My creation of a multi million dollar offer on accident (22)
First I ask that you do not post this anywhere publicly. If I wanted it public I would have put it on my blog. Its not rocket science behind what I am doing but this is the inner workings of how this happened which I would prefer not be public.
I have sold around 100,000 units of products in what would be called the bizop vertical. But out of curiosity one day I ran analytics and saw that only about 2% of the people that purchased every logged in more than 5 times. AND in some of them there is over 100 hours of content.
So I thought back to what motivated me to keep going and possibly get people to actually consume the content I was selling.
It was of course making money. Making my first dollar online was much more thrilling than making my first million. So if I could give those people the same experience maybe they would keep going.
This was right after I sold my email marketing agency for 12m. That mixed with selling my advertising network a long time ago and the money I have made with affiliate marketing I was ready to retire and just blog and have fun.
Then I had this idea. What if I didn't sell anything but instead paid the user if they actually did what I teach. YAY no merchant processing, dealing with refunds, etc etc.
But the best part is people would end up with something of real value. and they never directly paid me a dollar.
I had zero expectations of this actually working though... Especially long term. I thought it would be fun to try. After all whats the real risk.
OHH I failed to mention my plan to actually make money with it. In order to build a website people would need webhosting. And in order to do email marketing people would need that. So my plan was to back it out with affiliate offers.
So I put on my coding hat (my php is cutting edge from 10 years ago) and built it. I coded it all out by hand (no framework) in about a week (i am obsessive when I want to do something).
Share a link on facebook and I send you $1 in real time through paypal. At first these were random news articles but now it actual shares the site (derp me) btw I don't actually check to see if they do it.
So the average time it takes someone from making a free account to putting $1 in their hands is about 6 minutes if they watch the pre videos in full.
As they keep going I pay them $1 to do the tasks. (install wordpress, install a plugin, install a theme, make a post, setup your email, make a facebook page. Again I don't actually verify they do this.
At the end when they tie everything together I show them how to do a product review on Amazon and boost their post on Facebook for $5. Then if they do it and send us a screenshot we reimburse them $5.
For a viral component I added in that if you refer someone and they make $1 then you also get paid (the percentage goes up as you level so it incentivizes people to go through it).
So I launch it about 1 year ago from the time of writing this. At first it was only 3 levels.
White belt - make a dollar
Yellow belt - make your site (webhosting affiliate)
Orange belt - create your Aweber account (affiliate).
Then it said content coming soon....
After all I didn't want to put in all the work of creating more content if it wasn't going to work.
BTW I launched it with Bluehost at a street level payout ($90). After the first day they called me and offered me more. I explained to them what I was doing and NOT to raise my payout until we see how it goes with refunds and what not. Again I dunno if this is going to work. They were excited even though they explicitly do not allow incent. BTW I don't pay people to sign up for any of the services only after (my lawyer suggested that).
Ok so I launch it by mailing it to my own list. To my surprise I got over 150 web hosting signups and over 100 Aweber signups. Wow but its my list... of course its going to do well.
Then I had John Chow mail it. It did very well also.... actually it did better.
I had mixed feelings about this.
On one hand these people know who I am so it made sense. On the other hand I already have in the past pitched them web hosting multiple times and John Chow promotes hostgator constantly.
The snowball was rolling with users referring users. Some users were sending clicks 50-75k PER DAY. For the next 2 weeks I was furiously making the rest of the content. During the time I noticed the same people kept referring tons of people and I was doing very well.
After I got the content pretty situated I started looking at referral urls from where these people were sending traffic. It was what is called PTC traffic (paid to click). For those that do not know what that is - basically a user gets paid to click on an ad, goto the page, and move their mouse around for five seconds and they get paid like a penny per or something small like that.
Most of these users sending users were on the initial level... meaning they only get 25% of what people make that they send. So basically a quarter everytime somebody they send makes $1. So if its working for them for a quarter then wtf.
