We have discussed topics such as niche selection, newsletter business models, and even a bit about how your newsletter business model and niche intersect.
But now that we have covered our deep dive on Paid Offer Rankings Based On Freedom & Price Scale; I want to take another look at how your niche affects your newsletter's monetization strategy (and what you can sell).
That said, if you want to read through some of the other resources we have covered on the topic, you can also start here:
- The Ultimate Guide To Newsletter Business Models
- Should You Niche Down Or Niche Broad? (What Top Creators Do)
And just to recap some of the offers we discussed in our paid offer ranking deep dive:
- Cohorts
- Courses
- Coaching
- Community
- Other Digital Products
But those aren't the only things we'll be covering...
There's a whole different monetization strategy that we'll discuss in order to make this one more clear.
We did a deep dive on How To Add Sponsorships To Your Newsletter a few weeks ago, and this is going to be another main strategy for certain newsletter business models.
So before we begin, let's recap what we know about Newsletter Business Models...
The Newsletter Business Models
In order to make sense of the newsletters we will be taking a closer look at, we first need to make sure we fully understand our Newsletter Business Models.
Here's a quick recap to bring you up to speed:
Creator Newsletters
- How They Make Money: Primarily by selling products and services, generally diversifying with sponsorship revenue coming in between 10-25%, and then affiliates usually less.
- What This Means: This means that a sending frequency of 1X per week allows them to focus on providing tremendous value pertaining to a specific niche and then when it comes time to launch a product they are the obvious choice.
Media Brand Newsletters
- How They Make Money: Primarily through sponsorships in the newsletters, and can diversify with products, paid newsletters, and affiliates - but it's usually much less (around 10% or lower).
- What This Means: This means in order to make more money they need to show more sponsorships to more people (or the same people more often). In order to do that, these newsletters send at a higher frequency (usually 1X per day), and write in broader niche topics to attract a broader audience.
Hybrid Newsletters
- How They Make Money: Hybrid Newsletters generally still fall in our Creator Newsletter category and make their money primarily from digital products and services, but instead of being a 90/10 or even 75/25 split of products to sponsorships you can sometimes see sponsorships make up 30-50+% of their revenue.
- What This Means: Hybrid Newsletters often find themselves in a broad niche, but with the power to still sell to their audience. This allows them to attract a broader audience, and have a larger following, but also restricts them from selling to as many members of that audience as they would in a more defined niche like a Creator Newsletter. The trade-off here is more volume.
How Niche Specificity Affects Your Pricing
The image above is one that I love to share from Alex Hormozi's $100M Offers.
It shows a great breakdown of how your niche can effect your offer, and it's price point.
I won't dwell on this topic too long, but it is an important note to make as it will clear up the big defining point for how our niche effects our newsletter business model.
The same way we went through our Newsletter Business Models, let's quickly look at what happens when we niche down VS stay broad:
- Niche Down: Helps us to stand out with specificity and earn more by increasing prices (due to that same specificity).
- Stay Broad: Allows us to reach a broader audience and therefore make it easier to potentially build a much larger following.
This should begin making it a bit more clear for you [if it wasn't already].
It can go one of two ways:
- Your niche will determine your Newsletter Business Model.
- Your preferred Newsletter Business Model will determine your niche specificity.
Hopefully these examples below will help you decide or become more clear about YOUR specific intersect between niche and newsletter business model (and therefore the way you monetize).
Creator Newsletter: David Perell's Write Of Passage
To kick us off I'm going to be sharing an example from David Perell's newsletter: Write Of Passage.
I won't be deep diving the entire newsletter (that would need an entire deep dive for itself), but I do want to go through his specific niche, and how it interacts with his offer.
Niche Specificity
David Perell's niche is not only extremely obvious, but it's also very specific.
The goal of his newsletter is to help you become a better writer.
And the goal of his offer, by the same name, is to help you become a better writer.
This specificity, targeting people looking to level up their writing, allows him to stay very clear on his positioning and build trust and authority for the specific offer he makes.
This therefore allows him to not only sell at a higher price point, but also convert at a higher rate, needing fewer people in his audience to make money with his offer(s).
The key term there being "needing".
Of course, now his audience is actually extremely large, and that doesn't take away from the fact that he can still leverage that same trust, specificity and authority.
Monetization Strategy
To help this point, we can take a look at David's offer, Write Of Passage, a bit more closely.
As you can see in the image above, David sells Write Of Passage, which is a five-week cohort, for $3995.
There is also an option to get access to the Write Of Passage community and future cohorts FOR LIFE, which is $6995, but we know the $3995 is the core offer here.
If we flash back to 2019 when David launched the first version of Write Of Passage, he had nearly 20,000 Twitter followers and over 10,000 newsletter subscribers.
This isn't exactly gigantic in terms of audience count, especially when we compare it to a Media Brand newsletter shooting for numbers in the hundreds of thousands.
That said, David was able to launch his first ever Write Of Passage to this audience and bring in over $200,000!
