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Nov 07, 2002
Case Study

Selling eBooks & Subscriptions to Consumers Online: Hard Lessons from a Get-Rich-Quick Publisher

SUMMARY: It is easy for we "serious" marketers to sneer a bit at the guys selling "how to get r*ich on the Internet" stuff. Don't you ever secretly wonder if there's something you could learn from them? No matter how traditional and snooty your company is?

During the course of our research to create this Case Study, we learned five lessons that have already helped us out tremendously. Now it is your turn. Yes, this includes some (very) useful metrics.

After leading a Florida-based training company from $1 million to $8 million in three years as CEO (during which time the company was in the Inc 500 two years in a row), Shawn Casey decided to go out on his own.

"In early 1999 I quit my job," he explains. "I decided there were way too many opportunities to make money on the Internet." First he researched like crazy, trying to find out everything there was to know about online marketing.

He learned two things: The first being that making money online is a lot harder than it seems from the outside. The second was despite the plethora of sources claiming to tell you how to do it, none at the time were both permission-based and turnkey.

He started his own sweeps site and after figuring out for himself what worked, wrote and self-published an ebook on the subject called 'Mining Gold on the Internet.'

He did not sell many copies because it was not his main focus at the time. "I promptly did not a lot with it."

Then in late 2000, a marketing partner started selling copies like crazy. "It got my attention to focus on it. I thought if they can do this, I can do more of it myself." At the start of 2001 Casey was off and running, trying to make a profitable ongoing business out of his ebook.

He had one big rule however, although many email spammers promote products on the same topic, Casey would never join their ranks. He was going to be strictly permission-based.


If something is working well, then do more of it. The first thing Casey did was focus on getting more people to promote his ebook for him. These were in two categories:

1. Loads of affiliates

Casey was not naive about the potential of affiliate programs. The fact is the vast majority of affiliates are going to sell diddlysquat for you.

He explains, "It's so easy to sign up for affiliate programs, there's no pain, no cost, no commitment. Forget the 80/20 rule - we have the 99/1 rule. One percent of your affiliates will do all the work and make you m^oney."

Beyond setting up an autoresponder program to train new affiliates, and giving them lots of materials to sell his ebook (including code so they could simply put up a site of their own without having to copywrite or design it), Casey focused on getting so many affiliates that one percent would at least be a slice of a pretty big number.

"If you can get a sheer volume of affiliates each doing a little, it equals a lot of sales."

His cleverest tactic was promoting the affiliate relationship as a 'free bonus: Lifetime reseller license' that all of his ebook buyers could take advantage of.

2. A handful of selected joint venture partners

Casey also created separate deals with some of the larger competitors and players in his field. In this case they would get a larger commission than a run-of-the-mill affiliate, because they had more power to bring to bear. Often the deal also included Casey promoting their products to his list (more below).

His advice on getting joint venture deals:
- Do not be afraid to approach even big famous sites. "Everybody with a Web site wants to make more money. This is what stops beginners. They assume the big guys are making all the money they want." If you can help a company increase their revenues enough to be worth the people-time to set up the deal, they usually want to talk to you.

- Do not rely on emailed pitches for big deals. "You have to take time and risk. My number one tactic is getting on a plane, in some cases to the middle of nowhere, because nobody else ever does. That's an old Tom Peters trick. You can't call them, you can't teleconference or fax. It's a long way there and no one's going and that's why you'll win if you go."

- Do not expect every joint venture to be a big winner. Just like affiliates, some will pull out all the stops and bring you a bunch of sales, while others will sit on the opportunity and not do much of anything. "Some have bigger lists than I do, and I can never get them off dead center."

In order to supplement affiliate and joint venture-driven sales, Casey also began testing renting outside email lists as prices on permission-based consumer lists fell to rock-bottom levels.

Casey notes there are a lot of lists out there claiming to be permission-based which are not. "We only buy from reputable mail providers." He also tests each new list carefully, sending a mailing using time-proven creative to a segment of about a million names (which for Casey is about a tenth of what he mails per week) before agreeing to buy the rest of it.

If sales are not up to snuff, or if there are an unusual number of spam complaints he does not roll out.

(Casey notes when you mail a lot of names, no matter how permission-based you are and the list is, inevitably some people think you'd s*pammed them, especially when the topic is making money. We have certainly heard this from many other reputable mailers as well.)

Casey has tweaked his Mining Gold Web site considerably to make sure he gets the highest conversion rate possible from click through to paying buyer, or failing that, from click to free opt-in. The site's tactics are notably different from emerchants who hope to encourage repeat visits at the same home page, because he is only selling one single product there and either you buy now or you do not.

