But before the rubber really hits the road, there are a few decisions you need to make: you’ll need a topic, a name, and a promotion plan.
Oh yeah, and there’s the tricky little detail of how much to charge.
Like most digital products, there’s no set standard for how much to charge for a premium newsletter. Offer your content for too little, and you could leave money on the table. Set the paid newsletter price too high, and you might scare off your most valuable fans.
As intimidating as pricing may seem, it’s nothing to be afraid of. You can look at what others are doing for inspiration and then try for yourself. The more we talk about pricing openly and honestly and release the need to get it right the first time, the easier it is to move onward and upward.
Check out how much other paid newsletter creators are charging
Looking at benchmarks for paid newsletter pricing helps you make sure you’re heading in the right direction.
Have a monthly price in mind for your newsletter? Check out what other writers charge.
No clue what to charge for your newsletter? Check out what other writers charge.
To help you figure out how much your paid newsletter should cost, we rounded up a few 2021 benchmarks. These numbers come from our research and experience at ConvertKit, plus data from more than 20,000 paid newsletters thanks to Newsletter Spy.
Average paid newsletter price
For high-value newsletters targeting business audiences (who often expense their purchase on a company credit card), higher numbers can work, too, like Petition’s $49 a month rate.
If you’re going to offer an annual subscription, it’s common to throw in a month or two free. The average yearly price of a paid newsletter is $100, roughly the equivalent of 10 months times the average monthly cost. You can see this idea play out on indify’s Daily Flag sign-up page, where the monthly price is $50, and the annual is $500.
Another important number in your newsletter business is your free-to-paid conversion rate. A 5% conversion from free to paid newsletter subscribers is a great place to start, while some creators get closer to the 10% mark.
A 5% conversion rate means that if you want to reach 500 paying subscribers, you’ll likely need an email list of 10,000. While there’s no benchmark that signals your list is finally “big enough” to open up a paid option, you can use the 5% sample conversion rate as a benchmark for your email list. That means if you’re sitting at 100 free subscribers, you may only be able to convert five people right now.
A small list can still hold bid potential. If you don’t have enough subscribers right now to sustain a paid newsletter there are other ways to monetize, like with a small ebook or online workshop. Or, you can forge ahead with a plan to grow your paid newsletter audience over time. Just make sure to choose a topic you’re interested in, since it could take some time before you really start seeing growth.
Churn is a natural part of a recurring revenue model and a good metric to keep an eye on. Subscribers might cancel their subscription if they’re cutting back on their expenses or have outgrown your content. While a really high (or growing) level of churn could signal issues with your content or chosen audience, it’s okay to lose some subscribers.
Losing around 4% of subscribers each month is typical. A list of 500 paying subscribers with a 4% churn rate would lose 20 subscribers a month. While you shouldn’t fret that some people unsubscribe, you should work to keep your conversion rate higher than your churn rate so that you grow in the long term.
Tailor your pricing to your audience and goals
As a creator, you can experiment in your business and tailor everything to your audience. Below are some factors that might move your ideal price up or down.
Just remember that you have ultimate say in your pricing, so take examples as inspiration rather than rigid rules.
Running a paid newsletter takes work, and the payoff has to be worthwhile for you. How much do you want to make from it a month? Starting with your end goal in mind and working backward can help make sure you don’t set yourself up for burnout.
A simple way to do this is by dividing your monthly target by how many paying subscribers you think you can convert, at least in the foreseeable future.
Let’s say you have 5,000 free newsletter subscribers already, and you’re looking to add a paid option for your biggest fans. If you want to make $2,000 a month, you could aim to convert 250 people to your paid newsletter, which is in line with the average 5% conversion rate. To hit $2,000 a month with 250 people, you’d need to charge $8 a month. Try running the numbers on different monthly prices or number of subscribers to see which route feels more achievable for your goals.
Generally, the greater the impact your topic has on a person’s life the more you can charge. For example, career, business, and finance topics tend to cost more than personal essays or recipes.
Remember: this doesn’t mean some topics are more important than others. It’s easier for readers to justify spending money on your newsletter when their investment will lead to more money. Plus, subscribers might be able to expense business newsletters for their job.
Think of your paid newsletter as an investment—what are readers getting in return?
If you send content more frequently, you might have an easier time charging more. That’s why you’ll sometimes see daily paid newsletters with higher pricing than monthly or weekly content. You need to strike a balance between quantity and quality that works for both you and your audience, though.
Think about how often your audience is likely to use your content, and what frequency you can maintain. If you aren’t sure, consider how often you publish new content now. If once a week is what you can manage, start there for your paid newsletter. If you think that splitting your content up into smaller portions makes it easier to digest, then daily sending could make sense.
Ideal list size
Before you set pricing, you need to decide what kind of paid newsletter experience you want to have.
Is this going to be a small and engaged community with more hands-on interaction and user-generated content? You might want to charge more, like Isabelle Roughol does with her community, Borderline. Higher pricing = fewer readers = more personal connections.
Or are you looking for scale with a large list of slightly more impersonal connections? Consider following The Dispatch’s approach to pricing and charging a smaller monthly fee. Lower pricing = more readers = more reach and upkeep.
If you have additional resources or plan on creating them, you can use your work as leverage to turn your newsletter into a community. A premium experience with bonus content or access can drive loyalty and retention and is worth a higher monthly price.
Plus, it’s a way to use each product to grow the other. You can refer course students to your newsletter and sell your newsletter subscribers to your courses. Just make sure you aren’t trying to cram everything you offer into each newsletter—a readable and usable design is essential.
Choose the best paid newsletter platform for your needs
Once you’ve looked at what other paid newsletter creators are charging and tailored your offering to your audience, you’re almost ready to launch. The final piece of your pricing puzzle is the cost of your paid newsletter platform of choice.
When you compare your options, be sure to run the numbers based on your target number of subscribers and paid newsletter price, since there are usually transaction fees. You should also include any other marketing tools you use as part of your monthly expense total.
Here’s how pricing works across three paid newsletter platforms:
- ConvertKit: Account is free up to 1,000 subscribers, and then starts at $29/mo after that. Transactions are 3.5% + $0.30 each.
- Substack: There’s no monthly fee, but there is a 10% platform fee and 2.9% + $0.30 per transaction.
- Ghost: An account for 1,000 members is $36 a month, plus 2.9% + $0.30 per transaction
It’s hard to grasp what these numbers look like in action, so let’s run through a scenario. We’re going to assume our example creator has just under 1,000 total email subscribers, which they’ve turned into 50 paid subscribers at $10 a month.
Start building your audience with ConvertKit Commerce
Having your email marketing and paid newsletter tools in one platform just makes sense. Creators that already use ConvertKit to grow their free newsletter can start monetizing their work in minutes by turning on a paid newsletter option. Plus, both veteran and new paid newsletter creators also benefit from lower transaction fees.
Setting up a paid newsletter with ConvertKit is easy and now has more billing options. Creators can offer monthly, quarterly, and annual billing for their paid newsletter.
If you’re ready to grow your paid newsletter (and keep more of what you earn), start a free ConvertKit Commerce account today.
The post Paid newsletter pricing 101: How to make the most from your content appeared first on ConvertKit.