So I created an account on Clixsense and bout like $200 worth of traffic. It took a day but I got 4 webhosting signups and 2 aweber. Interesting.
I made accounts at all the major PTC sites - Clixsense, neobux, and traffic monsoon. Clixsense always performed the best but over time I got a ridiculous ROI. I will explain the "over time" aspect later.
WTF why did that work? Well I guess it makes sense. These people are clicking all day for penny's. They can make a dollar in 5 minutes on my site.
The only drawback on these PTC sites is it doesn't scale well. I can only spend about 10k a month on all of them COMBINED. But on average I get a 3x return over time. What really blows me away is that its the lowest webhosting refund rate.
Then some bad shit happened. I had made the site wide open... all countries no filtering, no proxy checking. After all I just wanted to see if it worked.
I also raised one million dollars for this company. Most of which came from myself. Why did I raise the money myself? In Nebraska we have this thing called the Angel Tax Credit where you get a 40% refund if you invest in an approved company. So ya... that is nice. But I put a lot of people to work so I did what it is int
Well that sucked. I had one guy take me for 6k in about an hour from Romania. Fortunately for me I have great contacts at Paypal and to my surprise they reimbursed me the money.
Ok its now time to involve my team (they were working with the buyers of my email marketing platform transitioning it).
Over the course of this fraud has always been an issue. Its VERY minimal now but in addition to making users open authenticate we also developed an algorithm to stop it. Its far from perfect but its acceptable.
I then went to other traffic sources like soloads. I did well with these but there is only so much volume they have...
Now before I mentioned "over time". This complicates things. Everytime I have had an offer in the past it was a straight sale. So easy to calculate ROI.
With this offer about 50% of people that signup for webhosting happen in the first 24 hours. 20% in the next 7 days, and the rest over a huge amount of time. I routinely see ones over 6 months and SOME OVER 11 MONTHS!
So I ran a lot of data and came up with a basic figure of at which time a user was worth what. I had it nailed down to a SOI, DOI, and a first level complete.
I put the offer in affiliate networks. This was a nightmare. While there were a couple in each network that were doing well.... Overall it was a loss. Mostly because for every affiliate that was doing well they had like literally hundreds of affiliates that had 10 clicks and 10 conversions (obvious fraud) but the networks do not police this. On the first level complete I paid out like $20 CPA to networks. This was dumb. 1) it wasnt going to track right cause the user can come back on a different device and 2) the fraud was so big. Might not seem like a big deal but if you got 100 affiliates with 1 click 1 conversion thats 2k a day.
And I didn't have time to police it either.
So goodbye affiliate networks. I worked directly with affiliates that I personally know paying on a double opt in. This has worked well.
I also have done incent. This has been a mixed bag. Some worked very well but didn't have the volume. Some had incredible volume but didn't back out.... even paying 1/10th of other incent affiliates.
By late last year we were pumping over 2,000 web hosting leads a month... which, to my knowledge, makes us the biggest web hosting affiliate in the world. By a large margin.
After split testing a dozen web hosting companies affiliate programs we settled on one which pays us a ridiculous CPA and payout terms because of our volume.
As it is right now I have done over 15,000 net web hosting signups and many Aweber and we have over 400,000 double opted in users from US,CA,UK,AUS,NZ (we block all other countries).
In 2016 we should do over 5m in top line revenue between webhosting CPA's and compounding Aweber monthly commissions.
Obviously thats not profit and to be fully transparent, I am about even on this as of now. Mostly because I hired a shitton of people and am always spending money testing new traffic sources.
Another thing that is comical is I never email these people another offer.... I did try one webinar once and did like 50k (on my side) but nothing other than that.
So thats my case study. I have no doubt once I actual focus on monetizing the userbase it will do well.
Its been a lot of fun 
BTW if you want to duplicate this model go for it. I am sure there are many things that you can do with it.