Casey says, "My site is like an infomercial. You can't let them stop and say, 'I'll come back and order later' because they don't come back. How often have you written down an 800 number from an infomercial and then never called to order?"

He uses the classic direct sales technique of very long copy on the home page (it prints to about eight pages) with no place else to click to except the order page. "If you're interested, you'll read forever," he notes.

Unlike most traditional emerchant sites, Casey does not stop selling when you get to the order form. He noted from site traffic logs that about 20% of visitors were clicking to the order form, and he surmised that an online order form is a lot like a postal direct mail order form. A lot of people toss the letter and go straight to the form to see what the offer is.

If they are clicking without reading your letter, then you just lost your chance to present your sales pitch.

Casey's order form is itself a lengthy sales pitch which prints out to three pages. Visitors see the offer restated in bullet point format, plus a guarantee statement, plus a buyer testimonial, plus a link back to the longer letter on the home page, and finally a form to enter their order on.

Just in case he was wrong, Casey tested a much shorter order form as well, stripping out all the sales copy.

After filling out their personal info, buyers are presented with one final offer: A choice of deals. 'The Great Deal' is the ebook plus various bonus add-ons that they just read all about and expected to be buying for $39.97.

However, now they discover they can opt for 'The Best Deal' instead which for $59.97 includes the ebook, the bonus add-ons, and online access to a canned four-hour audio seminar that Casey held on tax advice for entrepreneurs.

The guarantee for both offers is 100% money back for 90 days. (Casey notes he would have preferred to offer a year which is more potent for sales, because most people who are going to cancel do so in a few days. However, most merchant account providers will not let you offer more than 90 days due to their risk concerns.)

The site also has a plethora of pop-ups. Why keep them in this anti-pop-up day and age when brands like AOL and iVillage are dumping many of theirs?

Casey says, "I could care less about being a brand. There's people that get annoyed and they're probably never coming back, but I don't care. My marketplace is a giant universe, there are always more people out there. It's not like I'm looking for the 1,000 IT guys who know how to do something and I've got to kiss their butts. We do treat our customers well, but until then our job is to try to make you become our customer."

"Anyway, it's not like you come to my site everyday and get whacked with these things."

The site's pop-ups include:

-> An entry pop-up with a 'special limited time offer' for a free seven-step emailed course. "You need a bribe." Casey explains why he gives something away to get that opt-in.

Casey puts this soft offer front and center to capture as many email addresses with permission as possible from visitors, whether or not they become buyers. If they opt-in, they see a quick thank-you and then are returned automatically to the sales pitch on the home page. ("Why waste attention stranding people on a 'Thank you for subscribing' page? That's silly," Casey says.)

-> No fewer than four exit pop-ups and pop-unders, one of which is an entire Web site's home page, appear to non-buyers as they try to leave. "There's no exit," Casey jokes. "We don't ever want you to leave."

Each restates his pitch with a different headline. One reads, "Are you crazy?" Another says, "Special free offer for skeptics only!"

Casey notes it would not be worth all of this effort to sell a single ebook. His business model extends beyond that: "The book is just the beginning. We have other places to take people. Your business is not to sell a single book. The purpose of your business is to acquire customers."

Casey gets permission to email these customers on an ongoing basis as part of the initial sale (Free bonus #4 is a '3-year subscription to 'Big Dog Marketing Insider's Report' which is Casey's newsletter).

He uses the weekly newsletter and various alerts mailings during each week to promote joint venture partners' products while wrapping enough useful information around the sale pitches to keep people opening them on a regular basis.

"You'll average three to four mailings per week from me," he notes, "We pound on our list."

Again this is a practice he espouses strictly because he is able to. His universe of potential buyers is so huge that he makes more money from the ceaseless effort than he loses to the annoyance factor. Casey is well aware that publishers in smaller niches can not possibly copy this tactic.

His newest upsales product is a $97.77 month subscription site called 'Cash Flow Circle' which he developed in partnership with Frank Kern. The launch took three stages:

Stage #1. Stockpiling enough unique content on a pre-built site that subscribers would feel they got more than their money's worth from the very first moment they entered. Much of the content is "hours of online training videos."

Stage #2. Sending a test subscription offer campaign in July 2002 to an outside list. Why not test with his house list? "As a test that would have been bogus because some of them will buy anything at any price from us. We didn't want to finish building it and launch to find out no one outside of our current group cared."

