Case Study: Building a Blog That Generates $500,000 Yearly
January 13, 2013 3 Comments
Have you ever wondered how bloggers generate income?
Previously, we looked at Tim Ferriss and methods he used to build a high traffic blog, and today we’ll examine a blogger named John Chow, who claims to generate on the order of $500,000 per year with his blog.
John has an interesting story: read more about John here, and take a look at his smiling face on the right of this page.
He seems like a regular, down-to-earth guy, who has put in hard work to intelligently build his blogging business. While some of his stuff seems a little salesy, his methods are worth a look.
At the bottom of this post is a video [56 minutes] where he describes the techniques I’m about to summarize.
Most often, people think that selling advertising on a blog is the only way to make money. John’s model certainly incorporates advertising, but he claims that only 1/3 of his revenue comes from the model where you get paid based on the number of pageviews.
The majority of his revenue comes from what’s called the “back end”: a well-planned system for generating income behind the scenes, even while he sleeps.
Here’s how John does it.
The $500,000 Blogging Model
According to John, here are the steps to monetize a blog:
1. Build a blog around a topic you’re passionate about, and find products/services related to your topic. Your blog’s goal will be to draw readers in by providing them great content built around a specific topic. As you find your topic, he suggests identifying products or services that compliment the topic of your blog, and become an affiliate for those products/services.
If you’re unfamiliar with this term, think of it as becoming a commission-only sales rep for the products/services these companies sell. Most companies offer an easy way for you to become an affiliate, which means that if anyone buys one of these products after having clicked on your blog, you’ll get paid. This idea is what forms the heart of the “back end” system.
2. Refine your blog with the goal of capturing a reader’s email address. John’s goal is to capture an email address, as that’s what he uses to dialogue with his readers on an ongoing basis. He claims to have 25,000 email subscribers, and acquires them at a pace of around 100 per day.
As with all marketing, one of the best ways to get what you want is to provide an offer. John suggests giving something away, like a free e-book. It may take you some time to create an e-book or find something to give away, but it certainly impacts conversion rates.
3. Once you have the email address, build a relationship with the person. While carefully following the CAN-SPAM laws, John suggests creating a series of emails that are sent daily or weekly. John describes his schedule for sending emails (one per week), with the goal of each email being to build trust and establish you as an authority in your niche. Your goal at this step is to become a trusted resource.
4. Put the contact through a series of drip emails (also known as a sales funnel). Through the sales funnel, you’re suggesting products and services related to the topic of your blog. This is what we covered in Step 1 (above). Suggesting products to readers (as an affiliate) is what forms the basis for two-thirds of John’s revenue. In the video, John describes how he does this for the topic of his blog.
5. Figure out your cost per lead (or sale), and find other ways to pay for traffic that generates a positive return on investment. Once you’ve established some traffic and corresponding sales, you’ll have an idea of what it costs to generate activity. Once you know this number, you can find other ways of driving traffic, and provided that these avenues are at (or ideally, below) your cost per lead or sale, you’ll generate a positive ROI.
That’s the basis for the $500k blogging model. Each of these steps requires some tools, services, and know-how, but they’re certainly all within reach of anyone willing to put in the time.
Can You Do It?
I do not believe in get-rich quick schemes. I am of the belief that it takes hard work and tenacity to make sh*t happen.
However, I also believe that the things most people feel are too difficult (or in some cases impossible), present an opportunity for someone willing to put in the time and effort.
I suggest the same is true for making money with a blog; it’s really just like any other business.
If you have some time [56 minutes], it is worth watching John’s video. There are more lessons to be learned.
What do you think? Do the principles make sense? If you disagree, why? If you’ve ever thought about making money with your blog, what’s holding you back?
You might also like:
- How to Build a High Traffic Blog Without Going Crazy: Secrets From Tim Ferriss
- ROI of a New Blog With Frequent Content