To share a comparison of that against a creator who is in a much more broad niche: when Ali launched Part-Time YouTuber Academy in October of 2020, Ali had 1.1 Million subscribers on YouTube, and the first launch of the cohort brought in around $295,000.
That means David launched his cohort to just 3% of the audience Ali Abdaal did, and made 2/3 of the income.
Note: It's important to note that this is EXACTLY what we're discussing when we are looking at niche and business model intersect. Ali Abdaal is making a TON of money from those 1 million subscribers through ads and other means. AKA: He structures his business model around his niche specificity. He earns primarily with volume, but he can also sell to his audience. In this case he would be more of a Hybrid model.
Media Brand Newsletter: The Morning Brew
The best example for a Media Brand Newsletter business model is going to be Morning Brew.
There are some other creators that I have added to our deep dives that also fit this category (like Alex Garcia, Marketing Max, and more); but Morning Brew will be the best example to show how your scale potential is also determined by your niche and newsletter business model.
Niche Specificity
The Morning Brew's niche is broad, allowing them to reach a massive audience of 4 MILLION subscribers, and their business model is built around that.
In fact, to scale, Morning Brew expanded into other newsletters following their same proven model.
They rolled out newsletters like Marketing Brew, CFO Brew, Healthcare Brew, HR Brew, IT Brew, Retail Brew, Tech Brew, and even more Brew Brands!
The key here is: they are fitting into specific niches, BUT, they are keeping the specificity extremely broad to have the potential for much higher volume within those niches.
Monetization Strategy
Morning Brew makes the majority of it's income from sponsorships within the newsletter.
As you can see in the image above, both newsletter screenshots show "Brought To You By" and then a sponsor for that day and newsletter.
If you are going to build your newsletter around a Media Brand Newsletter (or dare we call it The Morning Brew Model?!), then you need to be ready to build around volume and sponsorships being the primary driver of your monetization strategy.
This may seem obvious to some people as a business model - but many miss the unique interaction between the niche specificity and business model.
If Morning Brew wanted to make it easier to sell products to their audience, they would need to get more specific in their content, therefore cutting off their path to more volume, but giving them the ability to sell at a higher percentage and price.
Note: They'd find themselves building around a Creator or Hybrid Newsletter model instead.
Hybrid Newsletter: Katelyn Bourgoin's Why We Buy
One thing I want to be note is: A Hybrid Newsletter is still under the same umbrella as a Creator Newsletter - but it's important to be clear on your business model.
Katelyn Bourgoin still runs a Creator Newsletter, but she has also referred to herself as a one person media company.
Note: Both Creator Newsletters and Hybrid Newsletters send 1X per week, and follow other extremely similar structures. The only main difference is the niche specificity which leads to a bigger split in the way they monetize.
Niche Specificity
Katelyn Bourgoin's newsletter, Why We Buy, is in the marketing niche, but more specific to marketing psychology, consumer behavior and nudges.
As an overall niche, marketing (and even marketing psychology) is extremely broad.
Just look at newsletters like Marketing Examined, Growth Daily (Marketing Max), Marketing Examples, and many more who opted to scale in more of a Media Brand Newsletter Model.
That said, while Katelyn still creates extremely broad content on her social media to be able to reach the wider audience that her niche allows for, she also does a great job at taking the time to talk directly to her audience of creators that she sells to.
And then, as we take a deeper look into her offer(s) we can see that she also gets much more specific there to be able to serve them.
Monetization Strategy
While Katelyn Bourgoin makes a much bigger portion of her yearly income from sponsorships than a newsletter creator like Justin Welsh, she also makes MUCH more of her yearly income from digital products than a Media Brand Newsletter like Morning Brew or Growth Daily.
Hence the term we're using: "Hybrid".
Katelyn uses the broader niche to be able to reach a wider audience and have more overall volume of subscribers, and makes a bigger push in the way she sells and positions her sponsors within her newsletter.
BUT, she also sells products like:
- Wallet Opening Words: Digital product, eBook style, sells for $100-130.
- Unignorable: Cohort with limited access, sells for $1000 / $4000 similar to David Perell's Write of Passage.
And she's able to sell these products because she knows her audience well, and gets super specific with her offers.
So we're right back to specificity.
What Type Of Newsletter Are You Building?
You need to know your newsletter business model.
And you also need to know how your niche affects it.
Your niche specificity will play a big role in how you will monetize your newsletter; and it's a good idea to also factor in the style you WANT to be able to build.
Some people aren't going to want to be restricted to making money purely from sponsorships (even Marketing Max from Growth Daily [newsletter] talked about how selling sponsorships can be horrible).
But if you know you want to build a Creator Newsletter (and/or Hybrid Newsletter), then you know how how specific you'll want to get with your niche, and therefore what Newsletter Business Model you want to build
And, as a bonus, if you want to build a Creator Newsletter (and/or Hybrid Newsletter), you can get the proven blueprint with my 6-Figure Creator Newsletter Blueprint course.
