was super validating that this guy who i said he was spending money everywhere and he was but it wasn't just that it wasn't like oh yeah great you got that guy's money and he's spending money everywhere so that's fine he's the best at what he does not even close he's the best like he's the best anecdotally just if you work with him and feel how he makes you feel.

41:18But he's also the best by number. He only sells waterfront houses. He's the number one individual in the state of Maryland by a lot. He's just absolutely the best. And so once we got him in there, it was super validating for us. And we got a ton of inbound leads. And I didn't really do any outbound sales. I would just kind of take meetings with inbound leads. And that's how we got to that$200 ,000 in revenue that we did last year. Now, I've hired a head of sales who does a lot of outbound and has been closing a lot of new deals. He's only about a month in. My goal is 350 this year. That's looking probably not likely, but I think we'll get close to it.

41:59Even if we got to 300, I'd be stoked. 50 % growth in a year after not anywhere near 50 % growth would be a good step up. So yeah, that's the next step. But a lot of inbound just because we got lucky picking this one business. And I was like, I know it'll be good, but I didn't know why. I didn't think anybody would come inbound from it. I just knew it would be a good thing. I knew it'd be a good momentum swing and it was much bigger than I anticipated. Yeah, it's another example of a type of client where if I get one lead from this, even if I get three leads a year, like if I'm selling a million dollar waterfront house, like my commission from that, he raises all that expense.

42:36Plus it's just, it sounds like he wants to be everywhere anyways. And it's like front and center in people's inboxes. It's a smart place to be for that. It's even better than that. His average home price is 2.6 million. So he's definitely making his money back. And then this is the real secret. We do, for the most part, we do exclusive advertisers per industry. If they spend a reasonable amount of money with us, like we're not going to give the $1 ,500 customer,$1 ,500 a year customer exclusivity in their industry, but if they're spending tens of thousands, that's high for us. That would be something that warrants exclusivity.

43:09So I do no other residential real estate agents. And he knows that if he did cancel, if I said the price is now this, and he was like, nope, I'm out. Then I would make probably a maximum of three phone calls. And I would have another real estate agent in there, probably at the new price or close to it. And he would never get back in because we would do exclusive for them too. And he got it first. He was the first agent we've ever had. We've never had another one. And, and, He doesn't want to lose that, I don't think. It sounds like he was kind of the anchor tenant that ended up attracting others as well.

43:44Like if you had a retail plaza and you attracted the Walmart or something. Yeah, very good. I call him the white whale. Yeah, you've got a lot of inventory to sell. We're talking five ad spots a day times five days a week. And one thing that's interesting, even at the 200 ,000 revenue level, already at or above this metric that traditionally heard of in email marketing of a dollar per subscriber per month, which for my world and sending once a week, like that's pretty high, but sending every day, like the wood pencil out. And if you get to 300 ,000 at 18, 19, 20 ,000 subscribers, you're well above that.

44:23And that's pretty impressive. And the question. I've actually never heard that stat. Oh, I think it comes from Russell Brunson from ClickFunnels. The question is like, at what point does it kind of max out? Like you're already at half the population. How much room to grow this thing is there? And even not to say that it has to grow indefinitely, but it's like, okay, can we get this thing to half a million a year and then go focus on our software project? Where do you want to take it? Yeah, I think audience is probably pretty close to maxed out. Like I said, I'm not spending on any Facebook ads at this point because I have to spend a lot to acquire a reader.

45:00But we are still getting new readers because people are telling their friends or we have SEO content or something like that. So we're not totally maxed out. Like we're still growing every single day. Even if it's by one or two email addresses, it's bigger every single day. And most of the time it's more than one or two, but it's probably more like seven to 10, which is not a lot, but we're not doing anything to acquire those seven to 10. So that makes me happy. We're not losing any. In terms of revenue, I think it probably maxes out. just newsletter at four to 500 ,000. And that's with everything completely sold out.

45:34So you're probably never going to get there. Probably 400 would be a really good target. 350 is an aggressive target for this year. 400 will definitely be the target for next year from newsletter. But then we can start selling Instagram stuff. We're selling a lot more Instagram reels now. And those are pretty good margin things. It's not really any work for me. If I do it right, set it up right. Who makes that? So the company makes those and you post them on the feed? Well, those are my favorite. Sometimes that does happen. The company's like, hey, we have a video. Can we post it on your feed?