Also if you can push over 25-50 webhosting signups a month and want a referral to the company we are using pm me. Unlike other people or claims I can guarantee its the best converting and payout (trust me this is my main form of monetization).
So now I am looking for more affiliates. See sig.
Really interesting case study Mr Shoemoney!
I've heard of those PTC sites before, I would of never of thought they would of lead to any conversions.
Did you have a lot of issues using Paypal as your payment processor for this bizopp?
That is quite an amazing story. You are a real inspiration in the IM community and I hope to meet you in person some day.
Nice write up, Shoemoney!
I've heard that web hosting affiliate signups are the bread-and-butter of bloggers showing people how to make money blogging (just google "foodies making money blogging").
So it was interesting to see that you can actually make a solid business just based off hosting referrals. Good stuff 
Originally Posted by Mr Green
We have a very good relationship with Paypal being we send out thousands a day in $1 transactions they reimburse us for the fraud for all of them because its well worth it for them to eliminate the riff raff.
Also it probably doesn't hurt Paypal HQ is about 40 miles north of me in Omaha, Nebraska.
Originally Posted by xxf8xx
Amazing write-up. I've secretly followed your career since I'm a long time lurker of your blog ;-), you're a creative guy!
Have you considered focussing on other countries where English is the 2nd language with your own mediabuying? I can imagine this will work very well in countries like the Netherlands, Sweden, Denmark, ... as well. Cheaper traffic and less saturated with biz op.
Originally Posted by scitox
Probably once I get the monetization funnels down I will persue that.
Pretty cool man - you have impressed me over the years with all the ways you have made money.
I really identified with your one post on how you built up the PAR Program, but you spent most of your time running the office, dealing with people requesting vacation, etc. I've been in that boat in the past. I do better finding ways to make money on my own, and if I need help, hiring people online who I don't have to deal with in person.
Originally Posted by lanikai87
Originally Posted by Shoemoney
Roger Sterling - Mad Men
So I am getting a lot of PM's about the payout. In general for non-incent 50/50 DT to Mobile ratio we pay $3 per double opt in for the first 1k leads and go from there depending on quality. We will know pretty quickly if the quality is in line with where it should be.
I do weekly payouts (every Monday for the previous week via wire or Paypal).
I am ShoeMoney so you know I am good for it =P. My reputation isn't worth fucking anyone over.
Awesome write-up. I remember when you posted this offer on your blog. I didn't get how you were going to make money from it but now it all makes sense.
Originally Posted by shakedown
Your case studies always blow me away. Always out of the box and fun.
Thanks for the share man.
Originally Posted by Shoemoney
Europe in summer = win win.
AWC = win.
Attendees quality = win.
That's 5 x win, you just can't get that anywhere else. See you in July!
Originally Posted by Mr Green
Europe in summer = win win.
AWC = win.
Attendees quality = win.
That's 5 x win, you just can't get that anywhere else. See you in July!
Great read.
Surely there are other things you can nudge these amateur webmasters to - domain registration, copy writing books / courses to improve their skills, etc.
SHOE MONEY!!! Love how you are leveraging your fame to get Google, Facebook, etc to 'sponsor' this program.
It's awesome, way better than Starup Alley that Jason Akatiff made. Money motivates; and here you are paying people to learn how to make money, which also makes it go viral as they tell their friends - awesomeness!
Sent you a PM on FB, interested in promoting your fun way to learn affiliate marketing to my readers.
-Attila
Next step, start your own hosting company? Actually no, I hear it's a nightmare. Didn't Jonathan Volk run a hosting company? Next step - contact some hosts and arrange a white labeled version of their hosting - they manage support, you manage billing. It's all very good getting that initial commission but you should be focusing on long term user ROI, especially considering you are giving them so much value in comparison to other bizops out there.
Also - That Nebraska tax credit is insane! Any other programmes people have heard of doing crazy things like this for innovation?
Hahaha, Brilliant !! And not british like this spoon is brilliant, actually brilliant
Mehdi
that's how you do business!Great read
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