Stage #3. Launching in August 2002 with an announcement to his book-buyer list.

Casey says it is hard enough coming up with new topics for his weekly email newsletter for book buyers every week after three years, so he did not want to add to his content burden with the subscription site.

Instead, the site offers the chance to access archives, plus attend a live monthly two-hour training call during which subscribers can ask Casey and Kern questions. Famous-name experts such as Robert Allen, author of the new book 'The One Minute Millionaire,' sometimes attend these subscriber teleconferences as guest stars.


Casey's Company is profitable. He has sold 80,000 copies of the Mining Gold ebook to date, and sells "several thousand" more a month. One joint venture partner is responsible for at least 1,000 of those sales a month. The majority of the remainder come from the small percent of Casey's 35,000 affiliates who work at it.

Although Casey has not promoted The Cash Flow Circle subscription site heavily yet because he is waiting for some tech problems to be ironed out completely (aren't we all?) he has already signed up more than 1,000 month-to-month subscribers. (There is not an annual option.)

He adds that he also has a "healthy revenue stream" from other product sales to book buyers.

Some more metrics:

- Casey's found he can "generally break even" on campaigns to rented lists once he has weeded out the bad lists during tests. He pays CPM.

- Although most people order right away, he says, "it's not uncommon to get orders two-to-three months after the original stuff was sent out" because some recipients sit on their email and read it later. (Other publishers have seen this too, it is a good reason why you should never take down an old landing page, or retire a link completely.)

- Out of the seven emails the autoresponder sends visitors who responded to the first site pop-up offer, the one that gets the highest response rate is one that addresses the prospect by their first name. "Anne, I really need your help. I've been emailing you for a week and a half now and you haven't bought my book yet. Obviously I've done something wrong, I've fallen short, etc."

- Whenever Casey tweaks a landing page, home page, or pop-up, he sees the same results. Headline changes make a vastly huger difference than tweaking body copy. (Note: Every print copywriter is saying, "Duh", but many online folks do not realize this.)

- Sales plummeted by 25% on the day that Casey tested leaving the long sales copy off the order form. He whipped it back up again.

- A whopping 47% of buyers go for the higher priced $59.97 offer on the Mining Gold order form. It is worth noting buyers are not pitched the different offers until they get to that point, so they only have to make a single buying decision. Then once they have already agreed to buy, they get the option.

Casey has also learned some hard lessons he wants to share with other publishers:

Hard lesson #1.

You will get spam complaints, even if you are a perfectly pure permission-based marketer. (Note: We have found this to be absolutely true for publishers on all topics.)

Therefore set up damage control systems. Have a customer service team available as much as possible (Casey's are live seven days a week). Let affiliates know you will cancel them in a heartbeat if they spam, and then act on that threat relentlessly.

Hard lesson #2.

Your web site hosting firm may yank your account if they see spam complaints against you anywhere on the Web, no matter how unwarranted these complaints are. (Again, we know of other publishers in other niches that also have had this problem.)

You will need to educate your hosting firm about this, and you may end up, as Casey has, taking hosting in-house.

Hard lesson #3.

Merchant account providers are risk-averse. They will accept almost any new online merchant with low sales, but once you bump a particular limit in monthly sales, you can find your account stopped abruptly with no prior warning.

Every account has a cap, even if they do not tell you about it. That cap generally falls somewhere between $50,000-$90,000 per month. Proving that you deserve a higher cap can take weeks, detailed accounting records, and a gargantuan security deposit (for example, six months of income).

Casey advises all online merchants to line up a second merchant account as a fall-back position just in case the first one is stopped for any reason.

Hard Lesson #4.

Merchant account providers are risk averse Part II. They like to see steady income on your account, not bumps. If you have got extremely responsive list and you roll out a brand new product which results in an unusual leap in sales, some merchant account providers will shut you down that minute.

Why? Casey explains, "They think, 'Oh my god, you must have committed fraud!" He advises you to warn your provider if you have any unusual campaigns coming up. Again, line up that secondary back-up provider account just in case.

Hard Lesson #5.

Filters are taking a chunk out of delivered email, especially when you use the types of words that Casey must to describe and sell his product.

For now his response rates are high enough that it makes up for undelivered mail. He figures better to get some orders from exciting copy that reached some of his list than no orders from boring copy that got to all of his list.

He is concerned about the ongoing trend for ISPs to filter based on content rather than on proven permission.

It is a lot harder to get rich in the how-to-get-rich-quick business than you might have thought!

Casey's affiliate program provider is Synergyx. His autoresponder service provider is
See Also:

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