46:02And I'm like, yeah, it's a good looking video. We can post that. What do you charge for those? I'll give them a little bit of a discount, especially if I've worked with them on other things or they're going to buy a couple of them. We have a running race company that bought a couple of those, but just had their own video. I think we charge them like$500 to post each one because they did two. Usually it would be$800, but that also relies on maybe us making a little bit of it. Now at this point, my standard price for that is$1 ,500. If somebody called and said, I have our own video, we've worked with you before, probably go down to$1 ,000 at this point.

46:37But if somebody is going to come in and do, we're going to produce something, I have to go and film it or I have to pay someone to go and film it. We have to pay a couple of people to go film it because in some cases, when it's coming up, I need a video and I need a drone. So maybe that won't be over 2 ,000. But based on who it is and their average customer value, they should make their money back pretty easily. It's all about the value that you're creating. What role did Instagram play in the growth of the business? It's hard to say how many people have come to the website and converted from Instagram.

47:08But in terms of the growth of the business, it's been fantastic because it's the public validator. Nobody can see how many newsletter subscribers we have every day except me and the team. And then if anybody gets the media kit, they can see it. But anybody can go see the Instagram. They can see how many people follow it. They can see how many people are actually liking the post and commenting on the post, which is a good number. It's just a great reputation thing. It hasn't been a lot of advertising dollars that people are spending on there. It hasn't been a ton of newsletter subscribers that we're getting.

47:39But it's a really, really good wow value. It's funny. My newsletter is smaller. It's$18 ,400 compared to$22 ,000. but if you know anything about newsletter versus instagram you know that's much more powerful totally and newsletter last year generated i think like 170 in revenue and the instagram was like three so everybody introduces me though as they're like oh this is ryan he's got this really big instagram and i'm just laughing on the inside because it looks really big and it is big it's a big instagram especially for our town yeah yeah for the local market but i should be introduced as the guy with the local newsletter if they were turning about actual power, like what you could do with it.

48:18We're doing a blood drive next week for our local hospital. And I put it in there today, 6am. I went to check around, I think 11, how many spots were left. There was one spot left. And so we filled up 35 spots in three hours or four hours, five hours with just the newsletter. I didn't even have time to put it on Instagram yet. So I do think it's always funny when people introduce me as the guy with the big Instagram because yeah, that's what they could see. Actually, the newsletter is the pretty good thing here. But yeah, it's not the thing that you can go on and see. You can go be impressed by 22 ,000 followers.

48:53You have no idea how many other people are getting this newsletter that you get every day. Yeah. Well, this has been fascinating stuff. You got me thinking about like, oh, could I do this for Sammamish? Should I do this for Sammamish? I know Nathan Berry was starting up something for Boise. So I was like, well, maybe there's something here. You make a compelling case for the local newsletter business. You can check it out naptownscoop.com. You can find Ryan at lifeof underscore scoop on Twitter. It's a good place to follow along and see what's going on in the local newsletter business. Let's wrap this thing up with your number one tip for Side Hustle Nation.

49:25Read the book, How to Get Rich by Felix Dennis. It is at the very least entertaining and at best it could possibly change your life. It's just absolutely incredible. Have you read it, Nick? I have heard of it, but have not read it. like I said, even if it's just for entertainment, read it. Because the guy's a beautiful writer, and he's hilarious, and he's very interesting. So he tells this great story about his life. But if you're interested in your own business in any way, it's probably gonna be your favorite book. It's so amazing. So that's my tip to anybody. Read it. Read it again. Buy it if you audible it, which I do recommend.

50:02The guy who reads it has a beautiful accent. But buy it, physical copy, like honestly, it's an instruction manual too. There's some really amazing things in there. All right. How to get rich by Felix Dennis. We'll link that up for you. A couple of takeaways before we wrap up. One thing that really stood out was this idea that momentum breeds momentum. Like the more people subscribe to it, the more of a thing it becomes, becomes kind of this self perpetuating cycle. The more advertisers you book, the more people see that people are booking ads and like it's really starts to get that flywheel spinning.

50:31And the other thing, if you're going to do this for your hometown, you're going to have to live it and breathe it. You have to really be the curator of that information, but good things can really happen as a result. So again, Ryan, appreciate you stopping by and sharing your insight. Big thanks to our sponsors for helping make this content free for everyone. You can hit up side hustle nation.com slash deals for all the latest offers from our sponsors in one place. Thanks for supporting the advertisers that support the show. That's it for me. Thank you so much for tuning in. If you're finding value in the show, the greatest compliment is to share it with a friend.

51:05So fire off that text message. Hey, we should totally start this for our town. Until next time, let's go out there and make something happen. And I'll catch you in the next edition of the Side Hustle Show. Hustle on.