I was thinking here:
"Why on earth should i keep all this info out from my fellow Christian Brothers, especially when considered this is only a percent from all that i know"
So here comes some real valuable info for some of you.
While the actual thing is about how to costa value of something, you can actually get some great info and ideas on how to change something into money flow.
How do i plan to change free service into money maker without being dependant on advertisers will to advertise on my site? (which would mean i would first need to advertise to advertisers)
Its quite simple actually.
By definition every new user brings actually at least two users.
The kid who actually uses the email, and parents, who keep prewatching the emails before they are shown at kids email.
This means, there can be two log in systems. One for Kids, and one for parents.
To make it nice for kids to use, i just make it as nice as possible for kids. No ads or anything. (besides, kids dont have money anyway, they need to beg parents to buy everything for them)
However, parents log ins can accpet ads.
But in this we get to two questions. From where the ads? (do i need to find advertisers and advertise for them to advertise)
And if i can find advertisers, how can i keep their ads valuable enough that they keep advertising?
These are questions of traditional banner ad websites. There is clear problem. I can tel lsome say phone company that i have 1 million users. Okay, so they take an ad and advertise their newest phone. Great. Was it really worth them anything? 1 million untargeted ads. Not thta good. And no reason why theyy would continue advertising at me. Ads need to be targeted.
This phone ad also creates another problem. Many parents see an ad they are not interested even to the slightest, they do undertsand it is necessary evil, but it anyway affects their opinion about this service slightly downwards, especially if whole place is full of ads, since basically only way to get more cashflow, is to get more ads, more users or rise the price of advertisin space.
So not only is this in many other ways not very good solution, its only somewhat limited. That there is some maximum capasity to money flow you can get this way.
SINCE I WANT TO BOTH SKIP ADVERTISING TO ADVERTISERS AS WELL AS WANT THOSE ADS TO ACTUALLY BRING SOME VALUE TO CUSTOMER(parents).
I have different approach.
First im going to show you one place: (theres more of these, this just good example)
This place has 10 000s of products, that anyone can start promoting right away and get percents of the sales.
This means; I just skipped the Adcertise to advertisers part, since i only need to choose which one i want to advertise.
This also creates another good thing.
For i can search for certain kind of products.
Now what are those who put their kids to use service like this?
They are parents, who are most likely interested in putting time, money and effort in raising their kids.
And thats where i plan to hit.
It took me about 5 minutes in total to find these three for example: (and that includes opening website, logging in, copy pasting them here and stuff)
24 Hour Science Projects:
My Out-Of-Control Teen:
Knowledge Quest, Inc. And Homeschooling ABCs:
Now would these products both be interesting to parents using email4kids, as well as bring more value to them to email4kids?
For these would be very targeted ones. And for example that Out-Of-Control Teen, i could choose it would be shown to only parents who have odler than 13 year old kid, or to parents who have at least 2 kids of above 13.
These ads can eitehhr be shown in site or by sending emails to parents (which they could be even given a choisse of, NO i dont want to receive advertising emails, since propably half of them would let them come anyway)
So for the calculations:
Id say that by hat, one customers value will be 0.15 USD a year. (and this is very likely a lot downwards)
To what do i base this on?
By making claculations based upon some knowledge i have about marekting and raounding everything down a lot.
Okay. so i take these three products:
prices i get from each sale
Knowledge Quest, Inc. And Homeschooling ABCs -$26.89
My Out-Of-Control Teen - $10.60
24 Hour science project - $7.82
so for easier calculations i say that average price is about 15 USD.
Meaning that evert ale is basically on acerage worth 15 USD to me.
So basicng upon clicktrhu and conversion rates, i say that i will get 1 sale each year for every 100 customers (that is actually very much smaller than actual clickthru, conversion rates say)
basically clickthru for ads is around 1 click for 1 000 ads, depending on where you advertise (for example if i use adsense, i aim at at least 1 click in 10 shown, but 1/100 is something to start from for someone wihtout any knowledge about adsense ads)
And this is somewhat more targeted forum, so with targeted ads, it should be higher actually.
Also, same ad will be dispalyed many times to same people, so it might even be close to 100 percent of parents seeing the same ad. But i suppose that about one in 10 would actually click on ad and check it at some point in his usage if email4kids.
Conversion rates from sales letters depends on products and how targeted the original traffic was. But its usually at lowest from 1/100 buy the product to upwards. And that 1/100 is basically untargeted traffic.
Now in this case taffic is very targeted, and they are also reminded about same ad by seeing it again and again possibly (in case of banner ad style ad), which means that if they left thinking that they might buy it later, they dont get to fogrget it.
So upon this i base that we could say 1/10 would buy from those who read it (targeted traffic and reminded about product).
By this i get to 1 out of 10 click ad, 1 out of 10 buy it. which is 1 out of 100 buy a product.
And supposing there is only 1 poroduct to buy average priced 15 USD (and theres actually many many more products that some wont buy at all, while some will buy many more, so this is definately downwards)
It will make calculation wise, that every user is worth 0.15 USD a year.
So 10 000 users (which isnt even big numbet yet, since succesdul thing like this would prolly have million users), would already be worth 1 500 USD yearly.
If we want to take more positive (and prolly more realistic) we can start looking at basis of that 0.15 USD per pormoted product.
now most likely parents will log in more than once a week. So we can say that they log in to account at least 4 times a month (once a week), maybe even 10 times a month, that means possibility to display an ad each time.
So on average i woudl say they look 7 times a month per user.
That means 12 x 7 = 84 times a year.
Since ads are targeted, they most likely will click more than on one ad. (for how many times have you clicked during this year to untargeted ads = several, then how about targeted ads = even more comapred to amount seen them)
So lets say they click on every 10 ads shown, that means they will be clicking 8.4 times a year, but we say 8 to get nice round number.
So if there are 10 000 users, there will be 80 000 clicks.
Supposing 1 out of 100 leas to sale (Might be closer to 10 percent conversion actually), thats 800 sales worth 15 USD each, meaning nice 14 000 USD income.
Which would make each customer (parent) worth 1.4 USD a year.
And not to mention, that you have nice targeted group there for any other targeted project of your for them to join, and also to note that some of the products in Clickbank might be worth even 200 USD and some are also continuous like some education thing to kid might be 50 USD a month and you are supposed to stay on that until kids education is finished.
So just one sale like that could bring you already around 5 000 USD in next 10 years time.
So basically i would believe each user is worth more than 10 USD a year, not to mention that their word of mouth will also bring more users worth 10 USD a year.
So here was some business advice to you, both from basic marketing system to making calculations.
This was only a scratch on the surface, but i believe it was already valuable to some of you guys.